IMMC.COM%282024%2980%20final.ENG.xhtml.1_EN_ACT_part1

EUROPEAN COMMISSION

Brussels, 29.2.2024

COM(2024) 80 final

2024/0056(BUD)

DRAFT AMENDING BUDGET No 1
TO THE GENERAL BUDGET 2024

Amendments of the 2024 budget required due to the MFF revision

Having regard to:

–the Treaty on the Functioning of the European Union, and in particular Article 314 thereof, in conjunction with the Treaty establishing the European Atomic Energy Community, and in particular Article 106a thereof,

–Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union 1 , entered into force on 1 June 2021,

–Council Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027 2 , as last amended by Council Regulation (EU, Euratom) 2024/765 of 28 February 2024, which applies with retroactive effect as of 1 January 2024 3 ,

–Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union (…) 4 , and in particular Article 44 thereof,

–the general budget of the European Union for the financial year 2024, as adopted on 22 November 2023 5 ,

The European Commission hereby presents to the European Parliament and to the Council Draft Amending Budget No 1 to the 2024 budget.

CHANGES TO THE STATEMENT OF REVENUE AND EXPENDITURE BY SECTION

The changes to the general statement of revenue and to the individual section III are available on EUR-Lex ( https://eur-lex.europa.eu/budget/www/index-en.htm ).

Table of Contents

1. Introduction

2. Adjustments stemming from the MFF revision

2.1 Ukraine Facility

2.2 European Defence Fund (EDF) within the Strategic Technologies for Europe Platform (STEP)

2.3 European Solidarity Reserve and Emergency Aid Reserve

2.4 Reform and Growth Facility for the Western Balkans

2.5 European Globalisation Adjustment Fund

3. Adjustments stemming from the political agreement on the Artificial Intelligence Act (AI Office)

4. Financing

5. Summary table by MFF Heading

EXPLANATORY MEMORANDUM

1.Introduction

The purpose of Draft Amending Budget No 1 for the year 2024 (DAB 1) is to introduce the necessary changes to the 2024 budget stemming from the revision of the Multiannual Financial Framework.

The revision of the MFF Regulation applies retroactively as of 1st January 2024 and includes inter alia amendments to the MFF ceilings that have been communicated in the updated technical adjustment of the MFF for 2024 in the form of a Commission Communication adopted on 29 February 2024 6 , as foreseen in Article 4(1) of the MFF Regulation.

In order to reflect the impact of the MFF revision on the financial year 2024, DAB 1 covers the following elements:

·Creation of the budget nomenclature and remarks to cater for the Ukraine Facility 7 , and mobilisation of the new special instrument, the Ukrainian Reserve, with an amount of EUR 4,8 billion of commitment appropriations and EUR 3,8 billion of payment appropriations for the Union’s support other than in the form of loans, including administrative support. in line with the MFF regulation;

·Reinforcement of the European Defence Fund within the framework of the Strategic Technologies for Europe Platform (STEP) 8 by EUR 376 million in commitment appropriations;

·Adjustment to the budget nomenclature in order to split the Solidarity and Emergency Aid Reserve in two separate instruments and to increase the amounts for each instrument;

·Creation of the budget nomenclature and remarks to cater for the Reform and Growth Facility for the Western Balkans, with an amount of EUR 501 million in commitment appropriations in reserve and EUR 23,9 million in payment appropriations, in reserve pending the adoption of the legal basis;

·Reduction of the level of commitment appropriations of the reserve for the European Globalisation Adjustment Fund for Displaced Workers (EGF) by EUR 175,7 million in 2024.

Additionally, DAB 1 includes an adjustment to the budget remarks of the budget line for support expenditure of the Digital Europe Programme following the political agreement reached in December 2023 by the European Parliament and the Council on the establishment of the Artificial Intelligence Office.

Overall, the net impact of DAB 1 on expenditure amounts to an increase of EUR 5 833,7 million in commitment appropriations and an increase of EUR 4 143,6 million in payment appropriations.

