Response to consultation on draft Guidelines on the delineation and reporting of available financial means of DGS
Go back
However, we could also agree with the alternative approach, since it seems:
- less complex - at any time, DGSs allocate total recoveries received from inception of the disbursement event to QAFM and other AFM according to their share of the financing mix in the initial disbursement event (the rule for inflows).
- more predictable - in the example presented, the total contributions to be levied over the six year period to meet the target level would be identical.
Yet, when the initial intervention is at least partially financed by other AFM (such as in the provided example) the full attribution of recoveries to QAFM is not justified and leads to the undesirable situation (as per point 26 of the draft Guidelines) in which QAFM would be inflated with funds stemming from borrowed funds that have to be repaid.
Question 1: Do you agree with the proposals for the criteria that QAFM should fulfil, i.e. on the exclusion of borrowed resources, the exclusion of contributions from QAFM that contain an obligation to be repaid upon receiving recoveries and keeping track of the origin of funds, as outlined in section 4.1 and 4.4 of the guidelines?
Yes, we agree, with both (i) the criteria to be met for qualifying as QAFM and (ii) the obligations related to keeping track of the funds origin. In Romania contributions (extraordinary or not) may not be subject to an obligation of the DGS to repay them upon receiving recoveries (once they are collected, they may not be repaid to members, irrespective of the case – e.g. the target level is exceeded).Question 2: Do you agree with the proposed approach to allocate recoveries to QAFM and other AFM, as outlined in section 4.2 of the guidelines?
Yes, we agree with the proposed approach.However, we could also agree with the alternative approach, since it seems:
- less complex - at any time, DGSs allocate total recoveries received from inception of the disbursement event to QAFM and other AFM according to their share of the financing mix in the initial disbursement event (the rule for inflows).
- more predictable - in the example presented, the total contributions to be levied over the six year period to meet the target level would be identical.
Yet, when the initial intervention is at least partially financed by other AFM (such as in the provided example) the full attribution of recoveries to QAFM is not justified and leads to the undesirable situation (as per point 26 of the draft Guidelines) in which QAFM would be inflated with funds stemming from borrowed funds that have to be repaid.