Brussels, 14/10/2003 (Agence Europe) - The question of volume and of the arrangements for the funding of reconstruction in Iraq will be the main subject discussed by the Parliament next Tuesday in Strasbourg during first reading of the budget for 2004. The proposal put forward by the EPP-ED Group for foreseeing aid of EUR 500 million to this end was only just approved by the budgets committee, but it is highly likely that the European Commission's proposal will be adopted as a reasonable compromise due to the divergence within the EPP-ED and the caution shown by Member States (see EUROPE of 4 October 2003, p.10, and yesterday's EUROPE, p.5, for the Council's conclusions in this connection). On Thursday, the Parliament will adopt amendments to next year's draft budget as well as resolutions to accompany the reports by Jan Mulder (ELDR, NL) and Neena Gill (PES, UK).
The main themes covered by this stage in budgetary procedure will relate to the new posts requested by the European Commission and the financing of other EP priorities in the field of external actions, a budgetary heading that is under difficulty because of the many EU commitments on the international scene.
The main results expected after the EP's first reading are:
External action: It is expected that the ambitious EPP-ED proposal to include aid of EUR 500 million for Iraq will be abandoned to the advantage of the more reasonable Commission proposal providing for EUR 160 million in 2004, by using part of the margin available in the heading and by mobilising the flexibility instrument for the remainder. As the budgets committee, however, decided to increase funding for other EP priorities (cooperation action with Asia, Latin America, the third countries of the Mediterranean and the Middle East), which reduces the margin available under this heading by as much, the question of arrangements for financing aid remains unresolved. The budgets committee suggests that EUR 30 million should be used for reconstruction in Iraq from what remains in the margin after the other decisions for funding external action (namely EUR 35 million), and the balance (EUR 130 million) should be covered with the flexibility instrument. We recall that the Commission plans to put the margin available at the time of the preliminary draft budget 2004 (EUR 86 million) to greater use and hence to use the flexibility instrument less. In his draft report, Jan Mulder considers that the funding to be granted for rebuilding Iraq should meet the needs of the Iraqi people and be part of a political agreement implemented within the context of the United Nations.
Agricultural spending: The EP Committee on Budgets recommends increasing funding by EUR 176.3 million (+ EUR 93.3 million for market spending and +EUR 83 million for rural development) compared to what had been decided by the Council during its first reading, in order to result in a total agricultural budget of EUR 47.89 billion in commitment appropriations (EUR 41.27 billion for market spending and EUR 6.61 billion for rural development) and by EUR 46.80 billion in payment appropriations (EUR 41.27 billion for market spending and EUR 5.53 billion for rural development funding). Mr Mulder's draft report insists on greater account being taken of the environment in agriculture and is in favour of increased transparency on the origin of products and consumer information. Additional funding is foreseen with a view to the possible creation of an insurance regime to cover measures for wiping out animal diseases. MEPs continue to make a distinction between export refunds for live cattle and export refunds for beef and veal (as meat after slaughter).
Structural actions: Despite the endemic problem of commitments outstanding (RAL "reste à liquider"), the European Parliament is expected to increase by over EUR 2 billion the payment appropriations for structural actions (compared to the result of the first Council reading) thus increase them to a total of EUR 32.57 billion. The largest increase concerns Objective 1 of Structural Funds (+EUR 1.11 billion), followed by funding from the Cohesion Fund (+EUR 450 million). The Parliament awaits information from the Commission on payments possible under RAL or on payments that are said to be lost. This problem of RAL will be dealt with in a separate report by Gianni Pittella (PES, Italy) to be examined during this plenary session in Strasbourg.
Internal policies: Compared to the first Council reading, the budgets committee has increased funding by EUR 68.66 million for commitments and by EUR 398 million for payments (including an increase of EUR 310 million for research and technological development programmes in favour of SMEs). There is concern at the budgets committee, however, on the subject of certain "Info Points" which are expected to close their doors on 1 January 2004. The Commission is invited to take "immediate measures" to find a solution allowing these offices to continue their work.
Administrative spending: Funding for the creation of 272 new posts at the European Commission has been placed in reserve. It will be released once the Commission has provided guarantees on the possibilities of providing these posts. Another condition is that agents from acceding countries only should be recruited.
Pre-accession strategy: the committee on budgets suggests a reduction by 700,000 EUR in credits in favour of Turkey (compared to the Commission's initial proposal which was retained by the Council), rising to a total o 241.3 million EUR in commitment appropriations and to 191.6 million EUR in payment appropriations. The EP was invited to increase payment appropriations for pre-accession aids Sapard (+79.85 million EUR), Ispa (+119.79 million EUR) and Phare (+136.09 million EUR).
As for the draft report by Ms Gill (on the budget of the other institutions), the committee on budgets insisted on the existing margins in heading 5 of administrative expenditure to fund accommodation costs in advance, given that these will rise considerably after 2007.