2.Adjustments stemming from the MFF revision

2.1Ukraine Facility

The revised Multiannual Financial Framework Regulation creates a new special instrument – the Ukraine Reserve - for the period 2024-2027 for the sole purpose of financing the new Ukraine Facility. The latter aims to support Ukraine's efforts to sustain macro-financial stability, support reconstruction as well as modernise the country whilst implementing key reforms on its EU accession track. The Facility is designed as a flexible instrument adapted to the unprecedented challenges of supporting a country at war and ensuring predictability, transparency, and accountability of the funds.

The Commission therefore proposes to make the necessary adjustments to the budget nomenclature and budget remarks and proposes to mobilise the Ukraine facility in this DAB. This includes creating eight new budget lines for which the corresponding budget remarks are set out in the budgetary annex. It is proposed to mobilise an amount of EUR 4 767,5 million of commitment appropriations and EUR 3 754,8 million of payment appropriations. Out of this amount, EUR 38,6 million is proposed to be used for technical and administrative support expenditure, which will also be used to finance external personnel, in line with the corresponding legislative financial statement.

EUR
Budget line	Name	Commitment appropriations	Payment appropriations
Section III – Commission
16 01 06	Support Expenditure for the Ukraine Facility	38 612 000	38 612 000
16 04 06	Ukraine Facility	p.m.	p.m.
16 06 01	Pillar I: Ukraine Plan	3 000 000 000	3 000 000 000
16 06 02 01	Provisioning of the Common Provisioning Fund	819 000 000	200 000 000
16 06 02 02	Other actions under the Ukraine Investment Framework	527 065 000	210 826 000
16 06 03 01	Union accession assistance and other measures	155 000 000	77 500 000
16 06 03 02	Borrowing costs subsidy	195 333 904	195 333 904
16 06 03 03	Provisioning of the Common Provisionning Fund - Legacy	32 533 128	32 533 128
Total		4 767 544 032	3 754 805 032

2.2European Defence Fund (EDF) within the Strategic Technologies for Europe Platform (STEP)

In order to boost the defence investment capacity contributing to the STEP objectives, the revision of the Multiannual Financial Framework includes an increase of EUR 1,5 billion for the remainder of the MFF, for which an increase of EUR 376 million of commitment appropriations in 2024 is proposed, split between both strands of the programme (i.e. defence research, and capability development) in line with the legislative amendment presented in the proposal for a STEP Regulation 9 . Considering expected budgetary implementation, there is no need for additional payment appropriations in 2024.

EUR
Budget line	Name	Commitment appropriations	Payment appropriations
Section III – Commission
13 02 01	Capability development	250 667 000	p.m.
13 03 01	Defence Research	125 333 000	p.m.
Total		376 000 000	p.m.

2.3European Solidarity Reserve and Emergency Aid Reserve

Following the revision of the Multiannual Financial Framework and in the light of the increased number of natural disasters and humanitarian crises and in order to avoid competing priorities, the Solidary and Emergency Aid Reserve (SEAR) has been split in two separate instruments retroactively as of 1st January 2024: the European Solidarity Reserve (ESR) and the Emergency Aid Reserve (EAR) as follows:

·the European Solidarity Reserve with an annual amount of EUR 1 016 million (in 2018 prices, corresponding to EUR 1 144,2 million in 2024 prices) for assistance to respond to emergency situations covered by the European Union Solidarity Fund (EUSF);

·the Emergency Aid Reserve with an annual amount of EUR 508 million (in 2018 prices, corresponding to EUR 572,1 million in 2024 prices) for rapid responses to specific emergency needs within the Union or in third countries.

To reflect these changes, the 4 current sublines under line 30 04 01 will be deleted as follows:

Budget line	Name	Commitment appropriations	Payment appropriations
Section III – Commission
30 04 01 01	Internal (excluding EUSF)	-152 031 938	-152 031 938
30 04 01 02	EUSF	-456 773 125	-456 773 125
30 04 01 03	External	-354 741 188	-354 741 188
30 04 01 04	End-of-Year Cushion (25%)	-337 848 750	-337 848 750
Total		-1 301 395 001	-1 301 395 001

The current line 30 04 01 will be split into two lines corresponding to the two new instruments with the corresponding level of annual amounts of commitment and payment appropriations, as follows:

Budget line	Name	Commitment appropriations	Payment appropriations
Section III – Commission
30 04 01 01	European Solidarity Reserve	1 094 181 018	1 094 181 018
30 04 01 02	Emergency Aid Reserve	572 090 509	572 090 509
Total		1 666 271 527	1 666 271 527

In accordance with Article 4a (4) of Council Regulation (EC) 2012/2002 10 , an amount of commitment and payment appropriations of EUR 50,0 million has been already mobilised in commitment and payment appropriations from the European Solidarity Reserve and entered into the 2024 budget for the EUSF under budget article 16 02 01, in order to ensure the timely availability of sufficient budgetary resources for EUSF advance payments.

