BETA


2003/0233(CNS) Community loans to third countries: Guarantee Fund and new Member States, tranfer from the Fund to the budget

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead BUDG SEPPÄNEN Esko (icon: GUE/NGL GUE/NGL)
Committee Opinion AFET ISLER BÉGUIN Marie Anne (icon: Verts/ALE Verts/ALE)
Committee Opinion ITRE
Lead committee dossier:
Legal Basis:
EC Treaty (after Amsterdam) EC 308, Euratom Treaty A 203

Events

2006/11/16
   EC - Document attached to the procedure
2006/11/16
   EC - Follow-up document
Details

The Guarantee Fund for external actions was set up by Council Regulation 2728/94/EC establishing a Guarantee Fund for external actions . For a summary of the Regulation see CNS/1993/1004. The main purpose of the Fund is to ensure that Community creditors can be reimbursed in the event of any default by the beneficiaries of loans granted or guaranteed by the Communities. The Fund covers the risk of loans and loan guaranteed to third countries. Its main task is to act as a “shock absorber” for the EU’s budget.

Three different lending instruments benefit from the guarantee namely:

- guarantees of the European Investment Bank (EIB) external lending ;

- Euratom external lending; and

- Macro-financial Assistance (MFA) loans to third countries .

In 1994 a second amendment to the Regulation was adopted, which stipulates that in cases where a third country becomes a Member State of the European Union, the Fund’s coverage of the corresponding guaranteed lending is withdrawn and the Union budget will directly cover these guarantees. Accordingly, and as a result of this amendment, in early 2005 a total amount of EUR 339 million was reversed to the Community budget, with a resulting reduction in the EU’s budget.

Performance of the Fund: 2003-2006 :

The Commission report states that the Fund has fulfilled its main objective efficiently. It has prevented any disruption of budgetary implementation that would otherwise have occurred as a result of defaults on lending operations guaranteed by the Union budget. Had it not been for the Fund, the Communities would, on several occasions, have had to use budgetary resources to pay for activations of guarantees resulting in a redeployment of appropriations in the course of the budget’s implementations. Since 2003, four calls, totalling EUR 9.2 million have been handled through Fund. All concerned guarantees issued to the EIB for loans in the Republic of Argentina. The Fund has recovered all capital and interest due from the Republic of Argentina. Only penalty interest of USD 1.4 million or EUR 1.2 million are still to be recovered by the Fund.

The Commission points out though that the recent low default related losses should not be mistaken as a sign of decreased risk for the Fund. In the case of a civil war situation, for example, the calls on the Fund could increase substantially – as witnessed with the former Federal Republic of Yugoslavia.

Concerning the Fund’s assets, the report states that the volume of the Fund has decreased since 2001 when the Fund reached its peak of EUR 1.8 billion. This decrease is mostly a result of the accession of ten new Member States in May 2004. A further significant development is the decision by the Commission to present its financial statements according to the IPSAS inspired principles in 2005. This could impact upon the valuation of the fund’s portfolio.

On the matter of budgetary discipline the Commission points out that as of 2007 the reserve mechanisms will cease to exist in its present form. Budgetary discipline will be maintained through other mechanisms. For example:

- The EIB’s multi-annual external lending mandate will be limited over the 2007-2013 period;

- Macro-financial Assistance loans are subject to individual decisions by the Council; and

- Euratom lending has a ceiling of EUR 4 billion, of which around 85% will have already been used. The remaining margin stands at around EUR 600 000.

New provisioning mechanism :

In April 2005, the Commission adopted a proposal for a new provision mechanism for the Fund. (See CNS/2005/0025). The proposed new mechanism is based on provisioning linked to the outstanding amount of loans and guaranteed loans – i.e. on actual net disbursements or disbursements minus amortizations minus cancellations. Thus, under the new system, only one single annual transfer will be needed – contrary to the existing system whereby several annual transfers between the Fund and the Budget are undertaken. The single annual transfer is determined as the difference between the target amount of the Fund at year-end and the value of the Fund’s assets at year end.

