Brussels, 24/11/2004 (Agence Europe) - The Economy and Finance Ministers of the Member States of the EU (meeting in their budgetary configuration) are set to reach agreement at second reading on the draft budget for 2005 in Brussels on Thursday. The Council will first try to get over its differences of opinion with the European Parliament on the volume of payment appropriations and the mode of financing for Community agencies, the "Peace" programme for Northern Ireland and aid to Iraq. As announced, the Committee of Permanent Representatives of the Member States of the EU (Coreper) took the line of its experts from the Budget Committee by refusing, at this stage, almost all of the amendments adopted by the EP at first reading on 28 October, and re-established the total amounts from the Council's first reading in July. Here are the main subjects on the agenda of the concertation meeting between the Council and Parliament:
Level of payment appropriations: At its first reading, the EP earmarked payment appropriations of 111.266 billion EUR- an increase of 11.5% on the 2004 budget (1.05% of EU gross national income). At first reading, the Council limited this increase to 5.4% (0.99% of EU GNI). According to certain sources, the EP would like the right to increase the payment appropriations by 6.1% when the budget is adopted in December (breaking the symbolic 1% GNI barrier). The negotiations will be very difficult. The EP will call upon the Council to increase credits for structural actions, amongst other things.
Community agencies: In its vote at the end of October, the EP refused to include the 54 million EUR needed to set up twenty new Community agencies in the budget. The MEPs are therefore calling for fresh funds from the Member States to avoid having to give up certain priorities in the field of internal policies (heading 3 of the financial perspectives).
The "Peace" programme: The Council is determined to find the 60 million EUR needed to continue this programme in heading 2 of the financial perspectives (external actions), and would be prepared to agree to mobilise the flexibility instrument to pay for part of it.
External actions: At its first reading, the EP did not lay down any specific funding for aid to Iraq in 2005, although an agreement exists on the sums proposed by the European Commission (190 million EUR in commitment appropriations and 192 million EUR in payment appropriations). The Parliament hopes in this way to encourage the Council to agree to use the flexibility instrument to pay for some of the aid to the region, as the Commission has previously proposed. The Council is not at this stage able to agree to exceed the heading ceiling. For common foreign and security policy (CFSP), the Council may get its way (62.6 million EUR in commitment appropriations in total, as opposed to 52.2 million EUR at EP first reading).
Northern Cyprus and Croatia: In mid-October, the Commission proposed changes to the 2005 budget to take account of aid in favour of the Turkish Cypriot community and Croatia (EUROPE of 13 October, p.12). For tactical reasons, the EP would like to keep the budget of 105 million EUR earmarked for Croatia in the "external actions" heading, whilst the Commission is proposing to include programmes in favour of this country in heading 7, pre-accession aid. The Council agrees with the Commission. The EP has already created the technical conditions to allow the 114 million EUR (commitment appropriations) to be paid which were planned in 2005 for northern Cyprus (26.84 million EUR in commitment appropriations), of a total of 259 million EUR from 2004 to 2006. But it insisted that this should come under heading 3 (internal policies), whereas the Council prefers heading 7 (pre-accession).
Agriculture: At this point, the Council does not accept the Commission's amending letter providing for a reduction of 221.5 million EUR in agricultural market expenditure. It would prefer to go back to the figures it decided upon at first reading: linear reduction of 1 billion EUR in credits proposed by the Commission (a reduction applying to all sectors in which expenditure is likely to exceed 800 million).
2004 budget: The Council is not inclined to pay all 1.1 billion EUR requested by the Commission for structural funds (EUROPE of 15 October, p.15).