BUDGETARY SUPPORT UNIT - europarl.europa.eu€¦ · February 2006, the Committee on Budgetary...

JA

STUDY

BUDGETARY SUPPORT UNIT

AGENCIES' DISCHARGE

BUDGETARY AFFAIRS

EN12/12/2006

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This study was requested by the European Parliament's Committee on Budgetary Control. This paper is published in the following languages: - Original: EN Author: Fabia JONES Budgetary Support Unit B-1047 Brussels Tel: +32 (0)2 283.12.80 Fax: +32(0)2 284.90.12 E-mail: [email protected] Responsible Official: Anne VITREY Budgetary Support Unit B-1047 Brussels Tel: +32 (0)2 284.47.05 Fax: +32(0)2 284.49.07 E-mail: [email protected] Manuscript completed in December 2006 Copies can be obtained through: E-mail: [email protected] Site intranet: http://www.ipolnet.ep.parl.union.eu/ipolnet/cms/pid/1517 Brussels, European Parliament, 2006. The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorized, provided the source is acknowledged and the publisher is given prior notice and sent a copy.

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CONTENTS

Executive summary ................................................................................................................................ 5

1. INTRODUCTION ............................................................................................................................. 7

2. WHAT IS AN AGENCY?................................................................................................................ 7

2.a. Decentralised agencies ........................................................................................................... 8

2.b. Executive agencies .................................................................................................................. 9

2.c. Other agencies .......................................................................................................................... 9

3. DISCHARGE PROCEDURES FOR THE AGENCIES CURRENTLY IN FORCE................. 9

3.a. Decentralised agencies ......................................................................................................... 10

3.a.i. Community agencies............................................................................................................... 10

3.a.ii Union agencies....................................................................................................................... 11

3.b. Executive agencies ................................................................................................................ 12

3.c. Other agencies ........................................................................................................................ 13

4. GROWTH OF THE AGENCIES .................................................................................................. 14

5. ANALYSIS...................................................................................................................................... 16

5.a. Legal background: the theory ............................................................................................. 17

5.b. Legal background: the practice .......................................................................................... 19

6. CONCLUSIONS ............................................................................................................................ 23

7. NEXT STEPS ................................................................................................................................. 24

ANNEX 1 Agencies established or under consideration ........................................................... 26

ANNEX 2 Accountability in agencies not subject to parliamentary discharge.................... 28

ANNEX 3 Decentralised agencies: grants from the EU budget ............................................... 30

ANNEX 4 Other agencies: grants from the EU budget............................................................... 34

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Executive summary Article 185(2) of the Financial Regulation requires the European Parliament to give discharge to the agencies, separately from the discharge to the Commission on the general budget. Article 185(1) contains the rules setting out which agencies should be subject to the separate agency discharge procedure. During the 2004 discharge exercise, inconsistencies in the application of article 185 became apparent. At its meeting of 22 February 2006, the Committee on Budgetary Control decided to commission an internal study to look into this question and named as rapporteur the 2004 agencies' discharge rapporteur, Mr Umberto Guidoni. The study finds that: - the rules as set out in article 185 of the Financial Regulation are indeed inconsistently applied: some agencies that do not fall within the scope of article 185 are subjected to the agencies' discharge procedure, whilst other agencies that do fall within its scope are not; - and that article 185 is itself inconsistent with, and more restrictive than, other articles in the Financial Regulation and other legal texts, which imply that all agencies should be subject to separate Parliamentary discharge. These findings are consistent with the European Parliament's call, as set out in the agency discharge resolutions adopted on 27 April 2004, for Parliamentary discharge to be extended to all agencies. After a brief introduction listing the agencies covered by the 2004 agencies' discharge procedure, the study begins by examining the definition of agencies as set down in legislation: "bodies set up by the Communities having legal personality"1. Three categories of agencies fitting this definition can be distinguished: decentralised agencies, executive agencies and other agencies. There are a total of 31 agencies established within these three categories and a further 8 under consideration (9 including the transformation of one of the existing agencies). However, only 14 agencies were covered by the 2004 agencies' discharge procedure. The next section of the study looks at the conditions as set out in article 185 of the Financial Regulation for requiring separate Parliamentary discharge for an agency, and compares this with the discharge procedures actually in force for each agency. While a number of agencies were too new to have been subject to Parliamentary discharge in 2004, an even greater number of agencies were not, and will never be, subject to separate Parliamentary discharge without legislative change. In addition, a number of inconsistencies between the rules and the discharge procedures actually in place are identified. Following a description of the rapid growth of the agencies is described in the following section, the next section looks at the background to the separate Parliamentary discharge procedure for the agencies, which lies in an attempt to ensure that the benefits of decentralisation are not outweighed by reduced transparency, accountability and control, and its legal underpinnings. The principles underlying the Financial Regulation require all agencies to be in the general budget. The European Parliament is required by Treaty to give discharge regarding the implementation of the general budget. Thus all agencies

1 See, for example, article 185(1) of the Financial Regulation.

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should be subject to Parliamentary discharge. Article 185 of the Financial Regulation, which restricts Parliament's discharge powers to a subset of agencies, and specifically those "which actually receive grants charged to the budget", is inconsistent with the rest of the Financial Regulation and its underlying principles. Inconsistencies also exist in the practical implementation of the rules underlying the agencies' discharge, at all stages of the process. There are inconsistencies in the inclusion of the agencies in the general budget, in the transmission of the accounts to the discharge authority, in the involvement of the Court of Auditors in the audit of the agencies' accounts and budgets and in the application of article 185 of the Financial Regulation itself. The study therefore concludes that separate Parliamentary discharge should apply to all agencies carrying out activities on behalf of the Union, in all three pillars, irrespective of whether they are in direct receipt of funds from the Community budget. A final section looks at next steps necessary to implement this conclusion. Each agency should have its own separate budget line in the general budget, and the general budget should include the establishment plans of all agencies and details of all agencies' own budgets. Revision of article 185 of the Financial Regulation also appears essential. The basic texts of some of the agencies, Parliament’s Rules of Procedure and the Interinstitutional agreement on the regulatory agencies also need to be revised accordingly. Pending revision of the legal texts, a suggestion is made for the establishment of a "shadow" discharge procedure for the agencies not currently covered by the separate Parliamentary discharge procedure.

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1. INTRODUCTION Article 276 of the EC Treaty requires the European Parliament to give discharge to the Commission in respect of the implementation of the budget. Discharge to the Commission covers the entire budget, including the revenue and expenditure of the various institutions (the European Parliament, the Council, the Court of Auditors, the Court of Justice, the Committee of the Regions, the Economic and Social Committee, the Ombudsman and the European Data Protection Supervisor) and bodies (the agencies) of the Union. However, article 185 of the Financial Regulation1 requires the European Parliament to give discharge separately to the agencies. The following agencies were covered by the 2004 agencies' discharge procedure:

• European Centre for the Development of Vocational Training • European Foundation for the Improvement of Living and Working Conditions • European Environment Agency • European Training Foundation • European Monitoring Centre for Drugs and Drug Addiction • European Medicines Agency • European Agency for Health and Safety at Work • Translation Centre for the Bodies of the European Union • European Monitoring Centre on Racism and Xenophobia • European Agency for Reconstruction • European Food Safety Authority • European Maritime Safety Agency • European Aviation Safety Agency • Eurojust

For an agency to be subject to separate Parliamentary discharge, it should fit the definition of an agency and fall within the scope of agencies subject to Parliamentary discharge as set out in Article 185 of the Financial Regulation. Definition and scope are examined in the next two sections.

2. WHAT IS AN AGENCY? Article 185(1) of the Financial Regulation defines agencies as "bodies set up by the Communities having legal personality". Within this definition, three distinct categories of agency may be identified: decentralised agencies, executive agencies and other bodies fitting this definition such as joint undertakings and the proposed European Institute of Technology. A complete list can be found in Annex 1.

