Brussels, 20/10/2010 (Agence Europe) - The European Parliament (EP) has agreed to a moderate budget for 2011, taking account of the policies being followed in member states to reduce public spending. However, MEPs are calling for two things. Firstly, that member states agree to open a debate on the reform of how the EU budget is funded (based on the European Commission document on the budget review adopted on Tuesday 19 October, see related article). Secondly, that the EU Council of Ministers agree to put pressure on the Commission so that in 2012 it, at last, brings forward a review of the current EU financial framework (which covers the period from 2007 to 2013) to address new needs. The Lisbon Treaty strengthens some European policies and provides for new areas of competence - in particular, the common foreign and security policy, competitiveness and innovation, space, tourism, tackling climate change, sport and youth, social policy, energy policy, justice and home affairs. There are also new needs (such as ITER) to be financed and the new EU 2020 strategy for growth in Europe to be implemented.
“Every year, negotiation on the annual budget is difficult. But it has never been as difficult as this year,” admitted Alain Lamassoure, chairman of the EP budgets committee. The budget is essentially funded by contributions from the member states. With member states' budgets in serious deficit, it is very difficult to countenance a rise in the EU budget for 2011, Lamassoure explained. The EP is prepared to accept a budget for 2011 in which there is virtually no increase (the Council has proposed an increase in commitment appropriations of only 0.2% compared with 2010). And for the first time in 20 years, the EP passed amendments which do not exceed any of the ceilings on the five categories of EU budget expenditure for 2011. For the EP, negotiation on the 2011 budget must form part of a broad political agreement which allows it to have assurances on the future funding of the EU.
The EP has gone for a Community budget for 2011 of €140 billion in commitment appropriations (provisional figures), an increase of close to 0.9% compared with the 2010 budget (the Commission originally suggested €142.5 billion and the Council €141.7 billion) and €130.1 billion in payment appropriations.
For most budget lines, MEPs reinstated the Commission's draft budget after the cuts made to it by the Council. They also adopted further increases and some reductions, for example in the following headings (commitment appropriations only, unless payment appropriations are stated):
1a Competiveness (total €13.5 billion, 9% less than in 2010): MEPs asked for more money for the Lifelong Learning Programme (€18 million), the Entrepreneurship and Innovation Programme (€10 million) and Intelligent Energy - Europe programme (€10 million). To compensate for these increases, MEPs cut spending on the international fusion energy research project ITER by €47 million, taking it to a total of €304.76 million in 2011
1b Cohesion (total of €50.1 billion, 3% less than in 2010, and an increase of 17% in payments): MEPs added a new line, worth €2.5 million, for the Baltic Sea strategy
2 Natural resources (€59.4 billion in all, down 0.07% on 2010): the EP added €300 million for a fund to assist dairy producers, €6.7 million for the environment programme Life+ and €2 million to support for the management of fishery resources
3a Freedom, security and justice (total €1.1 billion, a 13% increase on 2010): the EP decided on a €2.35 million increase to the Daphne programme which tackles violence against women and children and a €1 million increase for prevention of terrorism
3b Citizenship (€682.9 million, 2.2% more than in 2010): the EP increased support for the World Special Olympics in Athens by €4 million and the Youth in Action programme by €3 million
4 External Action (€8.7 billion, 6.6% more than in 2010): MEPs allocated €100 million more to Palestine, the peace process and UNRWA, compensated by cuts in the Banana accompanying measures (-€18 million), in cooperation activities other than Official Development Assistance (-€23.5 million) and in the Common Foreign and Security Policy (CFSP -€45.7 million)
5 Administration (€8.2 billion, 4.1% increase on 2010): MEPs put money in a reserve, to be paid to employees at the EU institutions in case the Council loses the European Court of Justice case against the Commission.
In addition to demands on the review of the financial framework and on new own resources, the EP calls on the Council and the Commission to decide on mechanisms to facilitate the transfer of unused appropriations, in particular in the context of the revision of the financial regulations. Until now, money that is not used has been paid back to the member states at the end of the year.
In adopting an amendment put down by the S&D Group, Parliament backed the creation, in the European Union budget, of a guarantee fund for the EU stabilisation mechanism, which was established by the EU governments after the Greek debt crisis. It calls for budget needs related to this mechanism to be financed through a review of the current financial framework of the inter-institutional agreement of 17 May 2006.
Further powers following the coming into force of the Lisbon Treaty and financial cutbacks decimating funding: given these realities, the EP rapporteurs on the 2011 budget, Sidonia El¿bieta Jêdrzejewska and Helga Trüpel, confirmed during the debate the previous day, Tuesday 19 October, that they were prepared to agree to a modest budget increase in 2011, against commitments for the future which include a debate on creation of new Community own resources and an increase in budget ceilings which no longer correspond to the EU's real needs (see EUROPE 10232, 10234 and 10236).
The Lisbon Treaty has had a profound effect on inter-institutional relations, stated European Commissioner Janusz Lewandowski, saying he was prepared to play the role of honest broker in the conciliation phase between the EP and the Council which is about to open and in which everyone will have to demonstrate a willingness to compromise. As usual, the Commission will present letters of amendment (notably on updating agricultural spending and fisheries agreements with third countries).