In order to maintain the Fund’ main purpose (to act as a shock absorber for the budget) a smoothing mechanism has been introduced in the proposal, which will cap the annual amounts to a maximum of EUR 100 million per annum. This means that losses exceeding this cap will be paid back into the Fund over several years.

The Commission believes that the main advantages of a new provision mechanism are:

- Improved efficiency of budgetary means and a reduced number of annual transfers between he Union budget and the Fund. And

- Provisioning based on the variations of the observed net-disbursements, thereby creating greater transparency and improving the precision of the budgetary programming.

The new provisioning is a “technical” improvement. It does not change the principle of the Fund namely that the value of its assets should be equivalent of the target amount (9% times the total amount of outstanding guaranteed lending.). Further, the new provision will be much stricter in maintaining the relation between the amount of guaranteed loans and the assets of the Fund. The overall budgetary needs, during the forthcoming Financial Framework, will under the new mechanism, remain substantially lower that would be the case under the present mechanisms.

At the same time, the Commission gives warning that “shocks” such as important calls on the Fund or outflows due to the accession of new Member States or IPSAS-accounting standards-induced fluctuations, will have a direct impact on the funding needs for the Fund. As a result, any slightly higher volatility of the provisioning needs, which is the price for the improved mechanisms, will have to be absorbed in budgetary terms.

Outlook:

In early 2007, upon the accession of Bulgaria and Romania to the EU, an amount of about EUR 260 million will be reversed from the Fund’s assets to the Union budget – thereby reducing the size of the Fund.

The report also ponders the role of the EIB in managing the assets of the Fund, on behalf and under the supervision of, the Commission. Experience has shown that the Bank has always performed this task most satisfactorily. The cost of this arrangement has, however, been raised. A further issue are the fees the EIB receives from the management of the Fund’s assets. The Commission is, therefore, evaluating whether it should take over the management of the Fund’s assets itself.

To conclude, the report notes that since 1994 the Fund has performed its main tasks satisfactorily. The new Commission proposal, if adopted, will improve budget efficiency considerably. At this stage, no further legislative proposal is required. However, a new comprehensive report will be finalised in 2010 at the latest – or at an earlier stage if there is a need to change the parameter of the Fund.

2004/12/31
   Final act published in Official Journal
Details

PURPOSE : to amend Regulation 2728/94/EC, Euratom establishing a Guarantee Fund for external actions with regard to the accession of 10 new Member States on 1 May 2004.

LEGISLATIVE ACT : Council Regulation 2273/2004/EC, Euratom amending Regulation 2728/94/EC, Euratom establishing a Guarantee Fund for external actions.

CONTENT : this Regulation deals with the implications of accession on the Guarantee Fund for external actions. To recall, the Communities have granted loans and guaranteed loans to accession countries or for projects executed in those countries. Those loans and guarantees are currently covered by the Guarantee Fund and will remain outstanding or in force after the date of accession. From that date, they will cease to be external actions

of the Communities and should therefore be covered directly by the general budget of the European Union and no longer by the Guarantee Fund. This Regulation sets out rules for addressing such issues.

The new amended Regulation also includes an extension for the presentation of a annual report to the European Parliament, the Council and the Court of Auditors on the situation of the Funds and the management throughout the past year.

ENTRY INTO FORCE : 03/01/2005.

DATE APPLICABLE : from 01/05/2004.

2004/12/21
   EP/CSL - Act adopted by Council after consultation of Parliament
2004/12/21
   EP - End of procedure in Parliament
2004/12/21
   CSL - Council Meeting
2004/03/31
   EP - Text adopted by Parliament, 1st reading/single reading
2004/03/31
   EP - Decision by Parliament
Documents
2004/03/17
   EP - Committee report tabled for plenary, 1st reading/single reading
Documents
2004/03/17
   EP - Vote in committee
2004/03/16
   EP - Committee report tabled for plenary, 1st reading/single reading
Documents
2003/12/17
   CofA - Court of Auditors: opinion, report
2003/11/05
   EP - Committee referral announced in Parliament
2003/11/04
   EP - SEPPÄNEN Esko (GUE/NGL) appointed as rapporteur in BUDG
2003/11/04
   EP - ISLER BÉGUIN Marie Anne (Verts/ALE) appointed as rapporteur in AFET
2003/10/13
   EC - Legislative proposal
2003/10/12
   EC - Legislative proposal published

