Brussels, 26/10/2011 (Agence Europe) - On Wednesday 26 October, the European Parliament looked like it wanted to fight it out with European governments when it demanded a hefty rise in the EU's budget for 2012, a rise of 5.2% in payment appropriations, but has indicated that it will come round to the EU Council of Ministers' line of greater belt-tightening amidst the sovereign debt crisis. An EP source explained that nobody wants a political crisis right now over the 2012 budget and therefore there is unlikely to be much of problem in striking a deal with the Council, especially given the difficulty of expecting governments to contribute more cash to the EU's budget against the current backdrop. The conciliation process will start in November, however, to negotiate a compromise with the Council of Ministers for next year's budget and the aim of the EP vote on Wednesday was to place markers in the sand to indicate its negotiating position.
The European Parliament has approved a draft EU budget for 2012 of €133 billion in payment appropriations, up 5.2% on 2011. The Council of Ministers suggested a 2.02% rise, which amounts to a virtual freeze on the 2011 budget given the high rate of inflation. When it comes to commitment appropriations, the EP wants a total of €147.7bn (3.95% more than in 2011).
The EP suggests a sligtht increase on the European Commission's initial draft budget for Heading 1a (Competitiveness) and Heading 4 (foreign action).
Heading 1a (Competitiveness). The Parliament disagrees with the Commission and Council's plan to take the cash for ITER (the nuclear fusion project) from funding for the EU's seventh framework R&D programme. The MEPs say that ITER should be funded from its own cash, rather than hiving off monies from other research projects. Amendments to the budget tabled by the EP shoud provide an extra €9 million for young people, a €55 million rise in cash for professional training, and €13 million for small business research and competitiveness.
Heading 1b (Cohesion). The MEPs have restored the initial draft budget suggested by the Commission (€45.1bn in payment appropriations and €52.7bn in commitment appropriations)
Heading 2 (Resource management). The total budget for this heading, mainly comprising farm spending, is €58.2bn in payments and €60bn in commitments). The MEPs have added special aid of €250 million for fruit and vegetable producers hit by the E.coli crisis last summer and want to keep the EU food aid for poor Europeans at its curren trate (€500 million).
Heading 3 (Freedom, security, justice and citzenship). The EP is not happy about the cuts suggested by the ministers for the European Refugees Fund, the European Returns Fund and the External Borders Fund and wants FRONTEX's budget to rise by €25 million to cover maritime borders in the Mediterranean and step up surveillance of the border between Greece and Turkey.
Heading 4 (Foreign action). The MEPs have endorsed a €100 million rise in aid for Palestine and a €27 million rise for the development and cooperation fund for Asia and Latin America. They have added €3 million for election observation and €3 million for the Turkish Cypriot Community. To fund these increases, the MEPs have reduced funding for the EU's police mission in Afghanistan and emergency measures under the Common Foreign and Security Policy.
Heading 5 (Administrative spending). The MEPs have reduced the budget for running the European Parliament by freezing expenses, reducing travel expenses by 5% and the budget for interpreting by 10%.
The rapporteur, Italy's Francesca Balzani (S&D), said during the debate which preceded the vote that the European Parliament has made the achievement of the EU 2020 strategy central to the 2012 budget: in a situation of crisis, it is vital to send out a positive signal to the citizens, but also to the markets, by proposing anti-crisis measures and ensuring that the budget is swiftly adopted in a climate of inter-institutional cooperation. The European Commission, she continued, “is doing the best it possibly can during these times of crisis ” and it has the trust of the European Parliament.
The rapporteur on the budget of the Parliament, Jose Manuel Fernandes (EPP, Portugal) stressed that despite the fresh challenges, real cuts have been proposed for administrative expenditure: in reality, we can talk about negative growth. The Council cannot be unaware of the efforts made in the other institutions to bring costs down whilst allowing the Union to do its day-to-day work.