1 OJ L 248, 16.9.2002, p.1.

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2.a. Decentralised agencies Decentralised agencies, also known as "traditional agencies" or "satellite agencies" or "regulatory agencies", all share the following characteristics: they are bodies (as distinct from institutions eg Commission, Parliament, Council etc) with legal personality that are created by the legislator (either Council or Parliament and Council, depending on the policy area in which the agency operates). The first decentralised agencies - the European Centre for the Development of Vocational Training and the European Foundation for the Improvement of Living and Working Conditions - were created in the 1970s following recognition by the Commission that use of bodies independent of the Commission, but which cooperate with it in full, allowed to focus on and be identified with the achievement of specific policy objectives, can lead to improved effectiveness. A second generation of agencies followed in the 1990s linked to the completion of the internal market. Since the creation of the Reconstruction agency in 2000, a third wave has followed. This new generation of agencies is in line with the proposals in the Commission Communication on European Governance1 presented in the context of the Commission's administrative reforms, which aims at improving the application and enforcement of EU rules and enhancing visibility and efficiency whilst allowing the Commission to focus on its core tasks. The reasons given in the individual regulations setting up the various agencies include the following:

• to manage a discrete process (eg collation of information) • to provide a specific service (eg translation) • to be closer to stakeholders • to involve business partners • to employ specialist/technical expertise • to reinforce the independence of specialist committees • to provide legal, administrative and financial autonomy • to carry out regulatory tasks (eg issue of certificates)

To reflect this diversity, the agencies that fall within this category have a variety of names, eg agency, centre, monitoring centre, foundation, authority, office etc. The first agencies of this kind were first pillar, Community agencies. More recently, agencies have also been set up under the second and third pillars of the European Union.

1 European Governance: A White Paper, COM(2001) 428 final, 25.7.2001.

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2.b. Executive agencies These agencies have their own legal personality but are created and dissolved by the Commission. The executive agencies were developed to take over certain management tasks from the Commission and to replace the poorly managed and inadequately supervised technical assistance offices (commonly known by the French acronym, BATs for Bureaux d'Assistance Technique). Under close Commission supervision, the executive agencies can carry out tasks such as budget implementation, technical and financial monitoring of projects and dissemination of results. The Commission argues that use of such agencies will make it more accountable to the citizens by allowing it to focus on its institutional tasks, and may allow the goals of Community programmes to be achieved more effectively1.

2.c. Other agencies Article 171 of the EC Treaty allows for the creation of joint undertakings in the field of research, technological development and demonstration programmes. A joint undertaking is a legal entity created by the legislator which provides a single management structure for the implementation of Community programmes that are to be funded by both the Community budget and other sources. Joint undertakings fit the definition of "bodies set up by the Communities having legal personality" as set out in article 185(1) of the Financial Regulation and should therefore be considered as agencies. The Commission has brought forward a proposal for a European Institute of Technology, to be established under article 157(3) of the EC Treaty, which would be a Community body with legal personality created by the legislator under the co-decision procedure. It would thus also fit the definition of an agency set out in article 185(1) of the Financial Regulation.

3. DISCHARGE PROCEDURES FOR THE AGENCIES CURRENTLY IN FORCE

According to Rule 71 of the European Parliament's Rules of Procedure, agencies shall be subject to discharge from the European Parliament "insofar as their activities are subject to legal provisions requiring discharge by the European Parliament". Article 185 of the Financial Regulation applies Parliamentary discharge to "the bodies set up by the Communities having legal personality which actually receive grants charged to the budget".

1 COUNCIL REGULATION (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes, OJ L 11, 16.1.2003, p.1.

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This section details the agencies covered by separate Parliamentary discharge. A description of accountability and discharge procedures in each of the agencies not subject to Parliamentary discharge can be found in Annex 2.

3.a. Decentralised agencies The majority of the decentralised agencies are Community agencies but there are also several agencies created under the second and third pillars of the European Union. There are currently 27 decentralised agencies in total, across all three pillars, and 2 more in the pipeline. A third new decentralised agency currently under discussion would replace one of the existing agencies. A complete list of all decentralised agencies either established or under consideration can be found in annex 1.

3.a.i. Community agencies Some Community agencies are fully financed by the Community budget, some are partially financed by the Community budget and partially self-financed (eg the Medicines Agency), and some are fully self-financed (eg the Plant Variety Office and the Office for Harmonisation in the Internal Market - OHIM). Those that receive full or partial funding from the Community budget are all subject to discharge from Parliament. The self-financed agencies (eg the Plant Variety Office and OHIM are not subject to discharge from Parliament. The Translation Centre is subject to discharge from Parliament. However, the question of whether or not it receives funding from the budget is the subject of a long-running dispute between the Commission and the Centre1.

1 Fully self-financed agencies have to pay their own employers' pension contributions; the Commission pays the contributions of the agencies that are fully or partially financed by the budget. The Commission considers that the Translation Centre is self-financed and should pay its own employers' pension contributions. The Centre, however, argues that it is in receipt of funding from the budget and that the Commission should, therefore, pay the employers' pension contributions. The Commission and the Centre have been unable to reach an agreement on this issue and the Commission has now taken out proceedings against the Centre for non-payment of employers' pension contributions before the Court of Justice.

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Table 1: Community agencies - discharge procedure currently in force

Receive grant from budget

Receive separate discharge from

Parliament European Centre for the Development of Vocational Training Yes Yes European Foundation for the Improvement of Living and Working Conditions Yes Yes European Environment Agency Yes Yes European Training Foundation Yes Yes European Monitoring Centre for Drugs and Drug Addiction Yes Yes European Medicines Agency Yes Yes Office for Harmonisation in the Internal Market (Trade Marks and Designs) No No European Agency for Health and Safety at Work Yes Yes Community Plant Variety Office No No Translation Centre for the Bodies of the European Union ? Yes European Monitoring Centre on Racism and Xenophobia Yes Yes

European Agency for Reconstruction Yes Yes European Food Safety Authority Yes Yes European Maritime Safety Agency Yes Yes European Aviation Safety Agency Yes Yes European Network and Information Security Agency Yes Yes* European Centre for Disease Prevention and Control Yes Yes* European Railway Agency Yes Yes* European Global Navigation Satellite System Supervisory Authority Yes Yes* European Agency for the Management of Operational Coordination at the External Borders of the Member States of the European Union

Yes Yes*

Community Fisheries Control Agency Yes Yes* * Parliamentary discharge for these agencies is foreseen in their legal bases. So although they did not receive separate parliamentary discharge during the 2004 exercise because they wee too new to have their own separate accounts, they will receive separate parliamentary discharge in due course. The discharge procedures applicable to the two Community agencies not subject to Parliamentary discharge - OHIM and the Plant Variety Offices - are detailed in annex 2.

3.a.ii Union agencies According to the Financial Regulation1, in addition to the revenue and expenditure of the Communities the general budget shall include the "administrative expenditure occasioned for the institutions by the provisions of the Treaty on European Union relating to the common foreign and security policy and police and judicial cooperation in criminal matters, and the operating expenditure occasioned by implementation of those provisions where this is charged to the budget".

1 Article 4(2)(a).

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There are currently six agencies set up under the provisions of the Treaty of European Union. All those that receive grants from the Community budget are subject to discharge from Parliament; the others are not. Table 2: Union agencies - discharge procedure currently in force Receive grant

from budget Receive

discharge from Parliament

European Institute for Security Studies No No European Union Satellite Centre No No European Defence Agency No No European Police Office No No European Police College Yes* Yes* Eurojust Yes Yes * The European Police College began receiving a grant from the Community budget and became subject to discharge from the European Parliament only following modifications to its legal base adopted in 20051, and was not therefore subject to the Parliamentary agencies' discharge procedure in 2004. Discharge procedures applicable in the Union agencies not subject to discharge from the European Parliament are detailed in annex 2.

