Supplementary letter from HM Treasury
2009 PRELIMINARY DRAFT BUDGET (PDB) OF THE
EUROPEAN COMMUNITIES
During the evidence session before Sub-Committee
A on 11 June I agreed to write to provide further information
on two issues: how inflation is incorporated into the PDB; and
amount, in appropriations, requested for decentralised agencies
in the 2009 PDB compared to the 2008 PDB. I will now respond to
these issues in turn:
INFLATION RATES
Inflation is incorporated into the PDB through:
a 2% annual inflation rate factored into the ceilings for commitments
set by the financial framework; and the inclusion of inflation
rates in the budgetary requirements for the year presented by
the Commission and other EU institutions in the PDB. Inflation
rates play an intrinsic part in determining administration costs,
including staff remunerations and pensions of officials and other
servants of the European Communities.
If additional information on inflation comes
to light during the course of Budget negotiations that has an
impact on the estimates presented in the PDB, the Commission is
permitted to modify its estimates accordingly through an amending
letter that needs to be presented to the Council ahead of the
European Parliament's first reading in the autumn. Following the
final adoption of the EC Budget, the Commission may present the
Budgetary Authority with a request for additional resources in
the form of an amending budget should additional unforeseen inflationary
pressures occur.
DECENTRALISED AGENCIES
Compared to the 2008 PDB, the 2009 PDB sees
total increases in appropriations for decentralised agencies of:
€38.9 million (£31.6 million) or 7.6% in commitments,
to €563.9 million (£446.8 million1); and €44.1
million (£34.9 million) or 8.4% increase in payments, to
€571.5 million (£452.9 million). This represents an
increase of €9.8 million (£7.7 million) or 1.8% in commitments
and a decrease of €6.0 million (£4.8 million) or -1.0%
in payments, compared to the 2008 Adopted Budget.
A detailed comparison of appropriations for
decentralised agencies, by Budget Heading, requested in the 2009
PDB, 2008 PDB, are provided for in the 2008 Budget. Further details
of the budgets for the decentralised agencies is contained in
the Commission's Working Document Part IV, which has been placed
in the library of the House for your information.
I am copying this letter to Lord Moser and Lord
Woolmer, and Michael Connarty MP, Chairman of the Commons Committee.
8 July 2008
1 This and all further sterling figures are converted
using the exchange rate for 30 June 2008, £1 = €1.2622.
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