The Council is standing firm on the debate on own resources. Belgian Secretary of State for the Budget Melchior Wathelet, speaking on behalf of the EU Council of Ministers, expressed his concern at the increases in the level of payment appropriations the Parliament is planning to approve and “even more so when this level is higher than the Commission draft budget”. The level of payment appropriations should be sufficiently high without being excessive, he said. On the other hand, he was surprised by the reduction proposed by the Parliament in funding for the common foreign and security policy (CFSP) “at a time when efforts are focused on putting the European External Action Service in place quickly”. The Council has taken careful note of the European Parliament priorities on youth, education and mobility, and “has not ruled out dealing with these priorities as part of a general agreement”.
With regard to payment appropriations, Wathelet said the Council was concerned about real absorption capacities under the headings 1b (cohesion). “If the EP restores the draft budget and, therefore, increases appropriations, questions may very well be asked about absorption of these various appropriations,” he said. He pointed out that the Council has agreed to a 14% increase in payment appropriations (for structural funds). Wathelet raised a final point relating to Parliament's intention to create eight new budget lines without allocating appropriations, on expenditure related to the implementation of the Lisbon Treaty, on the one hand, and revenue related to own resources, on the other. “I do not think that the 2011 budget is the most appropriate place for inclusion in the budget mechanism of the conclusions of important debates and difficult decisions we will have to take for future European Union funding in negotiations on the next multiannual financial framework. This is a long and complex debate which cannot be resolved in the coming weeks within the relatively restricted framework of the 2011 budgetary procedure.” On some of these issues, it can be expected that the Council take a number of initiatives or that, in any event, it make comments, Wathelet said.
For the EPP, Salvador Garriga Polledo said that a sound budgetary policy is defined particularly by sound management, which is far from the “financial butchery” so often proposed by the Council. That said, dialogue had to be sought with the Council.
The EP budgets committee had come up with quite broad agreement, said Göran Färm (Sweden) on behalf of the S&D, regretting, however, the reductions in structural fund payments, which would harm the most vulnerable countries. Färm expressed the view that the ITER project, despite its interest, was not the only priority research and development project.
Speaking for the ALDE Group, Anne Jensen (Denmark) called for clear guidelines on research, energy support for Palestine and, more generally, clearer guidance over the medium term.
After listening to what Mr Wathelet had to say on the Council vision, I am somewhat fearful over the conciliation process which awaits us. It will not be easy. Given the demands of the Council and those of the Parliament, it will not be a simple task to reconcile the points of view,” acknowledged Isabelle Durant (Belgium), on behalf of the Greens/EFA Group. The Greens/EFA put down an amendment (which was not approved by the plenary session) seeking to remove sustainable development criteria from the LIFE Programme and put them into all other areas.
The Lisbon Treaty promised more Europe, but with what money, wondered Michal Tomasz Kamiñski (ECR, Poland). The watchword is and remains “austerity”, regretted Miguel Portas (Portugal, speaking for the GUE/NGL). He said that the European budget should be able to make up for the gaps and negative effects of national budget policies, notably in terms of job creation. Marta Andreasen (EFD, UK), as she so often does, criticised the Community budget, which, she said, was not efficient and contained a number of irregularities. On the contrary, the budget was “ambitious and intelligent”, responded José Manuel Fernandes (EPP, Portugal), while insisting on the need to review the financial framework.
EP budgets committee chairman Alain Lamassoure said that, “for the first time in 20 years”, the EP would not pass an amendment exceeding current financial perspective ceilings. Similarly, where the Council agreed a symbolic 0.2% increase in commitment appropriations for 2011 (compared with 2010), the EP budgets committee was proposing an increase of 0.8% in euro, a fall in real terms. “For appropriations, the European Parliament will be listening closely to the Council, whose clear message we have understood,” Lamassoure stated. At the same time, the European Parliament will expect a similar display of responsibility from the Council. The Lisbon Treaty gives the EU new or enhanced powers: a common energy policy, a common foreign and security policy, a common immigration policy and a common space policy. “Thus, for us, negotiation on the 2011 budget must be accompanied by a political agreement to guarantee future funding of EU policies,” Lamassoure repeated: - an agreement on a review of the financial perspectives that apply from 2012 to ensure the funding of projects already begun, such as ITER and Galileo, and to begin giving funding to the new Lisbon Treaty powers and EUROPE 2020 priorities; - an agreement to “launch the debate on the reform of own resources”. Parliament asked for this three years ago. “We are pleased that the Commission is beginning ever so timidly to put some of the possible options on the table.”
British Conservative James Ellis spoke of his scepticism, given the current economic situation, over trying to “set in stone” figures for the next 10 years. The British government, he stated, wants Community spending frozen.
Concluding the debate, Council chairman Wathelet delivered a warning: “If we cannot reach agreement on the 2011 budget, chances of additional spending for 2011 will be further reduced and will not even be as much as what the Council is proposing today”. (L.C./L.G./transl.rt)