3.b. Executive agencies The executive agencies fulfil the conditions laid down in article 185 of the Financial Regulation for Parliamentary discharge and their administrative budgets are thus, according to Article 14(3) of the Council Regulation laying down the statute for executive agencies2, subject to individual discharge from Parliament. However, their operational appropriations are subject to discharge within the framework of the discharge of the general budget of the European Union. Thus from an operational point of view they function like any other Commission service. Three executive agencies have been established so far. The Commission decision establishing the Intelligent Energy Executive Agency was adopted on 23.12.20033, the Executive Agency for the Public Health programme on 15.12.20044 and the Executive Agency for Education, Audiovisual and Culture on 14.1.20055.

1 Council Decision 2005/681/JHA of 20 September 2005 (OJ L 256, 1.10.2005, p. 63). 2 Council Regulation (EC) N° 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes, OJ L 11, 16.1.2003, p. 1 3 OJ L 5, 9.1.2004, p.5. 4 OJ L 369, 16.12.2004, p.73. 5 OJ L 24, 27.1.2005, p.35.

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Table 3: Executive agencies - discharge procedure currently in force Receive grant

from budget Receive


Intelligent Energy Executive Agency Yes Yes* Executive Agency for Education, Audiovisual and Culture Yes Yes* Executive Agency for the Health and Consumer Programme Yes Yes* * Parliamentary discharge for these agencies is foreseen in their legal bases. So although they were did not receive separate parliamentary discharge during the 2004 exercise because they wee too new to have their own separate accounts, they will receive separate parliamentary discharge in due course. Proposals to create two more executive agencies are pending: the Trans-European Transport Networks Executive Agency and the Executive Agency for the European Research Council. A complete list of all executive agencies established or under consideration can be found in annex 1.

3.c. Other agencies The Galileo Joint Undertaking (GJU) was set up by Council Regulation (EC) No 876/2002 of 21 May 20021. Half of the funding comes from the EC Budget (from the TEN Transport budget), the remainder is provided by the European Space Agency. Despite the grant from the EC Budget, the GJU is not subject to discharge from the European Parliament. The discharge procedure applicable to its budget is described in annex 2. Table 4: Other agencies - discharge procedure currently in force Joint undertakings Receive grant

from budget Receive


Galileo Joint Undertaking Yes No

The 2007 Preliminary Draft Budget contains provision for a Joint Undertaking for ITER (International Thermonuclear Experimental Reactor)2. The Commission is also considering joint undertakings in the field of air traffic control and radioactive waste management. The Commission has recently brought forward a proposal to establish the European Institute of Technology3. Recital 16 to the proposed regulation establishing the European 1 OJ L 138, 28.5.2002, p. 1. 2 COM(2006) 300 , vol 4, Bk 1, p. III/426 3 COM(2006) 604 final of 18.10.2006.

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Institute of Technology states that "The EIT is a body set up by the Communities in the sense of Article 185(1) of Council Regulation (EC, Euratom), No. 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities". The proposed regulation therefore provides for separate parliamentary discharge (article 18.4.). A complete list of all "other" agencies established or under consideration can be found in annex 1.

4. GROWTH OF THE AGENCIES The first agencies were established in 1975. The figure below shows the rapid rate at which the number of agencies has grown since, a rate which shows no sign of slowing. Figure 1: Agencies established or under consideration

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1975 1980 1985 1990 1995 2000 2005

No.

of A

genc

ies

Decentralised agencies Other agencies Total --- Agencies under consideration

The financial and staff implications of the agencies have grown even more rapidly than the number of agencies. Figure 2 shows the total grants paid to the decentralised agencies from the EU budget. In 1995, direct grants totalling 77,9 meuro were paid to the agencies. At the time, 11 decentralised agencies existed, implying an average grant per agency of 7 meuro. Direct grants for decentralised agencies included in the 2006 budget amounted to 610,1 meuro. With 27 decentralised agencies in place by 2006, the average grant per agency had risen to 23 meuro, even taking into account those agencies that do not receive direct grants from the budget.

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Figure 2: Direct grants to decentralised agencies from the EU budget, € million

0

100

200

300

400

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700

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

In 2007, the total grant paid to the decentralised agencies from the EU budget is set to increase by 29,4% compared to 2006. The total grant to executive agencies and other agencies is, however set to fall by 19,5%. Even so, the total grant for all agencies is set to increase significantly more rapidly than the general budget, and the share of the budget accounted for by the agencies is thus set to rise. As seen in the table below, direct grants to all agencies are set to increase by 11,1% in the 2007 budget compared to 2006, while the EU budget as a whole is set to rise by only 3,6%. Details of the grants received from the general budget, by agency, can be found in annexes 3 and 4. Table 5: Direct grants to agencies from the EU budget 2006 2007* 2007/2006 Direct grants from EU Budget meuros % Decentralised agencies** 343 444 29.4 Executive agencies and other agencies 205 165 -19.5 All agencies** 548 609 11.1 EU budget 121.430 125.812 3,6 * Second reading of the Committee on Budgets. Final adoption of the 2007 by the European Parliament is scheduled for 14.12.2006. ** In 2006 the Reconstruction Agency received a grant of 267 meuro but is being phased out and is not therefore set to receive any new grant in 2007. For comparative purposes it has been excluded from the table above. Rapid increases in staffing of the agencies are also evident. In 1995, 11 agencies had a total establishment plan of 417, an average of 38 staff per agency. By 2006, the budget provided for 3197 staff, an average of 139 staff per agency across the 27 decentralised agencies in place.

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Figure 3: Total staff in decentralised agencies

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1500

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3500

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

The financial burden of agency staff has also increased significantly over time. During the 2007 budget exercise, the average cost of an official was calculated as 88.100 euros. Applying this figure to staff numbers for illustrative purposes, it can be seen that the financial burden of the staff in the decentralised agencies has risen from 37 meuro in 1995 to 282 meuro in 2006. It should be noted, however, that the staff numbers of several of the agencies not currently covered by the separate Parliamentary discharge procedure are not known and are not, therefore, included in the total above. Although this does not currently have implications for the general budget, it will do so in the future, as these staff retire and benefit from pensions paid from the EU budget. The future pension burden of agency staff will thus be substantially higher than implied by the staffing numbers as approved in the general budget by the Budgetary Authority.

5. ANALYSIS Decentralisation to agencies of specific tasks can allow more effective delivery of Union policies. Agencies can also help enhance visibility and improve communication through bringing the Union closer to the citizens. A separate parliamentary discharge decision for agencies in turn helps enhance the visibility of the agencies, and it also helps ensure transparency, accountability and control. The first two agencies created - the European Centre for the Development of Vocational Training and the European Foundation for the Improvement of Living and Working Conditions - were subject to separate Parliamentary discharge. However none of the 10 new agencies that sprung up between 1990 and 1999 were initially subject to separate

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discharge from Parliament. Between 2000 and 2002 a further nine new agencies were created, but separate Parliamentary discharge was written into the legal base of only one of them - the Reconstruction Agency. In response to Parliament's increasing concerns, significant improvements to the financial management and control of the agencies were introduced through revisions in the legal framework applicable to the agencies. The new Financial Regulation 1605/2002, which came into effect on 1 January 2003, introduced a consistent approach to the agencies and a significant strengthening of the powers of the budgetary and discharge authorities over them. Of particular note in this regard are a general extension of the separate Parliamentary discharge procedure to all agencies in receipt of a grant from the budget, and extension of the general financial and budgetary rules to the agencies, including incorporation of the establishment plans of the agencies into the annual budget. In this section it will be demonstrated, however, that some inconsistencies remain, both in the legal framework itself, and in its application, and that further reform is needed.