Documents

History

(these mark the time of scraping, not the official date of the change)

docs/0
date
2003-10-13T00:00:00
docs
summary
type
Legislative proposal
body
EC
docs/1
date
2004-02-12T00:00:00
docs
title: PE338.034
type
Committee draft report
body
EP
docs/3
date
2004-03-23T00:00:00
docs
title: PE341.334/DEF
committee
AFET
type
Committee opinion
body
EP
docs/5
date
2006-11-16T00:00:00
docs
summary
type
Follow-up document
body
EC
docs/5/docs/0/url
Old
http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2006/0695/COM_COM(2006)0695_EN.pdf
New
http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/com/2006/0695/COM_COM(2006)0695_EN.pdf
docs/6
date
2006-11-16T00:00:00
docs
summary
type
Follow-up document
body
EC
events/0
date
2003-10-12T00:00:00
type
Legislative proposal published
body
EC
docs
summary
events/0
date
2003-10-13T00:00:00
type
Legislative proposal published
body
EC
docs
summary
events/3/date
Old
2004-03-17T00:00:00
New
2004-03-16T00:00:00
docs/2/docs/0/url
Old
http://www.europarl.europa.eu/doceo/document/A-5-2004-0199_EN.html
New
https://www.europarl.europa.eu/doceo/document/A-5-2004-0199_EN.html
docs/4/docs/0/url
Old
http://www.europarl.europa.eu/doceo/document/TA-5-2004-0229_EN.html
New
https://www.europarl.europa.eu/doceo/document/TA-5-2004-0229_EN.html
docs/5/docs/0/url
Old
http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/sec/2006/1460/COM_SEC(2006)1460_EN.pdf
New
http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/sec/2006/1460/COM_SEC(2006)1460_EN.pdf
docs/6/docs/0/url
Old
http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/com/2006/0695/COM_COM(2006)0695_EN.pdf
New
http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2006/0695/COM_COM(2006)0695_EN.pdf
events/0/docs/0/url
Old
http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/com/2003/0604/COM_COM(2003)0604_EN.pdf
New
http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2003/0604/COM_COM(2003)0604_EN.pdf
events/1/type
Old
Committee referral announced in Parliament, 1st reading/single reading
New
Committee referral announced in Parliament
events/2/type
Old
Vote in committee, 1st reading/single reading
New
Vote in committee
events/3/docs/0/url
Old
http://www.europarl.europa.eu/doceo/document/A-5-2004-0199_EN.html
New
https://www.europarl.europa.eu/doceo/document/A-5-2004-0199_EN.html
events/4
date
2004-03-31T00:00:00
type
Decision by Parliament
body
EP
docs
url: https://www.europarl.europa.eu/doceo/document/TA-5-2004-0229_EN.html title: T5-0229/2004
summary
events/4
date
2004-03-31T00:00:00
type
Decision by Parliament, 1st reading/single reading
body
EP
docs
url: http://www.europarl.europa.eu/doceo/document/TA-5-2004-0229_EN.html title: T5-0229/2004
summary
committees/0
type
Responsible Committee
body
EP
associated
False
committee_full
Budgets
committee
BUDG
rapporteur
name: SEPPÄNEN Esko date: 2003-11-04T00:00:00 group: European United Left - Nordic Green Left abbr: GUE/NGL
committees/0
type
Responsible Committee
body
EP
associated
False
committee_full
Budgets
committee
BUDG
date
2003-11-04T00:00:00
rapporteur
name: SEPPÄNEN Esko group: European United Left - Nordic Green Left abbr: GUE/NGL
committees/1
type
Committee Opinion
body
EP
associated
False
committee_full
Foreign Affairs, Human Rights, Common Security, Defense
committee
AFET
rapporteur
name: ISLER BÉGUIN Marie Anne date: 2003-11-04T00:00:00 group: Greens/European Free Alliance abbr: Verts/ALE
committees/1
type
Committee Opinion
body
EP
associated
False
committee_full
Foreign Affairs, Human Rights, Common Security, Defense
committee
AFET
date
2003-11-04T00:00:00
rapporteur
name: ISLER BÉGUIN Marie Anne group: Greens/European Free Alliance abbr: Verts/ALE
docs/2/docs/0/url
Old
http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A5-2004-199&language=EN
New
http://www.europarl.europa.eu/doceo/document/A-5-2004-0199_EN.html
docs/4/docs/0/url
Old
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P5-TA-2004-229
New
http://www.europarl.europa.eu/doceo/document/TA-5-2004-0229_EN.html
docs/6/docs/0/url
Old
http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2006/0695/COM_COM(2006)0695_EN.pdf
