The Commission has adopted a proposal on how to finance the extra EUR 2.4 billion for Galileo and the EUR 309 million for the European Institute of Technology (EIT) through a revision of the Financial Framework 2007-2013. The balanced proposal does not require augmenting the total commitment appropriations as funding can be found in the margins of different headings available in 2007 and in 2008 and through re-profiling research funding already foreseen for Galileo.

Here are the answers to the relevant technical questions:

1. What is the Commission proposing from a financial point of view?

The Commission has analysed different financing options for Galileo and EIT and come to the conclusion that the most effective solution is to propose a revision of the Multi-Annual Financial Framework 2007-2013 (MAFF) using provisions of the Inter-Institutional Agreement on budgetary discipline and sound financial management (IIA) of 17 May 2006, without any increase of the overall ceiling.

Of the amount required, EUR 220 million will be transferred from the margin available in 2007 and 2008 under the heading “Administration”, which covers the running costs of the European institutions; EUR 2.189 billion will be transferred from the margin available in 2007 and 2008 under heading 2 “Preservation and Management of Natural Resources” which won’t be needed and which leave anyway a margin of € 2 billion under the ceiling in 2008; EUR 0.3 billion which are available within the transport related research programmes dedicated to Galileo under the 7th Research Framework Programme.

2. Will this proposal entail an increase of the spending in the Financial Framework?

The transfers mentioned above imply that the total financial commitments agreed upon by the European Parliament, the Council and the Commission in 2006 will not be increased. The IIA provides that, in the event of unforeseen circumstances, the Commission may propose the revision of the framework. The new developments relating to the financing of Galileo and EIT were not foreseeable when the IIA was agreed.

Thus, the overall amount of EUR 974.769 billion (in current prices) for the seven year period remains unchanged. The ceiling for Heading 5 is reduced from EUR 56.225 billion to EUR 56.005 billion and Heading 2 from EUR 418.125 billion to EUR 415.936 billion. The ceiling for Heading 1a is increased from EUR 83.987 billion to EUR 86.396 billion.

3. What is the point of having a Multi-annual Financial Framework if you change it so early on in the period?

The whole idea behind the MAFF is to plan ahead and set expenditure ceilings both for expenditure as a whole and for the major policy headings, thus guaranteeing financial predictability for all the interested parties. However, this approach can only work if the EU has the means to adapt its expenditure programmes to cater for unforeseen events, within certain limits. For this reason, IIA includes provisions allowing some flexibility through the adjustment of the MAFF.

4. What is the procedure to get this proposal adopted?

The discussions between the two arms of the Budgetary Authority and the Commission will take place in so-called Trilogue meetings before the Commission proposal will be formally submitted for adoption to the European Parliament and the Council. The provisions of the IIA apply. Since the amount at stake for the revision is far below 0,03% of the EU GNI, the decision to revise the financial framework can be adopted by a qualified majority in the Council and a majority of the members of the EP with three fifth of the votes cast.

FINANCIAL FRAMEWORK 2007-2013 (revised)