5.a. Legal background: the theory According to the legal background as set out in the EC Treaty, the Financial Regulation and the agencies' financial regulation, the budgets of all agencies should be in the general budget, and thus subject to audit by the European Court of Auditors and discharge by the European Parliament. However article 185 of the Financial Regulation, in contradiction with the Treaty and the fundamental principles underlying the Financial Regulation, restricts Parliamentary discharge to a subset of agencies. All agencies should be in the general budget ... The EC budget is based on the principle of unity, which specifies that the budget must include all the revenue and expenditure considered necessary for the European Community and the European Atomic Energy Community, which comprises: "the revenue and expenditure of the European Community, including administrative expenditure occasioned for the institutions by the provisions of the Treaty on European Union relating to the common foreign and security policy and police and judicial cooperation in criminal matters, and the operating expenditure occasioned by the implementation of those provisions where this is charged to the budget"1. The budgets of all agencies, in all three pillars of European Union activity, should thus be in the general budget. … the budget and establishment plan of each agency should be in the general budget ... According to article 3 of the Financial Regulation, the budget shall be established and implemented in compliance with the principle of universality. The principle is defined in article 17, which states that "all revenue and expenditure shall be entered in full". Thus:

1 EC Treaty, article 4(2)(a).

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- according to article 134 of the Financial Regulation, the accounts shall record "all events and operations which affect the economic and financial situation and assets and liabilities" of the institutions and agencies , - according to article 146 "the discharge decision shall cover the accounts of all the Communities' revenue and expenditure, the resulting balance and the assets and liabilities of the Communities shown in the balance sheet". In line with this, article 95 of the specific financial regulation for the bodies referred to in Article 185 (the agencies' financial regulation), lays down that "the discharge decision shall cover the accounts of all the revenue and expenditure of the Community body...". The principle of universality also implies that the establishment plans of the all agencies should be in the general budget and subject to approval by the Budgetary Authority. This is consistent with article 27 of the Agencies Framework Financial Regulation1 which requires inclusion of the establishment plans in the budget of the agencies covered by Article 185 of the general Financial Regulation ie the agencies in receipt of direct grants from the budget. Ensuring that account is taken in the budget of the direct cost of staff is clear. However, the principle of universality requires that all costs should be taken into account, including subsequent pension costs. Since the staff of agencies not in receipt of direct grants from the budget will also receive pensions from the EU budget in due course, it is clear that the establishment plans of all agencies, irrespective of whether they are in receipt of direct grants from the budget, should be included in the general budget, subject to approval by the Budgetary Authority. … each agency should have its own budget line ... According to the principle of specification as defined in Article 21 of the Financial Regulation: "appropriations shall be earmarked for specific purposes by title and chapter; the chapters shall be further subdivided into articles and items". Article 29 states that "the budget shall be established and implemented and the accounts presented in compliance with the principle of transparency". In order to respect these two principles, each agency should have its budget line(s) in the general budget. … the European Court of Auditors should examine the accounts of all agencies ... According to the EC Treaty, the European Court of Auditors, is required to examine the accounts of "all revenue and expenditure of the Community [...] and of all bodies set up by the Community in so far as the relevant constituent instrument does not preclude such examination"2, in order to "assist the European Parliament and the Council in exercising their powers of control over the budget"3. All agencies should thus send their accounts to the Court of Auditors for examination.

1 Commission Regulation (EC) No 2343/2002 of 23 December 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities, OJ L 357, 31.12.2002, p. 72. 2 EC Treaty, article 248(1). 3 EC Treaty, article 248(4).

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… the accounts of all agencies and the reports of the Court of Auditors thereon should be sent to the discharge authority … Article 146 of the Financial Regulation requires the discharge decision to "cover the accounts of all the Communities' revenue and expenditure, the resulting balance and the assets and liabilities of the Communities shown in the balance sheet". To this end the European Parliament is required to examine the accounts and the reports of the Court of Auditors thereon. … yet article 185 restricts Parliamentary discharge to a subset of agencies. Article 185 requires that the agency discharge decision be given separately, to the director of the agency, but only, however, to the directors of agencies "which actually receive grants charged to the budget". Firstly there is the issue of what constitutes a "grant charged to the budget". Many agencies are in direct receipt of grants from the EU budget, others benefit indirectly, for example through use of the staff of the institutions, either operationally and/or as board members. Although the salary costs of the (operational) staff may be covered by revenue sources other than the EU budget (eg fees for services rendered or contributions from Member States) other costs, such as pensions of retired agency staff, still fall in any case to the budget. In either case, it is very difficult to understand the logic of this restriction. As shown above, according to the rest of the Financial Regulation, and in conformity with the underlying principles of unity, universality, specification and transparency, a discharge decision should be given to the directors of all agencies.

5.b. Legal background: the practice An examination of the implementation of the various legal texts described in the previous section reveals a number of inconsistencies. Not all agencies are in the budget ... The general budget should contain budget lines and establishment plans for each agency, subject to approval by the Budgetary Authority. The budget lines contain the grants to the agencies from the general budget, which may take the form of a token entry for those agencies not in receipt of a direct grant from the general budget. Details of the agencies' own budgets (income - direct grant from the EU budget and other income - and expenditure) should be included in the remarks to the relevant budget line. However, as can be seen from the table below, although the general budget contains much of the information required, for some agencies information is missing or incomplete.

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Table 6: Agencies' budget lines, budgets and establishment plans

Agency has

separate line(s) in 2006 EC budget

Agency's own

budget in remarks to 2006

EC budget

Agency's establishment plan in 2006 EC budget

European Centre for the Development of Vocational Training Yes Yes Yes European Foundation for the Improvement of Living and Working Conditions Yes Yes Yes European Environment Agency Yes Yes Yes European Training Foundation Yes Yes Yes European Monitoring Centre for Drugs and Drug Addiction Yes Yes Yes European Medicines Agency Yes Yes Yes Office for Harmonisation in the Internal Market (Trade Marks and Designs) Yes Yes Yes European Agency for Health and Safety at Work Yes Yes Yes Community Plant Variety Office No Yes Yes Translation Centre for the Bodies of the European Union No No Yes European Monitoring Centre on Racism and Xenophobia Yes Yes Yes European Agency for Reconstruction No Yes Yes European Food Safety Authority Yes Yes Yes European Maritime Safety Agency Yes Yes Yes European Aviation Safety Agency Yes Yes Yes European Network and Information Security Agency Yes Yes Yes European Centre for Disease Prevention and Control Yes Yes Yes European Railway Agency Yes Yes Yes European Global Navigation Satellite System Supervisory Authority Yes Yes Yes European Agency for the Management of Operational Coordination at the External Borders of the Member States of the European Union

Yes Yes Yes

Community Fisheries Control Agency Yes Yes Yes European Institute for Security Studies No No No European Union Satellite Centre No No No European Defence Agency No No No European Police Office No No No European Police College Yes Yes Yes Eurojust Yes Yes Yes Intelligent Energy Executive Agency Yes No Yes Executive Agency for Education, Audiovisual and Culture Yes No Yes Executive Agency for the Health and Consumer Programme Yes No Yes Galileo Joint Undertaking No No No OHIM has a dedicated budget line, albeit with a token entry since it does not receive a grant from the budget, but the Plant Varieties Office, which does not receive a grant either, does not and is rolled in with the 'food safety, animal health, animal welfare and plant health other measures' budget line. The Reconstruction Agency does receive a grant from the budget but does not have its own budget line: the subsidy to this agency is located within the assistance to the Western Balkans programme budget line. The establishment plans of all agencies in direct receipt of grants from the budget are included in the budget. The establishment plans of OHIM and the Plant Variety Office are also included.