The corresponding budget remarks are set out in the budgetary annex.

2.4Reform and Growth Facility for the Western Balkans

The revision of the Multiannual Financial Framework includes the additional allocation for Western Balkans, which will be implemented through a new Reform and Growth Facility for the Western Balkans. The new Instrument will serve as the centrepiece of the Growth Plan for the Western Balkans by significantly increasing financial assistance based on an ambitious reform agenda focusing on necessary socioeconomic reforms coupled with fundamental reforms, including rule of law and targeted investments.

The Commission therefore proposes to make the necessary adjustments to the budget nomenclature, budget remarks and level of appropriations in this DAB 1. This includes creating three new budget lines for which the corresponding budget remarks are set out in the budgetary annex. Additionally, it is proposed to include and allocate an amount of EUR 501 million of commitment appropriations and 23,9 million of payment appropriations, in line with the legislative financial statement attached to the proposal for the Reform and Growth Facility for the Western Balkans Regulation 11 . Also, the amount of EUR 7,5 million proposed for technical and administrative support expenditure will also be used to finance external personnel. The amounts will be placed in reserve pending the adoption of the legal base.

EUR
Budget line	Name	Commitment appropriations	Payment appropriations
Section III – Commission
15 01 02	Support expenditure for the Reform and Growth Facility for the Western Balkans	p.m.	p.m.
15 03 01	Reform and Growth Facility for Western Balkans – Operational expenditure	p.m.	p.m.
15 03 02	Reform and Growth Facility for Western Balkans – Provisioning of the Common Provisioning Fund	p.m.	p.m.
30 02 01	Non-differentiated appropriations (Reserve for budget article 15 01 02)	7 450 000	7 450 000
30 02 02	Differentiated appropriations (Reserve for budget article 15 03 01)	403 550 000	p.m.
30 02 02	Differentiated appropriations (Reserve for budget article 15 03 02)	90 000 000	16 443 000
Total		501 000 000	23 893 000

2.5European Globalisation Adjustment Fund

The revision of the Multiannual Financial Framework foresees a reduction of the annual allocation of EGF for the period 2024-27, which shall not exceed a maximum amount of EUR 30 million (in 2018 prices, corresponding to EUR 33,8 million in 2024 prices). Consequently, a reduction of commitment appropriations in 2024 by EUR 175,7 million is proposed.

EUR
Budget line	Name	Commitment appropriations	Payment appropriations
Section III – Commission
30 04 02	Reserve for the European Globalisation Adjustment Fund for Displaced Workers (EGF)	-175 681 337	p.m.
Total		-175 681 337	p.m.

3.Adjustments stemming from the political agreement on the Artificial Intelligence Act (AI Office)

The initial Commission proposal for the Artificial Intelligence (AI) Act 12 was based on entirely national implementation, with only a minimal coordination role at European level. Accordingly, it included a staffing estimation of 10 officials and temporary staff at EU level, including the staff for the European Data Protector Supervisor (EDPS) as data controller for all AI applications launched by the European institutions.

However, the political agreement reached by the European Parliament and the Council in December 2023 on the establishment of the Artificial Intelligence Office is based on a completely different European coordination mechanism, with a vastly larger set of tasks and responsibilities. Therefore, considerably increased staffing levels are required to be able to effectively deliver on those tasks. The increased costs for the initiative to finance the external personnel and IT costs will have to be financed from the Digital Europe Programme, whereas the permanent establishment plan posts will be redeployed within the Commission and financed under heading 7.

On 9 January 2024 the Commission transmitted a revised Legislative Financial Statement to the European Parliament and the Council, which sets out the budgetary impact of the new governance model covering the period 2024-2027.

