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Document 52020DC0900

DRAFT AMENDING BUDGET N°8 TO THE GENERAL BUDGET 2020 Increase of payment appropriations for the Emergency Support Instrument to finance the COVID-19 vaccines strategy and for the impact of the Corona Response Investment Initiative Plus

COM/2020/900 final

Brussels, 28.8.2020

COM(2020) 900 final

DRAFT AMENDING BUDGET N°8
TO THE GENERAL BUDGET 2020

Increase of payment appropriations for the Emergency Support Instrument to finance the COVID-19 vaccines strategy and for the impact of the Corona Response Investment Initiative Plus


   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,

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 (…) 1 , and in particular Article 44 thereof,

the general budget of the European Union for the financial year 2020, as adopted on 27 November 2019 2 ,

amending budget N°1/2020 3 , adopted on 17 April 2020,

amending budget N°2/2020 4 , adopted on 17 April 2020,

amending budget N°3/2020 5 , adopted on 17 June 2020,

amending budget N°4/2020 6 , adopted on 17 June 2020,

amending budget N°5/2020 7 , adopted on 10 July 2020,

draft amending budget No 7/2020 8 , adopted on 3 July 2020,

The European Commission hereby presents to the European Parliament and to the Council Draft Amending Budget N°8/2020 to the 2020 budget.

CHANGES TO THE STATEMENT OF REVENUE AND EXPENDITURE BY SECTION

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

TABLE OF CONTENTS

1.    Introduction    

2.    Increase in payment appropriations for the Emergency Support Instrument (ESI)    

3.    Increase in payment appropriations linked to the CRII+    

4.    Financing    

5.    Summary table by MFF heading    

EXPLANATORY MEMORANDUM

1.    Introduction

The purpose of Draft Amending Budget (DAB) No 8 for the year 2020 is to provide EUR 6,2 billion in payment appropriations to incorporate (i) additional needs for payments appropriations for the Emergency Support Instrument (ESI) to finance the COVID-19 vaccines strategy and (ii) the additional payment needs for cohesion following the adoption of the Corona Response Investment Initiative Plus (CRII+) 9 .

2.Increase in payment appropriations for the Emergency Support Instrument (ESI)

When the Emergency Support Instrument was activated in April 2020 in the framework of the COVID-19 crisis, a very broad series of potential support actions were envisaged based on an initial needs assessment drawn by the Commission in collaboration with Member States. Emergency support funding was aimed to be deployed were it would be most needed and where it would bring clear EU added value. Given the wide range of possible actions, it was originally foreseen that, of the EUR 2,7 billion in commitments authorised by the budget authority, only around half of the payments, EUR 1,38 billion, would be needed in 2020, with the rest arising in following years.

As the crisis evolved, the Commission has adopted several decisions 10 to use Emergency Support funding to support a series of actions such as: assistance to transport essential goods, medical teams and patients affected by COVID-19 (mobility package); procurement of essential health-related products; support for the increase in testing capacities; making more treatments available for COVID-19 patients; support for the interoperability of digital tracing apps and the distribution of disinfection robots for hospitals.

In the course of the evolution of the pandemic and as higlighted in the Commission Communication on a vaccine strategy 11 , it has become clear that a permanent solution to the crisis will most likely be brought about by the development and deployment of an effective and safe vaccine against the virus. Consequently, the search for an effective vaccine has become a priority and the Commission has concluded an agreement with all Member States to negotiate and conclude Advance Purchase Agreements (APAs) on behalf of all Member States with vaccine manufacturers. In these APAs, ESI provides the necessary up-front financing to de-risk essential investments in order to increase the speed and scale of manufacturing successful vaccines. In return, they provide the right to Member States to buy a specific number of vaccine doses within a given timeframe and at a given price. The Commission has already concluded one APA with a vaccine manufacturer in August 2020 and is currently conducting advanced negotiations with a number of other manufacturers.

