Necessary to decide in June. All the elements in the case are there. I'm talking about financial perspectives for 2007-13. The European Commission has completed its proposals, the orientations of the European Parliament rapporteur are known, the representatives of the national parliaments have had their say, negotiations between Member States have begun at an ambassador level and the timetable for the ministerial sessions has been set out. The objective remains that of reaching a political agreement at the summit of 17-18 June. The necessity of succeeding there was strongly reaffirmed last week, notably by European Commissioner for financial programming, Dalia Grybauskaité. She proved that if it were impossible to reach a decision in 2005, the new programmes and new policies could not be launched in time and that although in 2007, the current programmes come to an end, nothing outside of agricultural and administrative spending could be financed. The big losers would be regional and cohesion policy (therefore, the new Member States above all: also see the declarations of Danuta Hubner in our bulletin 8923), research, trans-European networks and the security/freedom and justice area (the policies of the future in effect). At the same time, the Luxembourg minister Nicolas Schmit highlighted the political cost of any delay, “budgetary quarrels are the most pernicious and pollute the atmosphere. In the atmosphere of approving the Constitution, the Union needs a political success which presents a positive image of itself and which provides Member States with scope and citizens with confidence”.
These are good reasons for hoping that negotiations conducted in an open spirit and with a sense of solidarity have the common interest in sight. This does not mean that the game's been won, far from it. But all the leaders who, in coming weeks, will legitimately defend the interests of their countries have to be aware that the agreement will still be difficult in the second half of the year under the British presidency and therefore too late to prevent the Union blockage described by Ms Gribauskaité. That said, I'm not going to provide a summary of the dossier on the negotiating table and which is perfectly transparent and available to everyone. Out bulletin presented it last week with explanations and the positions taken by the different leaders (particularly bulletin 8922 with six pages spent on the different aspects). I would rather formulate a few remarks on the different aspects of the negotiations in the offing.
The European Parliament, the key player. The EP did not play an essential role in the definition of the previous financial perspectives. Its influence was increasing but was not yet decisive. Today, it has become a key player and it has been accepted that there would not be an agreement if its positions were not duly taken into consideration. The presidency of the Council decided to get EP president Josep Borrell and rapporteur Reimer Böge involved in the informal part of the ministerial work. While waiting for the ad hoc parliamentary committee to update the draft resolution (10 May) and that the plenary session reaches a verdict (at the beginning of June), the rapporteur's text already represents a basic element in negotiations. Certain aspects are controversial within the European Parliament itself (possible co-funding of part of agricultural spending, downward adjustment of certain funding proposed by the Commission in the context of competitiveness, non-budgetisation of the EDF), but only one element immediately appears debateable: the request to amend the period for the new “perspectives” by reducing them to five years or extending them to ten years so that they coincide with the Commission and parliament mandates themselves. It will be too late for the plenary to reach a decision on introducing an amendment which would involve a new financial calculation for all the programmes and their re-balancing. It is not as easy as Mr Böge thinks when just counting on the advantages of the parallel nature of the period for the perspectives and that of the institutional mandates; they have to be proved. I think that the plenary session would be wise to get rid of this request.
Commission proposals and Böge project are financially very close. By calculating to around thirty billion euro, the differences between the two projects (see this section in bulletin 8921), I was not far out in my arithmetic. But this truth ignores Mr Böge's creative accounting: by financing the European Development Fund supporting African, Caribbean and Pacific countries outside of the Community budget for EDF, the Solidarity Fund and reserves for emergency aid and funding for other programmes could be increased by reducing the overall amount. The difference between the two projects therefore becomes a modest one; it can be accounted for by the fact that it places certain funding elsewhere rather than by increasing the overall amount. Mr Böge would like to put EUR 2 billion in “justice/freedom and security actions and 6 billion in external actions by slightly reducing provision for other, undoubtedly essential sections (competitiveness, research)) but which, in his opinion, would remain sufficiently funded for efficiently putting into practice the Lisbon Strategy. Overall, those close to the presidency of the Council consider that the Parliamentary approach is reasonable and realistic and provides, by avoiding any excesses or demagogy, a political message.