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Neither the budgets, nor the establishment plans of the Galileo Joint Undertaking, Europol and the three agencies carrying out activities under the common foreign and security policy are included in the budget. The Translation Centre is in a category of its own: the 2006 budget did not contain either a budget line for this agency or details of its budget but did contain its establishment plan. And finally it should be noted that, while establishment plans of the three executive agencies currently in existence and the grants from the EC budget, written into dedicated budget lines, are included in the EC budget, the budgets of the executive agencies in question were not shown in the EC budget. Regarding proposed agencies, indicative grants for the proposed Chemicals Agency, Institute for Gender Equality and the Fundamental Rights Agency were included in the 2006 budget but their establishment plans were not. In the case of the TENs-transport executive agency, however, both an indicative budget and an establishment plan were included in the 2006 budget even though the proposal to create this executive agency has not yet been approved. Clearly the lack of a separate budget line and/or establishment plan has negative consequences in terms of transparency. And it also reduces the Budgetary Authority's powers of control. The lack of establishment plans also reduces the Budgetary Authority's ability to carry out the management responsibilities regarding agency staff conferred on it with the adoption of the new Financial Regulation. … the European Court of Auditors does not audit the accounts of all the agencies, and not all agencies forward their accounts to the discharge authority ... The European Court of Auditors is required by Treaty to audit the accounts of the agencies "in so far as the relevant constituent instrument does not preclude such examination"1. No constituent instrument of any agency precludes examination of that agency's accounts by the Court of Auditors. However, the budgets and accounts of four agencies are not subject to audit by the European Court of Auditors: Europol and the three agencies carrying out tasks within the field of Common Foreign and Security Policy. It should also be noted that there are examples of agencies which, even though subject to audit from the European Court of Auditors, do not send their accounts to the discharge authority (Plant Variety Office and the Galileo Joint Undertaking) and are not subject to separate Parliamentary discharge. On the other hand, there are examples of agencies which are not subject to Parliamentary discharge at all even though their accounts are audited by the Court of Auditors and sent to the European Parliament (OHIM). In either case, given that the role of the Court of Auditors, according to the Treaty, is to assist the discharge authority in exercising its powers of control over the budget, it is difficult to understand the involvement of the Court of Auditors without the involvement of the discharge authority. And it is difficult to understand why agencies should send their

1 TEC Article 248(1).

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accounts to the European Parliament if the European Parliament is not able to control those accounts. Table 7: Agencies' accounts

Accounts audited by European Court of Auditors

Accounts forwarded to the European

Parliament

European Centre for the Development of Vocational Training Yes Yes European Foundation for the Improvement of Living and Working Conditions Yes Yes European Environment Agency Yes Yes European Training Foundation Yes Yes European Monitoring Centre for Drugs and Drug Addiction Yes Yes European Medicines Agency Yes Yes Office for Harmonisation in the Internal Market (Trade Marks and Designs) Yes Yes European Agency for Health and Safety at Work Yes Yes Community Plant Variety Office Yes No Translation Centre for the Bodies of the European Union Yes Yes European Monitoring Centre on Racism and Xenophobia Yes Yes European Agency for Reconstruction Yes Yes European Food Safety Authority Yes Yes European Maritime Safety Agency Yes Yes European Aviation Safety Agency Yes Yes European Network and Information Security Agency Yes Yes European Centre for Disease Prevention and Control Yes Yes European Railway Agency Yes Yes European Global Navigation Satellite System Supervisory Authority Yes Yes European Agency for the Management of Operational Coordination at the External Borders of the Member States of the European Union

Yes Yes

Community Fisheries Control Agency Yes Yes European Institute for Security Studies No No European Union Satellite Centre No No European Defence Agency No No European Police Office No No European Police College Yes Yes Eurojust Yes Yes Intelligent Energy Executive Agency Yes Yes Executive Agency for Education, Audiovisual and Culture Yes Yes Executive Agency for the Health and Consumer Programme Yes Yes Galileo Joint Undertaking Yes No … there are inconsistencies in the implementation of Article 185. Article 185 of the Financial Regulation limits Parliament's discharge powers to agencies which fulfil the following three cumulative conditions: 1) "bodies set up by the Communities" 2) "having legal personality" 3) "which actually receive grants charged to the budget". If conditions 1, 2 and 3 of article 185 of the Financial Regulation are all met, Parliamentary discharge should apply automatically. However, according to current practice this is not the case:

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a) separate Parliamentary discharge can also apply when one or more of the conditions are not met eg Eurojust is not a Community body but a Union body, so condition 1 is not met, yet it is subject to separate Parliamentary discharge under the article 185 procedure. b) separate Parliamentary discharge does not always apply when all the conditions are met eg the Joint Undertakings are Community bodies having legal personality which actually receive grants charged to the budget, so conditions 1, 2 and 3 are met, but the Galileo Joint Undertaking is not subject to separate Parliamentary discharge under the article 185 procedure.

6. CONCLUSIONS Decentralisation can allow more effective delivery of EU policies through specialised bodies out in the Member States, bringing the Union closer to the citizens. The European Parliament has sought to ensure that these benefits are not outweighed by reduced transparency, accountability and control. Concerns in this regard have grown markedly in recent years with the rapid rise in the number of agencies, and their financial implications. The Financial Regulation which came into effect on 1 January 2003 significantly increased the powers of the budgetary and discharge authorities over the agencies and enhanced transparency, accountability and control. However, more needs to be done. The Financial Regulation is based on the principles of unity, universality, specification and transparency, inter alia. These principles require all agencies to be in the general budget. The European Parliament is required by Treaty to give discharge regarding the implementation of the general budget. Thus all agencies should be subject to Parliamentary discharge. Article 185 of the Financial Regulation, which restricts Parliament's discharge powers to a subset of agencies, and specifically those "which actually receive grants charged to the budget", is inconsistent with the rest of the Financial Regulation and its underlying principles. Inconsistencies also exist in the practical implementation of the rules underlying the agencies' discharge, at all stages of the process. There are inconsistencies in the inclusion of the agencies in the general budget, in the transmission of the accounts to the discharge authority, in the involvement of the Court of Auditors in the audit of the agencies' accounts and budgets and in the application of article 185 of the Financial Regulation. These various inconsistencies are summarised in figure 4 below.

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Figure 4: Agencies discharge - theory and practice

8 agencies do not have own budget line: CPVO, CDT, EAR, EISS, EUSC, EDA, Europol, GJU. all agencies should be in the budget BUT 9 agencies' budgets not included in budget: CDT, EISS, EUSC, EDA, Europol, IEEA, EAEAC, EAHCP, GJU

5 agencies' establishment plans not included in budget: EISS, EUSC, EDA, Europol, GJU.

all agencies should send accounts to 4 agencies not audited by Court of Auditors: EISS, EUSC, EDA, Europol. Court of Auditors and discharge BUT 6 agencies do not send accounts to discharge authority: CPVO, EISS, EUSC, EDA, Europol, GJU. authority all agencies should be subject to BUT 7 agencies not subject to separate EP discharge: OHIM, CPVO, EISS, EUSC, EDA, Europol, GJU. separate EP discharge

article 185 separate EP discharge restricted to "bodies set up by Eurojust not a Community body but subject to the Communities and having legal personality which BUT separate EP discharge.

actually receive grants charged to the budget" GJU respects article 185 but not subject to separate EP discharge.

All agencies act on behalf of the European Union and in the Union's name. They should thus all be accountable for their actions and for the way they raise and spend money.

7. NEXT STEPS The general budget should be amended to include full information for each agency: the general budget should include separate budget lines for each agency, details of each agency's budget and each agency’s establishment plan. The budgets and accounts of all agencies can then be audited by the European Court of Auditors and subject to discharge from the European Parliament. This approach should apply to all agencies, beyond the traditional agencies currently receiving at least some direct subsidy from the general budget (and in due course the executive agencies, as already foreseen), to also include the self-financed pillar I agencies, the agencies financed inter-governmentally in pillars II and III and other agencies such as joint undertakings and the European Institute of Technology.

BUDGET

ACCOUNTS

DISCHARGE

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The European Parliament has expressed its will to improve accountability of the agencies in the 2004 agencies discharge reports1, which call for extension of Parliamentary discharge to all agencies, irrespective of whether they are in receipt of direct grants from the Community budget, and for the basic texts of those agencies that are currently subject to discharge from another discharge authority to be revised accordingly. Similarly and consistently, in its opinion on the revision of the Financial Regulation, Parliament called for an amendment to article 185(1) of the Financial Regulation2 removing the restriction limiting Parliamentary discharge to those agencies "which actually receive grants charged to the budget" and extending Parliamentary discharge to all the bodies set up by the Union. This amendment did not, however, form part of the compromise reached on the current revision to the financial regulation. The European Parliament's Rules of Procedure also need revision. Rule 71 on the agencies' discharge procedure currently limits Parliaments powers to agencies "which carry out Community tasks". However, Parliament's discharge powers should be extended to all agencies which carry out tasks on behalf of the European Union. The Commission should also revise the draft Interinstitutional Agreement (IIA) on the operating framework of the European regulatory agencies3. The draft IIA, which only covers agencies created by the legislator (ie it does not cover the executive agencies, set up by the Commission, which are governed by a separate statute) currently specifies that only agencies in receipt of a subsidy from the EC budget would be subject to Parliamentary discharge; self-financed agencies would be subject to discharge from the agency's administrative board. This proposal mirrors the approach of the current text of article 185 of the Financial Regulation, and should thus be modified in line with modifications to article 185 of the Financial Regulation. Pending introduction of the necessary changes to the legislation, the European Parliament could set up a "shadow" agencies discharge procedure for the agencies not currently covered by separate Parliamentary discharge exercise. In order to allow the European Parliament to draw up discharge reports on them, these agencies could be invited to provide details of their budgets and establishment plans and be liable to attend the annual discharge hearing of the directors of agencies.

