On 12 April 2017, the Commission submitted to the Council draft amending budget (DAB) No 2 to the general budget for 2017 concerning the budgeting of the surplus resulting from the implementation of the budget year 2016.

The implementation of the budget year 2016 shows a surplus of EUR 6 404 567 996.26 resulting from:

a) a positive outturn in income part of the budget (+ EUR 1 688 million), of which:

• Title 1 (Own resources): - EUR 1 511 million
• Title 3 (Surpluses, balances and adjustments): + EUR 8 million
• Title 7 (Interest on late payments and fines): + EUR 3 052 million
• Other titles: + EUR 138 million

b) an under-implementation on expenditure side of the budget (+ EUR 4 889 million), notably of:

• appropriations authorised in the 2016 budget (Commission): + EUR 4 825 million
• appropriations carried over from 2015 (Commission): + EUR 28 million
• appropriations authorised in 2016 and carried over from 2015 (Other institutions): + EUR 35 million

c) a negative balance of currency exchange (- EUR 173 million).

The budgeting of this surplus will diminish accordingly the global contribution of Member States to the financing of the EU budget in 2017.

On 8 June 2017, the Council adopted its position on DAB No 2 to the general budget for 2017 as set out in the annex to the explanatory memorandum to the Council's position on the draft amending budget (see Doc. Council 9437/17).

The Committee on Budgets adopted the report by Jens GEIER (S&D, DE) on the Council position on Draft amending budget No 2/2017 of the European Union for the financial year 2017: entering the surplus of the financial year 2016.

Members recalled that Draft amending budget No 2/2017 aims to enter in the 2017 budget the surplus from the 2016 financial year, amounting to EUR 6 405 million.

They stressed that the main components of that surplus are:

• a positive outturn on income of EUR 1 688 million,
• an under-spending in expenditure of EUR 4 889 million,
• exchange rate differences amounting to EUR - 173 million.

On the income side, the two main components are interest on late payments and fines (EUR 3 052 million) and a negative outturn on own resources (EUR 1 511 million). 

On the expenditure side, under-implementation reaches EUR 4 825 million for 2016 and EUR 28 million for 2015 carryovers under Section III (Commission), and EUR 35 million for other institutions.

Implementation rate: overall, Members expressed concern at the significant under-implementation of EUR 4 889 million in 2016, despite the fact that Amending budget No 4/2016 had already reduced the level of payment appropriations by EUR 7 284,3 million.

The very low implementation of payment appropriations in the area of cohesion (Heading 1b) is partially due to inaccurate forecasts by Member States and to delays in the designation of managing and certifying authorities at national level.

Members drew attention to the negative impact of the depreciation of the British Pound against the Euro, which is the main cause of the shortfall in revenues of EUR 1 511 million under own resources. That shortfall could have created severe problems for the financing of the Union budget.

They noted in particular the relatively high level of fines in 2016, which totalled EUR 4 159 million, of which EUR 2 861 million are counted in the 2016 surplus.

They observed that the adoption of Draft amending budget No 2/2017 will reduce the share of GNI contributions from Member States to the Union budget in 2017 by EUR 6 405 million. They urged, once again, Member States to use the opportunity of such a reflow to honour their pledges in relation to the refugee crisis and to match the Union contribution to Union trust funds and to the new European Fund for Sustainable Development.

Amending budget: Members called on the institutions to process swiftly the pending and upcoming draft amending budgets for the Youth Employment Initiative and for the European Fund for Sustainable Development, in line with the commitments taken as part of the outcome of the conciliation on the 2017 budget.

They reminded the Council that Parliament has undertaken all necessary steps to ensure a swift adoption of the MFF revision and called on the British government to lift its blockade on the vote in the Council as soon as possible in the hope that the reflow of financial resources to Member States will ease the upcoming negotiations on the settlement of financial obligations between the UK and the Union.

Lastly, Members approved the Council position on Draft amending budget No 2/2017.

PURPOSE: presentation of draft amending budget (DAB) No 2/2017 which is intended to enter in the budget 2017 the surplus resulting from the implementation of the budget year 2016.

CONTENT: the present draft amending budget (DAB) No 2/2017 is intended to enter in the budget 2017 the surplus resulting from the implementation of the budget year 2016.

As provided for in the Financial Regulation applicable to the general budget of the Union, it is the only subject of this DAB and it has to be submitted within 15 days following the submission of the provisional accounts at end of March 2017.

Surplus: the implementation of the budget year 2016 shows a surplus of EUR 6 404 529 791,03 (excluding the outturn of contributions received from European Free Trade Association (EFTA) countries part of the European Economic Area (EEA) agreement), which is therefore entered as revenue in the 2017 budget.

The budgeting of the surplus will diminish accordingly the global contribution of the Member States to the financing of the 2017 EU budget.

The final contributions by Member States will also be influenced by the updated own resources forecast (Traditional Own Resources (TOR), Value Added Tax (VAT) and Gross National Income (GNI)) including the updated amount of the UK correction which will be available after the Advisory Committee on Own Resources (ACOR) meeting in May 2017.