New
http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/com/2006/0695/COM_COM(2006)0695_EN.pdf
events/0/docs/0/url
Old
http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2003/0604/COM_COM(2003)0604_EN.pdf
New
http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/com/2003/0604/COM_COM(2003)0604_EN.pdf
events/3/docs/0/url
Old
http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A5-2004-199&language=EN
New
http://www.europarl.europa.eu/doceo/document/A-5-2004-0199_EN.html
events/4/docs/0/url
Old
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P5-TA-2004-229
New
http://www.europarl.europa.eu/doceo/document/TA-5-2004-0229_EN.html
events/7/docs/1/url
Old
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2004:396:TOC
New
https://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2004:396:SOM:EN:HTML
activities
  • date: 2003-10-13T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2003/0604/COM_COM(2003)0604_EN.pdf title: COM(2003)0604 type: Legislative proposal published celexid: CELEX:52003PC0604:EN body: EC commission: DG: url: http://ec.europa.eu/dgs/economy_finance/index_en.htm title: Economic and Financial Affairs type: Legislative proposal published
  • date: 2003-11-05T00:00:00 body: EP type: Committee referral announced in Parliament, 1st reading/single reading committees: body: EP responsible: False committee: AFET date: 2003-11-04T00:00:00 committee_full: Foreign Affairs, Human Rights, Common Security, Defense rapporteur: group: V/ALE name: ISLER BÉGUIN Marie Anne body: EP responsible: True committee: BUDG date: 2003-11-04T00:00:00 committee_full: Budgets rapporteur: group: GUE/NGL name: SEPPÄNEN Esko body: EP responsible: False committee_full: Industry, External Trade, Research, Energy committee: ITRE
  • body: EP committees: body: EP responsible: False committee: AFET date: 2003-11-04T00:00:00 committee_full: Foreign Affairs, Human Rights, Common Security, Defense rapporteur: group: V/ALE name: ISLER BÉGUIN Marie Anne body: EP responsible: True committee: BUDG date: 2003-11-04T00:00:00 committee_full: Budgets rapporteur: group: GUE/NGL name: SEPPÄNEN Esko body: EP responsible: False committee_full: Industry, External Trade, Research, Energy committee: ITRE docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A5-2004-199&language=EN type: Committee report tabled for plenary, 1st reading/single reading title: A5-0199/2004 date: 2004-03-17T00:00:00 type: Vote in committee, 1st reading/single reading
  • date: 2004-03-31T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P5-TA-2004-229 type: Decision by Parliament, 1st reading/single reading title: T5-0229/2004 body: EP type: Decision by Parliament, 1st reading/single reading
  • date: 2004-12-21T00:00:00 body: CSL type: Council Meeting council: Agriculture and Fisheries meeting_id: 2633
  • date: 2004-12-21T00:00:00 body: EP type: End of procedure in Parliament
  • date: 2004-12-21T00:00:00 body: EP/CSL type: Act adopted by Council after consultation of Parliament
  • date: 2004-12-31T00:00:00 type: Final act published in Official Journal docs: url: http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=EN&numdoc=32004R2273 title: Regulation 2004/2273 url: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2004:396:TOC title: OJ L 396 31.12.2004, p. 0028-0029
commission
  • body: EC dg: Economic and Financial Affairs commissioner: --
committees/0
type
Responsible Committee
body
EP
associated
False
committee_full
Budgets
committee
BUDG
date
2003-11-04T00:00:00
rapporteur
name: SEPPÄNEN Esko group: European United Left - Nordic Green Left abbr: GUE/NGL
committees/0
body
EP
responsible
False
committee
AFET
date
2003-11-04T00:00:00
committee_full
Foreign Affairs, Human Rights, Common Security, Defense
rapporteur
group: V/ALE name: ISLER BÉGUIN Marie Anne
committees/1
type
Committee Opinion
body
EP
associated
False
committee_full
Foreign Affairs, Human Rights, Common Security, Defense
committee
AFET
date
2003-11-04T00:00:00
rapporteur
name: ISLER BÉGUIN Marie Anne group: Greens/European Free Alliance abbr: Verts/ALE
committees/1
body
EP
responsible
True
committee