The APA incentivises vaccine manufacturers to build up production capacity substantially faster than in the context of usual vaccine development, for which they require upfront cash to de-risk their investments implying early upfront payments from the Commission following very closely in time the commitments (often within days after the signature of the contract).

As a result, the current payment appropriations under the ESI are insufficient to cover the contractual obligations that the Commission envisages to take in the short-term with vaccine manufacturers. In order to allow the European Union to secure access to a portofolio of vaccine candidates to maximise the chance of having an effective and safe vaccine available as soon as possible, it is therefore paramount to make the additional payments available as soon as possible. In view of the above, it is proposed to make available sufficient payment appropriations under the ESI in 2020 to cover (a) all the relevant commitments that the Commission will undertake with vaccine manufacturers on behalf of Member States as well as (b) the other ongoing actions. Payment needs in future years will be reduced accordingly.

Considering the reforcement of EUR 140 million already approved by the budget authority in the course of July 2020, the amount of additional payment appropriations needed in 2020 is EUR 1 090 million bringing the total payments for ESI to EUR 2 610 million. The remaining EUR 90 million will be paid in 2021 for commitments not related to the vaccine strategy.

It is also proposed to transfer EUR 53,75 million in commitments and payments from the administrative support expenditure line to the operational line of the Instrument. The total amount of commitment and payment appropriations on the support line of ESI will thus be decreased to EUR 250 000.

EUR

Budget line

Name

Commitment appropriations

Payment appropriations

Section III – Commission

18 01 04 05

Support expenditure for emergency support within the Union

-53 750 000

-53 750 000

18 07 01

Emergency support within the Union

53 750 000

1 143 750 000

Total    

0

1 090 000 000

3.    Increase in payment appropriations linked to the CRII+

The Commission has proposed in March and April 2020 two packages of measures: the Coronavirus Response Investment Initiative (CRII) 12 and the Coronavirus Response Investment Initiative Plus (CRII+) 13 , which were swiftly adopted by the European Parliament and the Council.

Member States are making full use of the flexibilities and liquidities offered by Cohesion funds to help those most impacted: healthcare workers and hospitals, SMEs, and workers. The implementation of the initiative is ongoing and Member States continue to adopt measures in line with the evolving needs. While standard cohesion support focuses on long-term investments for regional convergence, the CRII and CRII+ packages provided emergency response where it was most needed.

As a result of the Coronavirus Response Investment Initiative (CRII) adopted on 30 March 2020, around EUR 8 billion of investment liquidity were released for programmes under the Cohesion policy. In order to ensure that all non-committed support from the cohesion policy funds can be mobilised in 2020 to address the effects of the COVID-19 outbreak on Member States’ economies and societies, the Commission has further proposed the CRII+, which was adopted by the European Parliament and Council. It provides on a temporary basis the possibility for Member States to request 100% EU co-financing for the programmes supported by the European Regional Development Fund, the European Social Fund and the Cohesion Fund for the accounting year starting on 1 July 2020 and ending on 30 June 2021, and increased transfer possibilities between funds as well as between categories of regions. As of 24 August 2020, 107 programmes, covering almost half of the cohesion policy envelope, have opted for the 100% EU-cofinancing rate.

The Commission performed an in-depth analysis of the forecasts submitted by Member States by the end of July 2020 at the level of each programme and considers that a reinforcement of EUR 5,1 billion in payment appropriations is needed in order to cover all expected payable payment applications to be paid in 2020.

