15 European Union Solidarity Fund
| (a)
(33771)
7770/12
COM(12) 126
(b)
(33772)
7772/12
COM(12) 125
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Draft Decision on mobilisation of the EU Solidarity Fund
Draft amending budget No 2 to the general budget for 2012: Statement of expenditure by Section: Section III — Commission
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| Legal base | (a) Article 175 TFEU; co-decision; QMV
(b) Article 314 TFEU; co-decision; QMV
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| Department | HM Treasury
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| Basis of consideration | Minister's letter of 12 May 2012
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| Previous Committee Report | HC 428-lvii (2010-12), chapter 7 (18 April 2012)
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| Discussion in Council | 15 May 2012
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
15.1 In 2002 a European Union Solidarity Fund (EUSF) was established
to assist financially Member States or candidate countries affected
by a "major natural disaster with serious repercussions on
living conditions, the natural environment or the economy".
15.2 During the course of a financial year the Commission
presents to the Council and European Parliament Draft Amending
Budgets (DABs) proposing increases or reductions for revenue and
expenditure in the current EU Budget — there are about ten
DABs each year.
15.3 The draft Decision, document (a), relates to
a severe natural disaster in northern Italy. On 25 October 2011,
an extreme weather system centred over north-west Italy led to
a very heavy rainfall within just a few hours. Italy applied to
the Commission for assistance from the EUSF Fund in December 2011
and the Commission proposes financial assistance to Italy of €18.06
million (£14.68 million), which is 2.5% of the estimated
direct damage.
15.4 In conjunction with the proposal to award Italy
with assistance from the EUSF the Commission presents Draft Amending
Budget No. 2 for the 2012 EU Budget (DAB 2/2012), document (b).
This concerns mobilisation of the EUSF for €18.06 million
in commitment and payment appropriations. The Commission says
that:
- at this stage in the year,
and on the basis of implementation forecasts, there is no source
of possible redeployment of the required payment appropriations;
- it proposes, therefore, increases in commitment
and payment appropriations for the 2012 EU budget by an additional
€18.06 million; and
- this would mean that the 2012 EU budget (including
DAB 1/2012)[62] commitment
appropriations would increase to €147.9 billion (£120.24
billion) and payment appropriations would increase to €129.11
billion (£104.97 billion).
15.5 When we considered these proposals last month
we heard that:
- the Government supports the
broad objectives of the EUSF Solidarity Fund in providing financial
assistance to Member States and countries engaged in accession
negotiations in the event of major natural disasters, where the
Member State or country alone cannot handle the repercussions;
- it welcomes the Commission's analysis of the
application from Italy for assistance from the EUSF;
- based on this analysis, the Government is content
that the application is justified and meets the criteria for assistance;
- the Commission had argued that there is no scope
for redeployments from other areas of the EU budget, and therefore
proposed an increase in the level of payment appropriations for
the 2012 EU budget;
- the Government had recalled that the previous
three DABs were related to proposals for assistance from the EUSF;
- for each of these, the funding for payment appropriations
was found from redeployments from other areas of the EU budget,
rather than additional funding;
- given this, the Government was urging the Commission
to carefully scrutinise all areas of EU spending for possible
areas of redeployment towards the costs of this proposal for EUSF
assistance for Italy, instead of calling for additional funding;
- if adopted unaltered, this proposal would cost
the UK €2.50 million (£2.03 million) (based on the UK's
13.85% share of additional spending, pre-abatement); and
- the Government was, however, seeking full redeployment,
so that the UK would incur no extra costs.
15.6 We said that we were not taking issue with the
Government's support for EUSF assistance for Italy, as in document
(a). But, we noted its aim that financing of this assistance should
be achieved by redeployment within the existing 2012 EU Budget,
rather than with additional appropriations, as proposed in document
(b) — an aim we supported. So we asked, before considering
the matter further, to have an account of the outcome of the Government's
efforts on this issue. Meanwhile the documents remained under
scrutiny.[63]
The Minister's letter
15.7 The Financial Secretary to the Treasury (Mr
Mark Hoban) reports now that:
- the Council's Budget Committee
discussed these proposals on 27 March and 23 April, where the
Government, supported by a number of other Member States, pushed-back
on the Commission's request for new funding and instead called
for the proposal to be funded through redeployments from within
the existing EU budget;
- the Commission reconsidered the possibility for
redeployment and the Presidency then issued a new proposal, which
was discussed by Budget Committee on 3 May;
- this called for redeployments to cover the full
amount of payment appropriations from the budget area "energy
projects for economic recovery";
- this was agreed by the Budget Committee by QMV,
with the Government abstaining on scrutiny grounds;
- the proposals then went to COREPER on 10 May
(where the Government again abstained) and was now to go to the
ECOFIN Council on 15 May for final agreement; and
- this outcome protects the real freeze agreed
for EU spending in 2012 and also ensures that the UK bears no
extra costs.
Conclusion
15.8 We are grateful to the Minister for this
account of the satisfactory outcome on this budgetary issue and
now clear the documents.
62 (33654) 5826/12: see HC 428-lii (2010-12), chapter
22 (29 February 2012). Back
63
See headnote. Back
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