BUDG
date
2003-11-04T00:00:00
committee_full
Budgets
rapporteur
group: GUE/NGL name: SEPPÄNEN Esko
committees/2
type
Committee Opinion
body
EP
associated
False
committee_full
Industry, External Trade, Research, Energy
committee
ITRE
opinion
False
committees/2
body
EP
responsible
False
committee_full
Industry, External Trade, Research, Energy
committee
ITRE
council
  • body: CSL type: Council Meeting council: Agriculture and Fisheries meeting_id: 2633 url: http://register.consilium.europa.eu/content/out?lang=EN&typ=SET&i=SMPL&ROWSPP=25&RESULTSET=1&NRROWS=500&DOC_LANCD=EN&ORDERBY=DOC_DATE+DESC&CONTENTS=2633*&MEET_DATE=21/12/2004 date: 2004-12-21T00:00:00
docs
  • date: 2003-12-17T00:00:00 docs: url: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:C:2004:019:TOC title: OJ C 019 23.01.2004, p. 0003-0003 title: RCC0010/2003 summary: type: Court of Auditors: opinion, report body: CofA
  • date: 2004-02-12T00:00:00 docs: title: PE338.034 type: Committee draft report body: EP
  • date: 2004-03-17T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A5-2004-199&language=EN title: A5-0199/2004 type: Committee report tabled for plenary, 1st reading/single reading body: EP
  • date: 2004-03-23T00:00:00 docs: title: PE341.334/DEF committee: AFET type: Committee opinion body: EP
  • date: 2004-03-31T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P5-TA-2004-229 title: T5-0229/2004 url: https://eur-lex.europa.eu/JOHtml.do?uri=OJ:C:2004:103E:SOM:EN:HTML title: OJ C 103 29.04.2004, p. 0448-0544 E summary: type: Text adopted by Parliament, 1st reading/single reading body: EP
  • date: 2006-11-16T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/sec/2006/1460/COM_SEC(2006)1460_EN.pdf title: SEC(2006)1460 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=SECfinal&an_doc=2006&nu_doc=1460 title: EUR-Lex type: Document attached to the procedure body: EC
  • date: 2006-11-16T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2006/0695/COM_COM(2006)0695_EN.pdf title: COM(2006)0695 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=COMfinal&an_doc=2006&nu_doc=695 title: EUR-Lex summary: The Guarantee Fund for external actions was set up by Council Regulation 2728/94/EC establishing a Guarantee Fund for external actions . For a summary of the Regulation see CNS/1993/1004. The main purpose of the Fund is to ensure that Community creditors can be reimbursed in the event of any default by the beneficiaries of loans granted or guaranteed by the Communities. The Fund covers the risk of loans and loan guaranteed to third countries. Its main task is to act as a “shock absorber” for the EU’s budget. Three different lending instruments benefit from the guarantee namely: - guarantees of the European Investment Bank (EIB) external lending ; - Euratom external lending; and - Macro-financial Assistance (MFA) loans to third countries . In 1994 a second amendment to the Regulation was adopted, which stipulates that in cases where a third country becomes a Member State of the European Union, the Fund’s coverage of the corresponding guaranteed lending is withdrawn and the Union budget will directly cover these guarantees. Accordingly, and as a result of this amendment, in early 2005 a total amount of EUR 339 million was reversed to the Community budget, with a resulting reduction in the EU’s budget. Performance of the Fund: 2003-2006 : The Commission report states that the Fund has fulfilled its main objective efficiently. It has prevented any disruption of budgetary implementation that would otherwise have occurred as a result of defaults on lending operations guaranteed by the Union budget. Had it not been for the Fund, the Communities would, on several occasions, have had to use budgetary resources to pay for activations of guarantees resulting in a redeployment of appropriations in the course of the budget’s implementations. Since 2003, four calls, totalling EUR 9.2 million have been handled through Fund. All concerned guarantees issued to the EIB for loans in the Republic of Argentina. The Fund has recovered all capital and interest due from the Republic of Argentina. Only