The request for reinforcement of payment appropriations in heading 1b amounts to EUR 5,1 billion, broken down as follows:

EUR

Budget line

Name

Commitment appropriations

Payment appropriations

Section III – Commission

04 02 60

European Social Fund — Less developed regions — Investment for growth and jobs goal

-

771 562 000

04 02 61

European Social Fund — Transition regions — Investment for growth and jobs goal

-

192 891 000

04 02 62

European Social Fund — More developed regions — Investment for growth and jobs goal

-

397 128 000

04 02 64

Youth Employment Initiative

-

68 419 000

04 06 01

Promoting social cohesion and alleviating the worst forms of poverty in the Union

-

70 000 000

13 03 60

European Regional Development Fund (ERDF) — Less developed regions — Investment for growth and jobs goal

-

1 882 287 000

13 03 61

European Regional Development Fund (ERDF) — Transition regions — Investment for growth and jobs goal

-

311 128 000

13 03 62

European Regional Development Fund (ERDF) — More developed regions — Investment for growth and jobs goal

-

424 520 000

13 03 63

European Regional Development Fund (ERDF) — Additional allocation for outermost and sparsely populated regions — Investment for growth and jobs goal

-

20 386 000

13 03 64 01

European Regional Development Fund (ERDF) — European territorial cooperation

-

122 353 000

13 04 60

Cohesion Fund — Investment for growth and jobs goal

-

839 326 000

Total    

0

5 100 000 000

4.    Financing

The draft amending budget No 6/2020 14 was based on the assumption that the 2014-20 MFF would be increased. However, following the conclusion of the European Council of 21 July, it is clear that this avenue will not be pursued and the draft amending budget No 6/2020 has become de facto obsolete. For this reason, this DAB N° 8 does not take into account that proposal and the expenditure is proposed starting from the level of the last adopted budget (AB 5/2020) and the financing as proposed in DAB N° 7/2020. 

5.Summary table by MFF heading

In EUR

Heading

Budget 2020

Draft Amending Budget 8/2020

Budget 2020

(incl. AB 1-5 & DAB 7/2020)

(incl. AB 1-5 & DAB 7-8/2020)

CA

PA

CA

PA

CA

PA

1.

Smart and inclusive growth

83 930 597 837

72 353 828 442

5 100 000 000

83 930 597 837

77 453 828 442

Ceiling

83 661 000 000

 

 

83 661 000 000

 

Margin

 

 

 

 

1a

Competitiveness for growth and jobs

25 284 773 982

22 308 071 592

 

 

25 284 773 982

22 308 071 592

Of which under global margin for commitments

93 773 982

 

 

 

93 773 982

 

Ceiling

25 191 000 000

 

 

 

25 191 000 000

 

Margin

 

 

 

 

1b

Economic  social and territorial cohesion

58 645 823 855

50 045 756 850

 

5 100 000 000

58 645 823 855

55 145 756 850

Of which under global margin for commitments

175 823 855

 

 

 

175 823 855

 

Ceiling

58 470 000 000

 

 

 

58 470 000 000

 

Margin

 

 

 

 

2.

Sustainable growth: natural resources

59 907 021 051

57 904 492 439

 

 

59 907 021 051

57 904 492 439

Ceiling

60 421 000 000

 

 

 

60 421 000 000

 

Of which offset against Contingency margin

- 465 323 871

 

 

 

- 465 323 871

 

Margin

48 655 078

 

 

 

48 655 078

 

Of which: European Agricultural Guarantee Fund (EAGF) — Market related expenditure and direct payments

43 410 105 687

43 380 031 798

 

 

43 410 105 687

43 380 031 798

Sub-ceiling

43 888 000 000

 

 

 

43 888 000 000

 

Rounding difference excluded from margin calculation

888 000

 

 

 

888 000

 

Of which offset against Contingency margin

- 428 351 235

 

 

 

- 428 351 235

 

EAGF Margin

48 655 078

 

 

 

48 655 078

 

3.

Security and citizenship

7 152 374 489

5 278 527 141

 

1 090 000 000

7 152 374 489

6 368 527 141

Of which under Flexibility Instrument

1 094 414 188

 

 

 

1 094 414 188

 

Of which under global margin for commitments

2 392 402 163

 

 

 

2 392 402 163

 

Of which under Contingency margin

714 558 138

 

 

 

714 558 138

 

Ceiling

2 951 000 000

 

 

 

2 951 000 000

 

Margin

 

 

 

 

4.