As regards staffing, the Commission was fully ready to address the initial staffing needs of up to ten posts under the intitially proposed model by reallocation and reprioritisation of resources within the institution, in line with the policy of stable staffing which the Commission has implemented since the start of the current MFF. However, at full cruising speed an estimated 100 staff will be needed to ensure the implementation of the agreed centralised model, of which 20 posts and 80 external staff as from 2025. Also given that the Commission has met the needs of other priority areas within its stable staffing policy over the past years, it is not possible to find such large staff numbers by redeployment, without jeopardising other critical ongoing activities. That is why the Commission issued a unilateral statement on the financing of human resources for the Artificial Intelligence Act in December 2023:

The Commission recalls that the final agreement reached by the co-legislators on the proposal for a Regulation laying down harmonised rules on artificial intelligence (Artificial Intelligence Act) has evolved significantly. It is much more extensive than the Commission initial proposal, entrusting many additional tasks and an additional enforcement role to the AI Office. As a consequence, it requires much more staff and resources, compared to the initial quantification made in the legislative financial statement which accompanied the original proposal, which was based on a national implementation, with only a minimal coordination role at European level.

The additional Commission human resources required by the final agreement endorsed by the co-legislators will not allow the Commission to respect the principle of stable staffing and will require additional resources, to be authorised by the European Parliament and the Council during the annual budgetary procedure along with the related budgetary appropriations.

Without any additional means, the options to finance the necessary administrative costs for staff of the Artificial Intelligence Office cannot be found. Heading 7 European Public Administration of the multiannual financial framework 2021-2027 was built on the principle of stable staffing, and there is no margin to finance additional officials and external staff. The Commission will internally redeploy the officials required for this initiative. However, for the additional staff needed, the new budget line to be created under the Digital Europe Programme will be used to finance them beyond the limit of the principle of stable staffing.

It is against this background that the Commission proposes in DAB 1 to adjust the budget remarks of the support expenditure for the Digital Europe Programme to allow recruiting staff and paying them from the corresponding budget line (02 01 30 01 – Support expenditure for the Digital Europe Programme).

The corresponding changes are set out in the budgetary annex.

4.Financing

Overall, the net impact of DAB 1 on expenditure amounts to an increase of EUR 5 833,7 million in commitment appropriations and EUR 4 143,6 million of payment appropriations.

5.Summary table by MFF Heading

							In EUR
		Budget 2024		Draft Amending Budget 1/2024		Budget 2024 (incl. DAB 1/2024)