1 See, for example, P6_TA-PROV(2006)0167 of 27.4.2006. 2 P6_TA-PROV(2006)0085 of 15.3.2006. 3 COM(2005)59 final, 25.2.2005.

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ANNEX 1

AGENCIES ESTABLISHED OR UNDER CONSIDERATION 1. Decentralised agencies 1.a. Community agencies:

Founding act

Location

European Centre for the Development of Vocational Training CEDEFOP 10.2.1975 Thessaloniki European Foundation for the Improvement of Living and Working Conditions

EUROFOUND 26.5.1975 Dublin

European Environment Agency EEA 7.5.1990 Copenhagen European Training Foundation ETF 7.5.1990 Torino European Monitoring Centre for Drugs and Drug Addiction EMCDDA 8.2.1993 Lisbon European Medicines Agency EMEA 22.7.1993 London Office for Harmonisation in the Internal Market (Trade Marks and Designs)

OHIM 20.12.1993 Alicante

European Agency for Health and Safety at Work EU-OSHA 18.7.1994 Bilbao Community Plant Variety Office CPVO 27.7.1994 Angers Translation Centre for the Bodies of the European Union CDT 28.11.1994 Luxembourg European Monitoring Centre on Racism and Xenophobia EUMC 2.6.1997 Vienna European Agency for Reconstruction EAR 5.12.2000 Thessaloniki European Food Safety Authority EFSA 28.1.2002 Parma European Maritime Safety Agency EMSA 26.6.2002 Lisbon European Aviation Safety Agency EASA 15.7.2002 Cologne European Network and Information Security Agency ENISA 10.3.2004 Heraklion European Centre for Disease Prevention and Control ECDPC 21.4.2004 Solna European Railway Agency ERA 29.4.2004 Valenciennes European Global Navigation Satellite System Supervisory Authority

EGNSSSA 12.7.2004 not decided

European Agency for the Management of Operational Coordination at the External Borders of the Member States of the European Union

FRONTEX 26.10.2004 Warsaw

Community Fisheries Control Agency CFCA 26.4.2005 Vigo Institute for Gender Equality under

negotiation Vilnius

European Chemicals Agency under negotiation

Helsinki

Fundamental Rights Agency1 under negotiation

Vienna

1 If established, the Fundamental Rights Agency will replace the European Monitoring Centre on Racism and Xenophobia.

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1.b. Union agencies:

Founding act

Location

European Police Office Europol 18.7.1995 The Hague European Police College EPC 22.12.2000 Bramshill European Institute for Security Studies EISS 20.7.2001 Paris European Union Satellite Centre EUSC 20.7.2001 Torrejón de

Ardoz Eurojust Eurojust 28.2.2002 The Hague European Defence Agency EDA 12.7.2004 Brussels 2. Executive agencies

Founding act Location Intelligent Energy Executive Agency IEEA 23.12.2003 Brussels Executive Agency for Education, Audiovisual and Culture EAEAC 15.12.2004 Brussels Executive Agency for the Health and Consumer Programme EAHCP 14.1.2005 Luxembourg Trans-European Transport Networks Executive Agency under

consideration not decided

Executive Agency for the European Research Council under consideration

not decided

3. Other agencies Founding act Location Galileo Joint Undertaking GJU 21.5.2002 Brussels Joint Undertaking for ITER under

consideration not decided

Joint undertaking in the field of air traffic control under consideration

not decided

Joint undertaking in the field of radioactive waste management

under consideration

not decided

European Institute of Technology under consideration

not decided

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ANNEX 2

ACCOUNTABILITY IN AGENCIES NOT SUBJECT TO PARLIAMENTARY DISCHARGE Decentralised agencies The 1993 Community trademark regulation1 established the Office for Harmonisation in the Internal Market (Trade Marks and Designs) - OHIM, to be represented by a President, and set up an Administrative Board and a Budget Committee attached to the Office. The President of the Office is appointed by Council from a list of candidates prepared by the Administrative Board. The Administrative Board is composed of one representative of each Member State and one representative of the Commission and their alternates. Power to dismiss the President lies with Council, acting on a proposal from the Administrative Board. The President is required to send the annual accounts to the European Parliament. However no Parliament involvement in the discharge procedure is foreseen. The Office's Budget Committee gives discharge to the President of the Office in respect of implementation of the budget. The Budget Committee is composed of one representative of each Member State and one representative of the Commission and their alternates. The 1994 Community plant variety rights regulation2 set up the Community Plant Variety Office (CPVO), to be represented by a President, and set up an Administrative Council attached to the Office. The President of the Office is appointed by Council from a list of candidates proposed by the Commission after obtaining the opinion of the Administrative Council. The Administrative Council is composed of one representative of each Member State and one representative of the Commission and their alternates. Power to dismiss the President lies with Council, acting on a proposal from the Commission after obtaining the opinion of the Administrative Council. The Office is not required to send its accounts to Parliament and no Parliament involvement in the discharge procedure is foreseen. The Office's Administrative Council gives discharge to the President of the Office in respect of implementation of the budget. Although currently self-financed, the legal bases of both OHIM and the CPVO allow for a subsidy from the general budget of the European Communities. The European Union Institute for Security Studies was established by Council Joint Action 2001/554/CFSP of 20 July 20013. The income of the Institute consists of contributions from the Member States. Additional contributions may be accepted from other sources for specific activities. The Board of the Institute adopts the budget of the Institute and gives discharge to the Director in respect of implementation of the budget. The Board is composed of one representative appointed by each Member State and one,

1 Council Regulation (EC) No. 40/94 of 20 December 1993 on the Community Trademark, OJ L 11, 14.1.1994. 2 Council Regulation (EC) No. 2100/94 of 27 July 1994 on Community plant variety rights, OJ L 227, 1.9.1994. 3 OJ L 200, 25.7.2001, p. 1.

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without voting rights, appointed by the Commission. The Board appoints the Director from among candidates submitted by the Member States. The European Union Satellite Centre was established by Council Joint Action 2001/555/CFSP of 20 July 20011. The income of the Centre consists of contributions from Member States except Denmark. The Board of the Centre adopts the budget of the Centre and gives discharge to the Director in respect of implementation of the budget. The Board is composed of one representative appointed by each Member State and one, without voting rights, appointed by the Commission. The Board appoints the Director from among candidates submitted by the Member States. The European Defence Agency was set up by Council Joint Action 2004/551/CFSP of 12 July 20042. The activities of the Agency are funded through miscellaneous revenue and contributions payable by the Member States. The Agency's Steering Board adopts the general budget and approves the annual accounts and balance sheet. The Steering Board is composed of one representative of each participating Member State and, without voting rights, a representative of the Commission. The Agency may also manage ad hoc projects or programmes. Contributions from the general budget of the EU may be made to the ad hoc budgets established for ad hoc projects or programmes. Arrangements to cover a contribution from the general budget of the EU are established on a case-by-case basis, by mutual agreement, between the Agency and the Commission or between the contributing Member States and the Commission. The European Police Office (Europol) was established by Council Act of 26 July 19953. It is financed by Member State's contributions and by other incidental income. The Council adopts the budget and grants discharge to the Director of Europol in respect of the implementation of the budget. The Director is appointed by Council after obtaining the opinion of the Management Board. The Management Board is composed of one representative of each Member State. Other agencies Article 4 of Council Regulation 876/2002 setting up the Galileo Joint Undertaking4 requires the Commission to present an annual report to Council on the progress of the Galileo programme, including the financial aspects. Article 15 of the Statutes of the Galileo Joint Undertaking (annexed to the regulation) requires the Director of the Galileo Joint Undertaking to present the annual accounts and balance sheets together with the annual report of the Court of Auditors to the Administrative Board for approval.