Global Europe

10 991 572 239

9 112 061 191

 

 

10 991 572 239

9 112 061 191

Of which under Contingency margin

481 572 239

 

 

 

481 572 239

 

Ceiling

10 510 000 000

 

 

 

10 510 000 000

 

Margin

 

 

 

 

5.

Administration

10 271 193 494

10 274 196 704

 

 

10 271 193 494

10 274 196 704

Ceiling

11 254 000 000

 

 

 

11 254 000 000

 

Of which offset against Contingency margin

- 982 806 506

 

 

 

- 982 806 506

 

Margin

 

 

 

 

Of which: Administrative expenditure of the institutions

7 955 303 132

7 958 306 342

 

 

7 955 303 132

7 958 306 342

Sub-ceiling

9 071 000 000

 

 

 

9 071 000 000

 

Of which offset against Contingency margin

- 982 806 506

 

 

 

- 982 806 506

 

Margin

132 890 362

 

 

 

132 890 362

 

Total

172 252 759 110

154 923 105 917

6 190 000 000

172 252 759 110

161 113 105 917

Of which under Flexibility Instrument

1 094 414 188

1 017 029 444

 

1 094 414 188

1 017 029 444

Of which under global margin for commitments

2 662 000 000

 

 

2 662 000 000

 

Of which under Contingency margin

1 196 130 377

 

 

1 196 130 377

 

Ceiling

168 797 000 000

172 420 000 000

 

168 797 000 000

172 420 000 000

Of which offset against Contingency margin

-1 448 130 377

 

-1 448 130 377

Margin

48 655 078

18 513 923 527

 

 

48 655 078

12 323 923 527

 

Other special Instruments

860 261 208

690 998 208

 

 

860 261 208

690 998 208

Grand Total

173 113 020 318

155 614 104 125

6 190 000 000

173 113 020 318

161 804 104 125

(1)      OJ L 193, 30.7.2018.
(2)      OJ L 57, 27.2.2020.
(3)      OJ L 126, 21.4.2020.
(4)      OJ L 126, 21.4.2020.
(5)      OJ L 254, 04.8.2020.
(6)      OJ L 254, 04.8.2020.
(7)      OJ L XXX, XX.X.2020.
(8)      COM(2020) 424, 6.7.2020
(9)      Regulation (EU) 2020/558 of the European Parliament and of the Council of 23 April 2020 amending Regulations (EU) No 1301/2013 and (EU) No 1303/2013 as regards specific measures to provide exceptional flexibility for the use of the European Structural and Investments Funds in response to the COVID-19 outbreak, OJ L 130, 24.4.2020, p. 1.
(10)    Commission Decision C(2020)2794 on the financing of Emergency Support under Council Regulation (EU) 2016/369; Commission Decision C(2020)4193 amending Decision C(2020)2794 as regards the financing of the Vaccine Instrument; Commission Decision C(2020)5162 amending Decision C(2020) 2794 as regards the financing of additional actions under the Emergency Support Instrument and the increase of the budget of the Vaccine Instrument.
(11)    COM(2020)245 final of 17 June 2020.
(12)      Regulation (EU) 2020/460 of the European Parliament and of the Council of 30 March 2020 amending Regulations (EU) No 1301/2013, (EU) No 1303/2013 and (EU) No 508/2014 as regards specific measures to mobilise investments in the healthcare systems of Member States and in other sectors of their economies in response to the COVID-19 outbreak (Coronavirus Response Investment Initiative), OJ L 99, 31.3.2020, p. 5–8
(13)    Regulation (EU) 2020/558 of the European Parliament and of the Council of 23 April 2020 amending Regulations (EU) No 1301/2013 and (EU) No 1303/2013 as regards specific measures to provide exceptional flexibility for the use of the European Structural and Investments Funds in response to the COVID-19 outbreak, OJ L 130, 24.4.2020, p. 1
(14)      COM(2020) 423, 3.6.2020
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