The EP “does not deserve the criticisms of the Council”, said the rapporteur on the flexibility instrument, Germany's Reimer Boge (EPP), who criticised the “hostility” all too often expressed by the Council about the European budget, which has increased less than the national budgets, but needs to have sufficient resources to be effective.
On behalf of the Council, Jacek Dominik, the Polish under-secretary of state for finance, said that there are no differences of opinion between the Council and Parliament on the priorities of the budget, but that there are on the way of achieving them. Amongst other things, he criticised what he sees as an overestimation of the payment levels. On the other hand, he is concerned about savings on the common foreign and security policy (CFSP), which calls for further expenditure but is extremely important for the Union as a whole.
The conciliation will begin on 1 November, said Budget Commissioner Janusz Lewandowski, who laid emphasis on a number of delicate points: - the neighbourhood policy, the funding of which cannot be covered by simple redeployments; - ITER: the Commission has “had to invent a further compromise amendment”, but it will need to show willingness to move forward “if we do not want to make ITER an obstacle to the adoption of the budget”; - the level of payment appropriations. The institutions have agreed to considerable self restraint and the Council needs to accept the scale of these efforts.
The mobilisation of the flexibility instrument will, according to Italian member Giovanni La Via (EPP), help to re-establish confidence and move out of crisis, a priority shared by Sweden's Göran Färm, who is in favour of a moderate increase in the budget in the future-facing areas. Denmark's Anne Jensen (ALDE) expressed some surprise at the “bizarre” economies proposed by the Council: is it reasonable to reduce the funding to the new institutions in charge of financial monitoring?
The most important thing in the view of Germany's Helga Trüpel, who was speaking on behalf of the Greens/EFA Group, is investment in sustainable policies, intelligent investments in the future. The taxpayer wants Brussels to spend less and therefore wants the budget to be cut, protested Hungary's Lajos Bokros (ECR), while Portuguese member Miguel Portas (GUE/NGL) criticised an “inadequate budget, which does not always make the right choices”.
The president of the committee on budgets of the EP, Alain Lamassoure, pointed out that scarcely two years ago, the finance ministers were accusing the Union of not spending enough or fast enough. Now, in a twist of “cruel irony”, the European Council “is trying to find a solution to the excessive indebtedness this attitude brought about”. The EP is aware of the constraints which are unavoidable for the national budgets. These constraints can be measured in the payment appropriations. “We want to reach a swift agreement, but we must pay attention to four points”, he added: - taking account of the priorities of the Parliament, particularly under the heading of competitiveness expenditure and Europe's action in the world; - coherence between the decisions made by the European Council and their translation into budgetary terms. For example, the immigration policy or financial monitoring resources; - justice for the countries which most need Europe's help to catch up on the delays to which they have been condemned by a tragic history: they must not be the indirect victims of the mismanagement of various other member states; - the funding of priorities, the “key actions” of the EUROPE 2020 programme.
In conclusion, Lamassoure said that a return to growth, to strong levels of growth, is the “best guarantee that the debt will be repaid”.
The Greens/EFA Group, French member François Alfonsi announced, will abstain: “unsustainable cuts are not a measure of economy, but of strangulation” and the EP must distance itself from this anti-European attitude. “Attacking the financial resources of the Union is not fighting the crisis, but making it worse”, in his opinion. Several MEPs took the floor on the need to make savings, some of them calling for an end to the Strasbourg sessions. The British Conservative member James Elles said that he believed that t€2 billion could be saved by re-examining posts where the money is unused or ill-used.
The budget is “condemned to increase”, concluded Commissioner Lewandowski. On behalf of the Council, Jacek Dominik stressed that this increase was acceptable to everybody and called on the Parliament not to “take everything to pieces every year” when renegotiating the upper limits. This appeal was not to Reimer Boge's liking: it is not up to the Council to dictate our behaviour, he said, pointing out in passing that over the last 10 years, the budget of the EP has risen by 37%, while the national budgets have increased by an average of 62%. (LC/LG/transl.fl)