Brussels, 14/10/2004 (Agence Europe) - On Wednesday the European Commission adopted a proposal to revise current financial perspectives for 2002-06 in respect of the ceiling on own resources and to take into account the following three elements: implementation of planned modulation for Common Agricultural Policy reform (reduction of direct payments for strengthening funding for rural development); continuation in 2005-06 of Peace Programme in Northern Ireland (see above) - Ireland's loss of eligibility for cohesion funds.
Agriculture: the decision will help towards authorising the transfer of funding from section 1a (market expenditure) to section 1b (rural development), in compliance with the principle of modulation of aid as introduced by the June 2003 reform. The Commission explains that the transfer of funding will not change the general ceiling for the agriculture ceiling as modulation simply involves a sum total of nil for transfer between the two sections. Modulation involves a reduction (of 3% in 2005, 4% in 2006 and 5% in 2007-2012) of direct payments that are higher than EUR 5000. Economies will therefore be made and will help to increase the rural development fund. According to estimates, commitment appropriations to transfer to rural development will rise to EUR 655 million for the 2006 budget. Modulation will begin in 2005 but economies made will be available for the following year. The Commission is calling on the budgetary authority (Council and Parliament) to adopt this proposal so that it will be able to present, in May 2005, at the latest, a preliminary draft budget for 2006, that takes into account the proposals for CAP reform.
Structural actions: on 17-18 June 2004 the European Council invited the Commission to continue in 2005 and 2006 the Peace Programme (consolidation of the peace process in Northern Ireland); taking into account the absence of a margin characterising section 2 of the budget (structural actions), the Commission is proposing to increase the "structural actions" sub-section to EUR 60 million in 2005 and 59 million for 2006 (commitment appropriations) to take into account the additional spending in the Peace section (as indicated in EUROPE 13 October 2004, p 12). At the same time, the Commission is expected to reduce the commitment appropriations in the "Cohesion funds" section by the same amount (- EUR 61 million in 2005 and - 60 million in 2006). This will take into account Ireland's loss of eligibility for these programmes from 2004. The proposed adjustment in this "Structural Actions" section will therefore have a technical impact with no budgetary consequences.