1 OJ L 200, 25.7.2001, p. 5. 2 OJ L 245, 17.7.2004, p. 17. 3 OJ C 316, 27.11.1995, p. 1. 4 OJ L 138, 28.5.2002, p.1.

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ANNEX 3

DECENTRALISED AGENCIES: GRANTS FROM THE EU BUDGET

Budget Line and Title Commitments Payments Commitments Payments Commitments Payments Commitments Payments

11.300.000 11.300.000 11.526.000 11.526.000

1.274.000 1.274.00018.700.000 18.700.000 19.074.000 19.074.000

3.126.000 3.126.00002 03 02 03 Special contribution for orphan medicinal products 4.000.000 4.000.000 6.000.000 6.000.000 2.000.000 2.000.000 50,00% 50,00%

p.m. p.m. p.m. p.m.

11.682.000 11.682.000p.m. p.m. p.m. p.m.

3.612.000 3.612.0000 0 p.m. p.m.

2.310.000 2.310.0000 0 p.m. p.m.

2.190.000 2.190.00011.900.000 11.900.000 12.138.000 12.138.000

12.000 12.0007.100.000 7.100.000 7.242.000 7.242.000

208.000 208.0005.900.000 5.900.000 6.018.000 6.018.000

282.000 282.0007.300.000 7.300.000 7.446.000 7.446.000

254.000 254.00012.280.000 12.280.000 12.525.600 12.525.600

1.674.400 1.674.4009.720.000 9.720.000 9.914.400 9.914.400

415.600 415.60016.300.000 16.300.000 16.626.000 16.626.000

1.874.000 1.874.0004.530.000 4.530.000 4.360.000 4.360.000

240.000 240.000

Difference(Euros)

Difference(Percent)2006 Budget

2007 Budget(CoBu 2nd Reading)

02 03 02 01 European Medicines Agency — Subsidy under Titles 1 and 2 13,27%

250.000

350.000

400.000

400.000

1.920.000

610.000

13,27%1.500.000 1.500.000

2.190.000

3.500.000

11.682.000

3.612.000

2.310.000

2.200.000

70.000

3.500.000

11.682.000

3.612.000

2.310.000

2.190.000

250.000

350.000

400.000

400.000

1.920.000

610.000

2.200.000

70.000

02 03 02 02

02 03 03 01

02 03 03 02

04 04 02 01

04 04 02 02

04 04 03 01

04 04 03 02

04 04 04 02

04 04 04 03

06 02 01 01

06 02 01 02

06 02 02 01

06 02 02 02

18,72% 18,72%

2,10% 2,10%

4,93% 4,93%

6,78% 6,78%

5,48% 5,48%

15,64% 15,64%

6,28% 6,28%

13,50% 13,50%

1,55% 1,55%

European Medicines Agency — Subsidy under Title 3

Chemicals legislation and Chemicals Agency - Subsidy under Titles 1 and 2

Chemicals legislation and Chemicals Agency - Subsidy under Title 3

Gender Institute — Subsidy under Titles 1 and 2

Gender Institute — Subsidy under Title 3

European Foundation for the Improvement of Living and Working Conditions — Subsidy under Titles 1 and 2

European Foundation for the Improvement of Living and Working Conditions — Subsidy under Title 3

European Agency for Safety and Health at Work — Subsidy under Titles 1 and 2

European Agency for Safety and Health at Work — Subsidy under Title 3

European Aviation Safety Agency — Subsidy under Titles 1 and 2

European Aviation Safety Agency — Subsidy under Title 3

European Maritime Safety Agency — Subsidy under Titles 1 and 2

European Maritime Safety Agency — Subsidy under Title 3

1: Sustainable Growth

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Difference(Euros)



06 02 02 03 European Maritime Safety Agency – Anti-pollution measures 23.800.000 23.800.000 25.000.000 25.000.000 1.200.000 1.200.000 5,04% 5,04%

10.998.000 10.998.000 11.276.100 11.276.100

57.000 57.000 1.123.900 1.123.9003.400.000 3.400.000 3.468.000 3.468.000

777.000 777.0002.231.400 2.231.400 2.550.000 2.550.000

268.600 268.600 4.250.000 4.250.0002.500.000 2.500.000 2.550.000 2.550.000

75.000 75.0004.950.000 4.950.000 5.049.000 5.049.000

151.000 151.0001.850.000 1.850.000 1.887.000 1.887.000

913.000 913.000

12 03 01 01Office for Harmonization in the Internal Market — Subsidy under Titles 1 and 2

p.m. p.m. p.m. p.m.

12 03 01 02Office for Harmonization in the Internal Market — Subsidy under Title 3

p.m. p.m. p.m. p.m.

10.962.000 10.962.000 11.181.240 11.181.240

598.760 598.7605.438.000 5.438.000 4.851.000 4.851.000

99.000 99.000Total Heading 1 175.485.000 175.485.000 217.824.000 217.824.000 42.339.000 42.339.000 24,13% 24,13%

16.650.000 16.650.000 16.983.000 16.983.000

767.000 767.00011.000.000 11.360.000 10.706.000 10.706.000

494.000 494.0003.240.000 3.240.000 3.876.000 3.876.000

560.000 560.000 24.000 24.0001.100.000 1.100.000 990.000 990.000

110.000 110.00017 04 05 Plant Variety Office p.m. p.m. p.m. p.m.

Total Heading 2 32.550.000 32.910.000 33.950.000 33.950.000 1.400.000 1.040.000 4,30% 3,16%

1.345.000

845.000

4.300.000

125.000

250.000

950.000

818.000

-488.000

4.300.000

125.000

06 02 08 01

06 02 08 02

06 02 09 01

06 02 09 02

09 02 03 01

09 02 03 02

15 02 25 01

15 02 25 02

12,75% 12,75%

250.000

950.000

818.000

-488.000

1.345.000

845.000

51,35% 51,35%

24,85% 24,85%

204,74% 204,74%

5,00% 5,00%

5,05% 5,05%

7,46% 7,46%

-8,97% -8,97%

1.100.000 1.100.000

200.000 -160.000

100.000 100.000

0 0

6,61% 6,61%

1,82% -1,41%

20,37% 20,37%

0,00% 0,00%

07 03 09 01

07 03 09 02

11 08 05 01

11 08 05 02

European Railway Agency for Safety and Interoperability – Subsidy under Titles 1 and 2

European Railway Agency for Safety and Interoperability – Subsidy under Title 3

Galileo Supervisory Authority — Subsidy under Titles 1 and 2

Galileo Supervisory Authority — Subsidy under Title 3

European Networks and Information Security Agency — Subsidy under Titles 1 & 2

European Networks and Information Security Agency — Subsidy under Title 3

European Centre for the Development of Vocational Training — Subsidy under Titles 1 & 2

European Centre for the Development of Vocational Training — Subsidy under Title 3

Subsidy for the European Environment Agency — Subsidy under Titles 1 and 2

Subsidy for the European Environment Agency — Subsidy under Title 3

Community Fisheries Control Agency (CFCA) — Subsidy under Titles 1 & 2

Community Fisheries Control Agency (CFCA) — Subsidy under Title 3

2: Preservation and Management of Natural Resources

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Difference(Euros)



2.314.000 2.314.000 9.900.000 9.900.000

3.500.000 3.500.000

9.440.000 9.440.000 11.300.000 11.300.000

9.280.000 9.280.0004.500.000 4.500.000 4.590.000 4.590.000

207.000 207.0004.300.000 4.300.000 4.386.000 4.386.000

1.978.000 1.978.000p.m. p.m.