penalty interest of USD 1.4 million or EUR 1.2 million are still to be recovered by the Fund. The Commission points out though that the recent low default related losses should not be mistaken as a sign of decreased risk for the Fund. In the case of a civil war situation, for example, the calls on the Fund could increase substantially – as witnessed with the former Federal Republic of Yugoslavia. Concerning the Fund’s assets, the report states that the volume of the Fund has decreased since 2001 when the Fund reached its peak of EUR 1.8 billion. This decrease is mostly a result of the accession of ten new Member States in May 2004. A further significant development is the decision by the Commission to present its financial statements according to the IPSAS inspired principles in 2005. This could impact upon the valuation of the fund’s portfolio. On the matter of budgetary discipline the Commission points out that as of 2007 the reserve mechanisms will cease to exist in its present form. Budgetary discipline will be maintained through other mechanisms. For example: - The EIB’s multi-annual external lending mandate will be limited over the 2007-2013 period; - Macro-financial Assistance loans are subject to individual decisions by the Council; and - Euratom lending has a ceiling of EUR 4 billion, of which around 85% will have already been used. The remaining margin stands at around EUR 600 000. New provisioning mechanism : In April 2005, the Commission adopted a proposal for a new provision mechanism for the Fund. (See CNS/2005/0025). The proposed new mechanism is based on provisioning linked to the outstanding amount of loans and guaranteed loans – i.e. on actual net disbursements or disbursements minus amortizations minus cancellations. Thus, under the new system, only one single annual transfer will be needed – contrary to the existing system whereby several annual transfers between the Fund and the Budget are undertaken. The single annual transfer is determined as the difference between the target amount of the Fund at year-end and the value of the Fund’s assets at year end. In order to maintain the Fund’ main purpose (to act as a shock absorber for the budget) a smoothing mechanism has been introduced in the proposal, which will cap the annual amounts to a maximum of EUR 100 million per annum. This means that losses exceeding this cap will be paid back into the Fund over several years. The Commission believes that the main advantages of a new provision mechanism are: - Improved efficiency of budgetary means and a reduced number of annual transfers between he Union budget and the Fund. And - Provisioning based on the variations of the observed net-disbursements, thereby creating greater transparency and improving the precision of the budgetary programming. The new provisioning is a “technical” improvement. It does not change the principle of the Fund namely that the value of its assets should be equivalent of the target amount (9% times the total amount of outstanding guaranteed lending.). Further, the new provision will be much stricter in maintaining the relation between the amount of guaranteed loans and the assets of the Fund. The overall budgetary needs, during the forthcoming Financial Framework, will under the new mechanism, remain substantially lower that would be the case under the present mechanisms. At the same time, the Commission gives warning that “shocks” such as important calls on the Fund or outflows due to the accession of new Member States or IPSAS-accounting standards-induced fluctuations, will have a direct impact on the funding needs for the Fund. As a result, any slightly higher volatility of the provisioning needs, which is the price for the improved mechanisms, will have to be absorbed in budgetary terms. Outlook: In early 2007, upon the accession of Bulgaria and Romania to the EU, an amount of about EUR 260 million will be reversed from the Fund’s assets to the Union budget – thereby reducing the size of the Fund. The report also ponders the role of the EIB in managing the assets of the Fund, on behalf and under the supervision