Divergences on funding agriculture? The hypothesis of partial co-funding of agricultural spending (by way of the Community and national budgets) was formulated by Mr Böge in a very cautious way: it would only be used if funding already reserved for CAP policy was insufficient; it would be the exclusive responsibility of the old 15 Member States (the new Member States would be excluded from it) and it would be temporary. We expect, despite, these precautions, negative reactions from part of the European Parliament, due to reasons of principle and the fear that this would only be the first expression of a generalised assault on funding agriculture (Mr Böge has written that the financial envelope for the CAP is still excessive). Making co-funding concrete (it's not a new idea) will be “politically difficult” and financing the expenditure for Bulgaria and Romania poses a problem, as confirmed by the initial discussions at Coreper (see bulletin 8923).
The “British rebate” is on the agenda. Under “own resources and the corrective mechanism”, Reimer Böge calls on the Parliament to, “ask the Council for a review of the system before the end of the next financial perspectives”. I interpreted this sentence as also covering budgetary compensation for the benefit of the United Kingdom; it appears, however, that it is referring to the system of own resources of the Union in general and the Luxembourg minister for European affairs Nicolas Schmit declared during the joint EP/Committee of the Regions meeting that “an agreement is only possible if it is global. No subject can be avoided, including the British rebate”. So it's quite clear. The Ecofin Council, also chaired by Jean-Claude Juncker, will be dealing with it initially by discussing the chapter on budget “resources” and then the General Affairs Council will tackle it. It bet that this won't be before 5 May…
Division of funding won't be done in a linear way. Jean-Claude Juncker will be responsible for the final compromise to submit to the European Council of June and has said only one thing on the matter so far: his draft will be located between a tough position (1% of Gross National Income GNP of the Union) and the Commission's proposals (1.14% of GNP in payment appropriations and 1.24% in commitment appropriations) but not half way through (see this section in bulletin 8923). This will mean a certain lopping off in the funding proposed and which is considered inevitable. But this division will not be linear; the simplistic rule of reducing each provision by an identical percentage will not be followed. Certain funding will be reduced, other funding will remain unchanged and some could even increase. This is in fact the exercise the European Parliament rapporteur conducted and who predicted supplementary funding through the non-budgetisation of the EDF (see above). The presidency will not take a dogmatic stance on this subject: if these measures help a solution to be found and if the main net payer countries agree to it, why not? The real debate will be on the different levels of funding: what should be reduced, what should be kept or what should be increased? Last week's discussion between MEPs and national parliamentarians (summarised in our bulletin 8921) already anticipated the different positions. Divergences appear because the interests of net contributor and beneficiary countries and between new and old Member States diverge as well. National parliamentarians have often taken clear decision in favour of the interests of their respective countries. At the same time, new ideas have been presented, notably by Alain Lamassoure on resources and by the Greens on funding agriculture. The firm line of the Joint EP/Committee of the Regions should also be highlighted (see our bulletin 8922) in defence of a genuine European cohesion policy, as opposed to a simple financial transfer from rich to less wealthy countries and in defence of a provision that is equal to 0.41% of Union GNP, the “indispensable minimum”.
An instrument at the service of policies. The success of negotiations will depend on the level of awareness, by all, and on the fact that financial perspectives do no constitute a distribution of funding from one to another but israther, an instrument at the services of policies defined in common: Lisbon strategy (research, competitiveness, trans-European networks etc.); economic cohesion (regional policy); safeguard of nature and territorial balance (agricultural policy, rural zones, environment; weight of Europe in the world and new borders (foreign policy, defence policy, cooperation for development, common freedom, security and justice area). If not, the next negotiations will be nothing but “budgetary quarrels that poison the atmosphere”, according to the description used by Nicolas Schmit.
(F.R.)