739.000 739.000p.m. p.m.

3.880.200 3.880.2001.940.000 1.940.000 2.244.000 2.244.000

260.000 260.000 881.000 881.0002.300.000 2.300.000 2.346.000 2.346.000

1.968.000 1.968.00011.716.000 11.716.000 11.980.320 11.980.320

2.011.680 2.011.6802.984.000 2.984.000 3.043.680 3.043.680

1.408.320 1.408.3207.903.000 7.903.000 8.061.060 8.061.060

869.940 869.9404.197.000 4.197.000 3.790.000 3.790.000

279.000 279.000Total Heading 3,1 51.854.000 51.854.000 88.643.200 88.643.200 36.789.200 36.789.200 70,95% 70,95%

European Union Agency for Fundamental Rights — Subsidy under Titles 1 and 2

European Union Agency for Fundamental Rights — Subsidy under Title 3

11.086.000 11.086.000

11.140.000 11.140.000

European Agency for the Management of Operational Cooperation at the External Borders — Subsidy under Titles 1 and 2

European Agency for the Management of Operational Cooperation at the External Borders — Subsidy under Title 3

297.000 297.000

2.064.000 2.064.000

739.000 739.000

3.880.200 3.880.200

925.000 925.000

2.014.000 2.014.000

2.276.000 2.276.000

1.468.000 1.468.000

1.028.000 1.028.000

-128.000 -128.000

479,08% 479,08%

118,01% 118,01%

6,60% 6,60%

48,00% 48,00%

61,08% 61,08%

87,57% 87,57%

19,43% 19,43%

49,20% 49,20%

13,01% 13,01%

-3,05% -3,05%

18 02 03 01

18 02 03 02

18 04 05 01

18 04 05 02

18 04 05 03

18 04 05 04

18 05 05 01

18 05 05 02

18 06 04 01

18 06 04 02

18 07 01 01

18 07 01 02

European Monitoring Centre for Drugs and Drug Addiction — Subsidy under Titles 1 and 2

European Monitoring Centre for Drugs and Drug Addiction — Subsidy under Title 3

European Police College — Subsidy under Titles 1 and 2

European Police College — Subsidy under Title 3

Eurojust — Subsidy under Titles 1 and 2

3: Citizenship, Freedom, Security and Justice3.1: Freedom, security and justice

Eurojust — Subsidy under Title 3

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Difference(Euros)



7.020.000 7.020.000 11.421.000 11.421.000

1.144.000 1.144.0009.780.000 9.780.000 12.649.000 12.649.000

1.286.000 1.286.00031.982.000 31.982.000 32.621.640 32.621.640

3.890.360 3.890.36014.618.000 14.618.000 14.910.360 14.910.360

5.577.640 5.577.640Total Heading 3,2 63.400.000 63.400.000 83.500.000 83.500.000 20.100.000 20.100.000 31,70% 31,70%

14.475.000 14.475.000 14.764.500 14.864.000

99.500

4.975.000 4.975.000 4.352.400 4.836.000

483.600267.312.000 270.575.000 p.m. 215.489.000

48.200.000Total Heading 4 286.762.000 290.025.000 19.700.000 283.389.000 -267.062.000 -6.636.000 -93,13% -2,29%

31 01 07 02 Translation Centre for the bodies of the European Union p.m. p.m. p.m. p.m. 0 0

Total Decentralised Agencies 610.051.000 613.674.000 443.617.200 707.306.200 -166.433.800 93.632.200 -27,28% 15,26%

* The European Agency for Reconstruction is being phased out: as from 2007, aid to the Western Balkans will be managed by DG Enlargement and delivered through the new single Instrument for Pre-Accession.

17 03 03 01

17 03 03 02

17 04 08 01

17 04 08 02

15 02 27 01

15 02 27 02

22 02 05 02

5.545.000

4.530.000

389.000

European Centre for Disease Prevention and Control — Subsidy under Title 3

European Food Safety Authority — Subsidy under Titles 1 and 2

European Food Safety Authority — Subsidy under Title 3

5.545.000 78,99% 78,99%

4.155.000 4.155.000 42,48% 42,48%

4.530.000 14,16% 14,16%

5.870.000 5.870.000 40,16% 40,16%

-139.000 -139.000 -2,79% -2,79%

-6.886.000 -2,54%

389.000 2,69% 2,69%

European Centre for Disease Prevention and Control — Subsidy under Titles 1 and 2

European Training Foundation — Subsidy under Titles 1 & 2

European Training Foundation — Subsidy under Title 3

Completion of CARDS assistance — appropriations specifically for the European Agency for Reconstruction *

3.2: Citizenship

4: The EU as a Global Partner

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ANNEX 4

OTHER AGENCIES: GRANTS FROM THE EU BUDGET

Budget Lineand Title Commitments Payments Commitments Payments Commitments Payments Commitments Payments

1: Sustainable Growth06 01 04 30 Intelligent energy — Executive agency 5.064.000 5.064.000 5.277.000 5.277.000 213.000 213.000 4,21% 4,21%

06 01 04 31 Trans-european transport networks — Executive agency 6.715.000 6.715.000 8.617.000 8.617.000 1.902.000 1.902.000 28,32% 28,32%

06 03 01

Completion of Financial Support for projects of common interest in the trans-European transport network — appropriations specifically for the Galileo Joint Undertaking *

154.000.000 77.000.000 p.m. 0 0 -77.000.000 -100,00% -100,00%

08 01 04 30 Executive agency for the European Research Council 0 0 p.m. p.m. 0 0

08 01 04 40Joint undertaking ITER — Expenditure on administrative management

0 0 15.300.000 15.300.000 15.300.000 15.300.000

08 19 02 Euratom — Joint Undertaking ITER 0 0 92.800.000 p.m. 92.800.000 0

15 01 04 30Executive Agency for Education, Audiovisual and Culture — Subsidy for programmes of Heading 1a

17.880.000 17.880.000 17.925.000 17.925.000 45.000 45.000 0,25% 0,25%

Total Heading 1 183.659.000 106.659.000 139.919.000 47.119.000 -43.740.000 -59.540.000 -23,82% -55,82%

3: Citizenship, Freedom, Security and Justice

09 01 04 30Executive Agency for Education, Audiovisual and Culture — Subsidy for programmes of Heading 3

7.250.000 7.250.000 9.073.000 9.073.000 1.823.000 1.823.000 25,14% 25,14%

15 01 04 31Executive Agency for Education, Audiovisual and Culture — Subsidy for programmes of Heading 3b

8.200.000 8.200.000 10.126.000 10.126.000 1.926.000 1.926.000 23,49% 23,49%

17 01 04 30Executive Agency for the Health and Consumer Programme

5.800.000 5.800.000 5.800.000 5.800.000 0 0 0,00% 0,00%

Total Heading 3 21.250.000 21.250.000 24.999.000 24.999.000 3.749.000 3.749.000 17,64% 17,64%

2006 Budget2007 Budget

(CoBu 2nd Reading)Difference(Euros)

Difference(Percent)

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Difference(Euros)



4: The EU as a Global Partner15 01 04 32

Executive Agency for Education, Audiovisual and Culture — Subsidy for programmes of Heading 4

0 0 400.000 400.000 400.000 400.000

19 01 04 30Executive Agency for Education, Audiovisual and Culture — Subsidy for External Relations programmes

184.200 184.200 240.000 240.000 55.800 55.800 30,29% 30,29%

Total Heading 4 184.200 184.200 640.000 640.000 455.800 455.800 247,45% 247,45%

Total Budget for Other Agencies 204.909.000 127.909.000 164.918.000 72.118.000 -39.991.000 -55.791.000 -19,52% -43,62%

* The activities of the Galileo Joint Undertaking, which will be wound up on 31 December 2006, will be taken over during 2006 by the Galileo Supervisory Authority (budget line 06 02 09).From 2007 onwards, the financing of the Galileo programme will be provided through the new Galileo Programme budget line (06 02 10).

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