		CA	PA	CA	PA	CA	PA
1	Single Market, Innovation and Digital	21 493 372 990	20 827 967 003			21 493 372 990	20 827 967 003
	Of which under Flexibility Instrument
	Ceiling	21 598 000 000				21 598 000 000
	Margin	104 627 013				104 627 013
2	Cohesion, Resilience and Values	74 560 690 949	33 715 996 204			74 560 690 949	33 715 996 204
	Of which under Flexibility Instrument	1 289 495 333				1 289 495 333
	Of which under Single Margin Instrument 11(1)(a)
	Ceiling	73 289 000 000				73 289 000 000
	Margin	17 804 384				17 804 384
2a.	Economic, social and territorial cohesion	64 665 195 616	24 155 654 152			64 665 195 616	24 155 654 152
	Of which under Flexibility Instrument
	Ceiling	64 683 000 000				64 683 000 000
	Margin	17 804 384				17 804 384
2b.	Resilience and values	9 895 495 333	9 560 342 052			9 895 495 333	9 560 342 052
	Of which under Flexibility Instrument	1 289 495 333				1 289 495 333
	Of which under Single Margin Instrument 11(1)(a)
	Ceiling	8 606 000 000				8 606 000 000
	Margin
3	Natural Resources and Environment	57 338 630 839	54 151 402 941			57 338 630 839	54 151 402 941
	Of which under Flexibility Instrument
	Ceiling	57 449 000 000				57 449 000 000
	Margin	110 369 161				110 369 161
	Of which: Market related expenditure and direct payments	40 517 278 000	40 505 482 213			40 517 278 000	40 505 482 213
	EAGF sub-ceiling	41 649 000 000				41 649 000 000
	Rounding difference excluded for calculating the sub-margin	722 000				722 000
	Net transfers between EAGF and EAFRD	-1 046 000 000				-1 046 000 000
	Net balance available for EAGF expenditure (sub-ceiling corrected by transfers between EAGF and EAFRD)	40 603 000 000				40 603 000 000
	EAGF sub-margin	85 722 000				85 722 000
4	Migration and Border Management	3 892 705 671	3 248 967 443			3 892 705 671	3 248 967 443
	Of which under Flexibility Instrument
	Ceiling	4 020 000 000				4 020 000 000
	Margin	127 294 329				127 294 329
5	Security and Defence	2 321 177 926	2 035 413 531	376 000 000		2 697 177 926	2 035 413 531
	Of which under Flexibility Instrument	317 177 926				317 177 926
	Of which under Single Margin Instrument 11(1)(a)
	Ceiling	2 004 000 000		376 000 000		2 380 000 000
	Margin
6	Neighbourhood and the World	16 230 000 000	15 291 157 313	501 000 000	23 893 000	16 731 000 000	15 315 050 313
	Of which under Flexibility Instrument	28 828 204				28 828 204
	Of which under Single Margin Instrument 11(1)(a)	371 171 796				371 171 796
	Ceiling	15 830 000 000		501 000 000		16 331 000 000
	Margin
7	European Public Administration	11 988 000 603	11 988 000 603			11 988 000 603	11 988 000 603
	Of which under Flexibility Instrument
	Of which under Single Margin Instrument 11(1)(a)	215 000 603				215 000 603
	Ceiling	11 773 000 000				11 773 000 000
	Margin
	of which: Administrative expenditure of the institutions	9 175 375 841	9 175 375 841			9 175 375 841	9 175 375 841
	Sub-ceiling	9 006 000 000				9 006 000 000
	Sub-margin
Appropriations for headings		187 824 578 975	141 258 905 038	877 000 000	23 893 000	188 701 578 975	141 282 798 038
	Ceiling	185 963 000 000	170 543 000 000	877 000 000		186 840 000 000	170 543 000 000
	Of which under Flexibility Instrument	1 635 501 463	1 734 392 297			1 635 501 463	1 734 392 297
	Of which under Single Margin Instrument 11(1)(a)	586 172 399				586 172 399
	Margin	360 094 887	31 018 487 259		-23 893 000	360 094 887	30 994 594 259
	Thematic special instruments	1 560 861 211	1 371 395 001	4 956 739 221	4 119 681 558	6 517 600 432	5 491 076 559
Total appropriations		189 385 440 186	142 630 300 039	5 833 739 221	4 143 574 558	195 219 179 407	146 773 874 597

(1) Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union and repealing Decision 2014/335/EU, Euratom, OJ L 424, 15.12.2020.

(2) Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027, OJ L 433I , 22.12.2020, p. 11.

(3) Council Regulation (EU, Euratom) 2024/765 of 29 February 2024 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027, OJ L, 2024/765, 29.02.2024.

(4) Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012, OJ L 193, 30.7.2018.

(5) OJ L, 2024/207, 22.2.2024.

(6) COM(2024) 110 final

(7) Regulation (EU) 2024/792 of the European Parliament and of the Council of 29 February 2024 establishing the Ukraine Facility, OJ L, 2024/792, 29.02.2024.

(8) Regulation (EU) 2024/795 of the European Parliament and of the Council of 29 February 2024 establishing the Strategic Technologies for Europe Platform (STEP), and amending Directive 2003/87/EC and Regulations (EU) 2021/1058, (EU) 2021/1056, (EU) 2021/1057, (EU) No 1303/2013, (EU) No 223/2014, (EU) 2021/1060, (EU) 2021/523, (EU) 2021/695, (EU) 2021/697 and (EU) 2021/241, OJ L, 2024/795, 29.02.2024.

(9) COM(2023) 335 final

(10) Council regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund (OJ L 311, 14.11.2002, p. 3), as last amended by Regulation (EU) 2020/461 of the European Parliament and of the Council of 30 March 2020 (OJ L 99, 31.3.2020, p. 9).

(11) COM(2023) 692 final

(12) COM(2021) 206 final