of, the Commission. Experience has shown that the Bank has always performed this task most satisfactorily. The cost of this arrangement has, however, been raised. A further issue are the fees the EIB receives from the management of the Fund’s assets. The Commission is, therefore, evaluating whether it should take over the management of the Fund’s assets itself. To conclude, the report notes that since 1994 the Fund has performed its main tasks satisfactorily. The new Commission proposal, if adopted, will improve budget efficiency considerably. At this stage, no further legislative proposal is required. However, a new comprehensive report will be finalised in 2010 at the latest – or at an earlier stage if there is a need to change the parameter of the Fund. type: Follow-up document body: EC
events
  • date: 2003-10-13T00:00:00 type: Legislative proposal published body: EC docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2003/0604/COM_COM(2003)0604_EN.pdf title: COM(2003)0604 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=COMfinal&an_doc=2003&nu_doc=604 title: EUR-Lex summary:
  • date: 2003-11-05T00:00:00 type: Committee referral announced in Parliament, 1st reading/single reading body: EP
  • date: 2004-03-17T00:00:00 type: Vote in committee, 1st reading/single reading body: EP summary:
  • date: 2004-03-17T00:00:00 type: Committee report tabled for plenary, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A5-2004-199&language=EN title: A5-0199/2004
  • date: 2004-03-31T00:00:00 type: Decision by Parliament, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P5-TA-2004-229 title: T5-0229/2004 summary:
  • date: 2004-12-21T00:00:00 type: Act adopted by Council after consultation of Parliament body: EP/CSL
  • date: 2004-12-21T00:00:00 type: End of procedure in Parliament body: EP
  • date: 2004-12-31T00:00:00 type: Final act published in Official Journal summary: PURPOSE : to amend Regulation 2728/94/EC, Euratom establishing a Guarantee Fund for external actions with regard to the accession of 10 new Member States on 1 May 2004. LEGISLATIVE ACT : Council Regulation 2273/2004/EC, Euratom amending Regulation 2728/94/EC, Euratom establishing a Guarantee Fund for external actions. CONTENT : this Regulation deals with the implications of accession on the Guarantee Fund for external actions. To recall, the Communities have granted loans and guaranteed loans to accession countries or for projects executed in those countries. Those loans and guarantees are currently covered by the Guarantee Fund and will remain outstanding or in force after the date of accession. From that date, they will cease to be external actions of the Communities and should therefore be covered directly by the general budget of the European Union and no longer by the Guarantee Fund. This Regulation sets out rules for addressing such issues. The new amended Regulation also includes an extension for the presentation of a annual report to the European Parliament, the Council and the Court of Auditors on the situation of the Funds and the management throughout the past year. ENTRY INTO FORCE : 03/01/2005. DATE APPLICABLE : from 01/05/2004. docs: title: Regulation 2004/2273 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=EN&numdoc=32004R2273 title: OJ L 396 31.12.2004, p. 0028-0029 url: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2004:396:TOC
other
  • body: EC dg: url: http://ec.europa.eu/dgs/economy_finance/index_en.htm title: Economic and Financial Affairs
procedure/dossier_of_the_committee
Old
BUDG/5/20204
New
  • BUDG/5/20204
procedure/final/url
Old
http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=EN&numdoc=32004R2273
New
https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=EN&numdoc=32004R2273
procedure/instrument
Old
Regulation
New
  • Regulation
  • Amending Regulation (EC) No 2728/94 1993/1004(CNS)
procedure/subject
Old
  • 6.30.04 Loans to third-countries, Guarantee Fund
  • 8.20.08 Enlargement's economic and monetary point of view
  • 8.70.01 Financing of the budget, own resources
New
6.30.04
Loans to third-countries, Guarantee Fund
8.20.08
