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Flexibility and Special instruments

 

Flexibility mechanisms enable the EU to mobilise the necessary funds to react to unforeseen events such as crisis and emergency situations. Their scope, financial allocation and operating modalities are provided for in the MFF regulation and the Interinstitutional Agreement. In the current context of reduced expenditure, they also ensure that budgetary resources can respond to evolving priorities, so that every euro is used where it is most needed. Most of the flexibility mechanisms are therefore kept outside the MFF and the funding can be mobilised above the expenditure ceilings.

Taking into account past experience, the scope for intervention for some special instruments, such as the Emergency Aid Reserve has been broadened, the maximum allocation increased and the carrying over of unused amounts to the following year(s) has been allowed.

  • Emergency Aid Reserve – maximum €280 million per year

    The Emergency Aid Reserve is designed to finance humanitarian, civilian crisis management and protection operations in non-EU countries in order to quickly respond to unforeseen events. For example, the Emergency Aid Reserve was mobilised in 2012 following the outbreak of conflict in Syria, the conflicts in Mali and the drought in the Sahel.

  • Solidarity Fund - maximum €500 million per year

    The EU Solidarity Fund aims to release emergency financial aid following a major disaster in a Member State or candidate country, such as the 2009 earthquake in the Italian Abruzzo region or the 2012 floods in Germany. Aid is managed by the recipient country, and should be used to rebuild basic infrastructure, fund emergency services, temporary accommodation or clean-up operations, or counter immediate health risks.

  • Flexibility instrument - maximum €471 million per year

    The Flexibility instrument provides funding for clearly identified expenses which cannot be covered by the EU budget without exceeding the maximum annual amount for expenditure set out in the MFF. For example, the Flexibility instrument was used in 2009 to contribute to the financing of energy projects in the context of the European Economic Recovery Plan and to the decommissioning of a nuclear power plant in Bulgaria.

  • European Globalisation Adjustment Fund - maximum €150 million per year

    The European Globalisation Fund aims to help workers reintegrate into the labour market after they have been made redundant as a result of major structural changes in world trade patterns (e.g: as a consequence of the global financial and economic crisis). For example, it supported Belgian workers after the General Motors Antwerp plant closed-down.

In addition to these existing instruments, new flexibility measures have been introduced in the MFF 2014-2020:

  • Flexibility for payments: under certain conditions and within the overall ceilings set in the MFF, unused payment appropriations and margins can be carried over from one financial year to the next. The payment ceiling of the years in which the unused margins arise must be cut accordingly in order to leave the overall ceiling unchanged.
  • Flexibility for commitments in growth and employment: commitment appropriations left unused in 2014-17 will form a reserve for additional expenditure in 2016-20 in the area of growth and employment (in particular for youth employment).
  • Special flexibility for youth employment and research: in order to concentrate a maximum of funds where they are the most needed as early as possible, up to €2.1 billion can be brought forward to 2014-15 for the Youth Employment Initiative and up to €400 million for research, Erasmus and SMEs.
  • Flexibility for aid to the most deprived: on a voluntary basis, Member States can increase their allocation for the aid to the most deprived by €1 billion.
  • Contingency Margin: this is a last resort instrument to react to unforeseen circumstances and amounts to 0.03 % of the EU's gross national income (GNI).
 

Related links:

Publication:

The EU Budget: Where does the money go? cover
The EU Budget: Where does the money go?