Brussels, 15/07/2005 (Agence Europe) - The EU Member States reached an agreement on Friday in Brussels on the adoption, at first reading, of a draft budget for 2006, reduced to EUR 1.14 billion in payment appropriations (PA) compared to the European Commission's initial proposal (EUROPE 8989). The European Commission disputed the reduction of EUR 428.75 million in research spending, while the Council notes that the amounts foreseen (EUR 4.61 billion in total PA) is a 12% rise compared to the 2005 budget. During a press conference, the president-in-office of the Ecofin Council (in “budget” formation), British Secretary of State to the Treasury, Ivan Lewis, stressed that the budget foreseen for research was up 12% compared to the 2005 budget. Budgets Commissioner Dalia Grybauskaité protested stressing that these cuts could lead to having to give up certain projects underway. Janusz Lewandowski, Chair of the EP Committee on Budgets, stressed that the EP and Council's positions were very far removed from each other. He criticised the cuts made in internal policies. Mr Lewis firmly defended the Council's stance, saying that the problem with the EP and Commission is that they want to spend much more money than they do. His convictions, he continued, are shared by most of the European taxpayers who want the money to be better spent. The Ecofin Council meeting (in “budget” formation) was preceded by consultation with a delegation of the European Parliament budgets committee, whose results are not very impressive. An agreement was found on the 2006 transfer of agricultural funds to rural development and on two subjects for the budget 2005 (aid to tsunami victims and support for Slovakia after a natural disaster). The parliamentary delegation criticised the budgetary constraint announced by Member States on the subject of EU external aid. As foreseen, by way of the “budgetary discipline” principle, the Council refused to mobilise the flexibility instrument that authorises exceeding the ceiling of the heading by EUR 200 million.
At first reading, the Council decided to bring PA in 2006down to EUR 111.42 billion (-1.14 billion compared to the initial proposal), which represents 1.01% of Gross National Income (GNI) of the EU (compared to 1.02% according to the Commission draft). Commitment appropriations (CA) amount to EUR 120.80 billion (-478.43 million compared to the initial proposal). Compared to the 2005 budget, the draft budget 2006 adopted by the Council is up 4.82% in PA and by 3.65% in CA.
The results of the first reading in Council are:
Agriculture and rural development (EUR 51.26 billion in CA and EUR 51.20 billion in PA): the Council cut by EUR 150 million the appropriations (commitment and payment) devoted to direct aid and to market spending, to reach EUR 43.49 billion. At a Commission proposal, the two branches of the budgetary authority (Council and Parliament) accepted the transfer of EUR 655 million in market spending and direct aid to rural development (3% modulation of direct aid in 2006). The Council took the budget proposed for rural development on board as such (EUR 7.77 billion, including modulation).
Structural actions (EUR 44.55 billion for CA and EUR 35.49 for PA): Member States decided to cut PA by EUR 150 million (with no reduction in CA).
Internal policies (EUR 9.17 billion in CA and EUR 8.32 billion in PA): the Council earmarks EUR 5.28 billion in CA for the framework programme for research and EUR 4.61 billion for PA). This amounts to EUR 43.41 million in CA and EUR 516.01 million in PA (including a reduction of EUR 428.75 million for the framework programme for research).
External policies (EUR 5.22billion in CA and EUR 5.27 billion in PA): the Council approves the amounts proposed for reconstruction in Iraq (EUR 200 million) and in the countries of Asia affected by the tsunami (EUR 180 million) and the action plan in favour of sugar-producing ACP countries (EUR 40 million in 2006). It refuses, however, to exceed the ceiling of the heading as the Commission (with EP support) suggests, and the Council has had to make cuts in certain programmes (Central Asia, Balkans, ACP countries, Middle East). The reductions decided by the Council amount to EUR 165.15 million in CA and to EUR 82.55 million in PA and allow a margin of EUR 41.65 million (while the Commission proposed a negative margin of EUR 123.5 million filled by using the flexibility instrument).
Administrative spending (EUR 6.57 billion in PA and for CA): a reduction of EUR 119.87 million has been applied (-10.27 million for the budget and -94.41 million for the Commission's operating expenditure). The Council agreed at this stage to 660 of the 700 new posts requested by the Commission in the framework of enlargement.
Pre-accession (EUR 2.48billion in CA and EUR 3.02 billion in PA): the Council cut PA by EUR 127.25 (no cut for CA), including the reduction of EUR 44.6 million for aid in favour of Turkey.
Budget 2005: An agreement has been found on the method of financing aid of EUR 170 million foreseen n 2005 for reconstruction in Asian countries affected by the tsunami: 70 million (emergency aid reserve), 72 million (funding redeployment), 15 million (flexibility instrument) and 13 million (decision in the autumn). EUR 5.6 million will be made available for the EU Solidarity Fund for Slovakia after the Tatras natural disaster.