Brussels, 12/07/2005 (Agence Europe) - On Friday 15 July, the Member States of the EU are to adopt a draft strict budget for 2006, reduced by over a billion EUR in payment appropriations compared to the initial proposal of the Commission (EUROPE 8937), at first reading. The meeting of the Ecofin Council (in its “budget” configuration) will be preceded by concertation with a delegation from the committee on budgets of the European Parliament. This meeting between both branches of the budgetary authority is likely to be dominated by differences of opinion on the means of funding the external actions of the EU, with the Council hoping to avoid exceeding the ceiling for the heading in virtue of the principle of “budgetary discipline”.
After an unproductive meeting of the budgetary trialogue last Monday, the Parliament acknowledged that it will obtain nothing, at this stage of proceedings, on the draft budget for 2006. It hopes to reach agreement on the means of funding aid of the 170 million EUR pledged by the EU to come to the aid of the countries of Asia whose coastlines were ravaged by the tsunami of December 2004 out of the current budget (2005). The EP hopes to get as much fresh money for this as it can.
At first reading, the Council is to decide to reduce the payment appropriations for 2006 to 111.42 billion EUR (1.14 billion EUR less than the initial proposal), which represents 1.01% of gross national income (GNI) of the EU (compared to 1.02% in the Commission's draft). The commitment appropriations will be at a level of 120.80 billion EUR (-478.43 million EUR on the initial proposal).
Agriculture: compared to the Commission's proposal, the Council will reduce the appropriations (commitments and payments) for direct aid and market expenditure by 150 million EUR (to a level of 43.49 billion EUR). At the budgetary trialogue, the Council and EP agreed to the redirection of 655 million EUR in market expenditure and direct aid towards rural development (modulation of 3% of direct aid in 2006). The Council has taken up the budget as proposed for rural development (7.77 billion EUR, including modulation).
Structural actions: The Member States support a reduction of 150 million EUR in payment appropriations (but no reduction in commitment appropriations). The reduction in payment appropriations refer mainly to the “Objective 1” funds (-55 million EUR) and the “Community initiatives” (-78 million EUR).
Internal policies: the proposed budget is at 9.17 billion EUR in commitment appropriations (8.32 in payments), of which 5.28 billion EUR will go to the framework programme for research (4.61 billion EUR in payment appropriations). This is equivalent to reductions of 43.41 billion EUR on the initial proposal in commitment appropriations (of which -14.35 million EUR for the programme in favour of businesses and -14.55 for actions in the field of energy and transport) and 516.01 million EUR in commitment appropriations (including -428.74 million EUR for the framework research programme).
External policies: the Council and the EP are opposed on the method of funding for the EU's new major commitments. Whilst accepting the sums proposed for reconstruction of Iraq with no changes (200 million EUR) and in the countries of Asia hit by the tsunami (180 million EUR) and the action plan in favour of sugar-producing ACP countries (40 million EUR in 2006), the Council is planning, at this stage of the procedure, to reduce by 165.15 million EUR the commitment appropriations for other programmes. These reductions, which will mainly affect the programmes for the countries of Central Asia (-19.53 million EUR), relations with the Middle East (-32.285 million EUR), relations with the ACP countries (-27 million EUR) or relations with the Balkans (-18.3 million EUR), will give the Council a margin of 41.65 million EUR and thus avoids having to use the flexibility instrument. The Commission, for its part, has proposed recourse to this instrument (allowing the ceiling for one or more headings to be exceeded per year by up to 200 million EUR) to the tune of 123.5 million to pay for reconstruction in the countries of Asia. The Parliament supports the proposal of the Commission, because it refuses to curtail the EU's ambitions in its traditional priority areas (ACP, Asia, Balkans…).
Administrative expenditure: The Council plans to reduce the credits (including 10.27 million EUR for its own budget and 94.41 million EUR for the Commission's running costs) by 119.87 million EUR. The Council agreed to 660 of the 700 new posts called for by the Commission.
Pre-accession: The Council suggested a reduction of 127.25 million EUR in payment appropriations (non for commitment appropriations), including a reduction of 44.6 million EUR for aid to Turkey.