Enlargement's economic and monetary point of view
8.70.01
Financing of the budget, own resources
procedure/summary
  • Amending Regulation (EC) No 2728/94
activities/0/docs/0/url
Old
http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/com/2003/0604/COM_COM(2003)0604_EN.pdf
New
http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2003/0604/COM_COM(2003)0604_EN.pdf
activities/7/docs/1/url
Old
http://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2004:396:SOM:EN:HTML
New
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2004:396:TOC
links/European Commission/title
Old
PreLex
New
EUR-Lex
activities
  • date: 2003-10-13T00:00:00 docs: url: http://www.europarl.europa.eu/registre/docs_autres_institutions/commission_europeenne/com/2003/0604/COM_COM(2003)0604_EN.pdf celexid: CELEX:52003PC0604:EN type: Legislative proposal published title: COM(2003)0604 type: Legislative proposal published body: EC commission: DG: url: http://ec.europa.eu/dgs/economy_finance/index_en.htm title: Economic and Financial Affairs
  • date: 2003-11-05T00:00:00 body: EP type: Committee referral announced in Parliament, 1st reading/single reading committees: body: EP responsible: False committee: AFET date: 2003-11-04T00:00:00 committee_full: Foreign Affairs, Human Rights, Common Security, Defense rapporteur: group: V/ALE name: ISLER BÉGUIN Marie Anne body: EP responsible: True committee: BUDG date: 2003-11-04T00:00:00 committee_full: Budgets rapporteur: group: GUE/NGL name: SEPPÄNEN Esko body: EP responsible: False committee_full: Industry, External Trade, Research, Energy committee: ITRE
  • body: EP committees: body: EP responsible: False committee: AFET date: 2003-11-04T00:00:00 committee_full: Foreign Affairs, Human Rights, Common Security, Defense rapporteur: group: V/ALE name: ISLER BÉGUIN Marie Anne body: EP responsible: True committee: BUDG date: 2003-11-04T00:00:00 committee_full: Budgets rapporteur: group: GUE/NGL name: SEPPÄNEN Esko body: EP responsible: False committee_full: Industry, External Trade, Research, Energy committee: ITRE docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A5-2004-199&language=EN type: Committee report tabled for plenary, 1st reading/single reading title: A5-0199/2004 date: 2004-03-17T00:00:00 type: Vote in committee, 1st reading/single reading
  • date: 2004-03-31T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P5-TA-2004-229 type: Decision by Parliament, 1st reading/single reading title: T5-0229/2004 body: EP type: Decision by Parliament, 1st reading/single reading
  • date: 2004-12-21T00:00:00 body: CSL type: Council Meeting council: Agriculture and Fisheries meeting_id: 2633
  • date: 2004-12-21T00:00:00 body: EP type: End of procedure in Parliament
  • date: 2004-12-21T00:00:00 body: EP/CSL type: Act adopted by Council after consultation of Parliament
  • date: 2004-12-31T00:00:00 type: Final act published in Official Journal docs: url: http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=EN&numdoc=32004R2273 title: Regulation 2004/2273 url: http://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2004:396:SOM:EN:HTML title: OJ L 396 31.12.2004, p. 0028-0029
committees
  • body: EP responsible: False committee: AFET date: 2003-11-04T00:00:00 committee_full: Foreign Affairs, Human Rights, Common Security, Defense rapporteur: group: V/ALE name: ISLER BÉGUIN Marie Anne
  • body: EP responsible: True committee: BUDG date: 2003-11-04T00:00:00 committee_full: Budgets rapporteur: group: GUE/NGL name: SEPPÄNEN Esko
  • body: EP responsible: False committee_full: Industry, External Trade, Research, Energy committee: ITRE
links
European Commission
other
  • body: EC dg: url: http://ec.europa.eu/dgs/economy_finance/index_en.htm title: Economic and Financial Affairs
procedure
dossier_of_the_committee
BUDG/5/20204
reference
2003/0233(CNS)
instrument
Regulation
legal_basis
stage_reached
Procedure completed
summary
Amending Regulation (EC) No 2728/94
subtype
Legislation
title
Community loans to third countries: Guarantee Fund and new Member States, tranfer from the Fund to the budget
type
CNS - Consultation procedure
final
subject