Brussels, 06/03/2002 (Agence Europe) - On Tuesday, the ECOFIN Council adopted the conclusions on the budget guidelines for 2003. It hopes that these guidelines will be taken into account in budget preparation and during the European Commission's preliminary project preparations for 2003. The Council reiterated that the budget had to "suitably cover all real needs and resources required to implement the various policies of the Union effectively". It also emphasised that, "this includes applying the same degree of budgetary restraint as exercised by Member States of the Union". The Council considers that the Interinstitutional Agreement of 6 May 199 remained the cornerstone on the smooth functioning of the budgetary procedure and that the range of mechanisms it currently comprises are adequate to cope with unforeseen circumstances. Community expenditure must stay within the limits fixed by the financial perspective and sufficient margins must be maintained under the ceilings of the various headings, except under heading 2, notably to cater for unseen circumstances. Last year it was decided that for 2002 a flexibility instrument was applied in order to finance heading 2 with a part of this supplementary funding for fishing and cross-border aid; the other part of the expenditure for 2003 should be financed according to a methodology that still needs working out and which could again include a flexibility instrument.
Ministers have provided more precise details about factors that will be taken into account during preparations for the 2003 budget. In this context the Council: 1) Expects from the Commission a mid-term review of the CAP reform, "which it must take into account in the autumn if necessary"; 2) It states its intention of staying within the reference amounts for multiannual programmes and the ceiling under heading 4 for exterior actions. By fixing budget allocations the Council expects to take into account Community development policy, information about other contributors, the ability of partner countries to absorb funds and of the annual priorities which the Council has set itself. It advocates further support for Afghanistan and neighbouring countries under the 2002 budget and its appropriate continuation in 2003 in accordance with the financial framework laid down by the financial perspective. The Council also highlights the importance it gives to funding measures under the CFSP and would like to see the budgetary allocation for 2003 geared towards potential needs; 3) In accordance with the Interinstitutional Agreement, the Council would like to see a report on the pilot projects and preparatory measures that contain an evaluation of the results, before any proposal for a new programme or a new budget heading is submitted to the budgetary authority; 4) The Council believes that particular heed must be paid to the worrying situation of heading 5 (administrative expenditure) and to its evolution in the coming years. It is banking on potential savings to continue and better multiannual programming of property expenditure by the institutions as a way of achieving this objective; 5) The Council is actively pursuing its work with a view to preparing enlargement of the EU and emphasises the need for precise evaluation of future budgetary implications. The Council has put forward the following recommendations on:
Commitment Appropriations: These appropriations must correspond to real needs, be clearly identified and form part of a coherent funding programme. The Council has reaffirmed the value of financial programming particularly under heading 3 (internal policy) and heading 4 (external action) and the importance of a budgetary authority having, in good time for its budgetary procedure discussions, sufficient information on legislative proposals;
Payment Appropriations: The Council recommends (especially to the Parliament) of keeping a tight grip on payment appropriations for 2003 and regrets the shortcomings in budgetary implementation for 2002. The Commission is called on to improve budget forecasts;
Outstanding Commitments: The Council points to the need to keep the level of outstanding commitments under control and welcomes the agreement reached in November 2001 between the two arms of the budgetary authority and the Commission aimed at eliminating abnormal outstanding commitments in the medium-term. In this agreement, the Commission made a commitment to submit, with the preliminary draft budget for 2003, an action plan that foresees examining all the potentially abnormal files. The Council requests the Commission to rapidly begin this work;
Reform: The Council lays great store by the reform of the financial management undertaken within the Commission. In this connection it notes the Commission's intention to submit its draft budget for 2003, both in the traditional form and in the form of an activity-based budget (ABB). The Council recalls that in order to spread implementation of the budget more evenly throughout the year, the Commission should submit an implementation plan and send notification of deviations observed on certain dates.