Brussels, 01/02/2006 (Agence Europe) - On 1 February the European Commission adopted a new inter-institutional agreement on budgetary improvement and the improvement of budget procedures. This proposal is needed in view of the definitive adoption at the end of April or the beginning of May, by the European Parliament, of the packet of financial perspectives for 2007-13. This proposal accurately reflects the common position reached in December 2005 by EU Heads of State and Governments. The most interesting element involves the substantial increase planned for budgetary flexibility, one of the principles requested by parliamentarians. "With this proposal the way is now cleared for a constructive negotiation between the Parliament, the Council and the Commission", commented Commission President Barroso. “We need to have an agreement by April. Everyone understands very well that otherwise the execution of many EU programmes will be problematic as from 1st of January 2007. We have to act fast while being prudent, responsible and realistic. The credibility and effectiveness of the enlarged Union is at stake” added Dalia Grybauskaite, Commissioner for the Budget.
The Commission explained that the Inter-Institutional Agreement (IIA) establishes rules and mechanisms for the management of the financial framework over a 7 year period and for the setting up of annual budgets. It has to be agreed by the Council, the European Parliament and the Commission. Without this agreement financing will not be available for the programmes proposed for the enlarged Union and execution of up to half of the EU budget might be jeopardised. The three important elements of the new version proposed for the IIA are as follows:
Flexibility: in keeping with the current financial framework (2000-2006) the flexibility instrument is limited to EUR 200 million a year and is in practice used almost exclusively in the area of external actions. In line with the European Council conclusions, the Commission is proposing to increase the amount of the flexibility instrument up to EUR 700 million a year and to give it a broader scope, covering not only annual unexpected needs but also new multi-annual requirements.
European Globalisation Adjustment Fund. The Commission will provide a full legislative proposal detailing the functioning of this fund at the end of February. This initiative was endorsed by the European Council in December. The proposal on IIA includes basic rules on how the fund functions and which will receive a maximum planned funding of EUR 500 million per annum (3.5 billion over seven years).
Budget revision: In 2008/2009, in 2008-09 the Commission will present to the European Parliament and to the Council a comprehensive White Paper, covering the whole structure of the budget, expenditure and revenue sides. It will be the fruit of detailed preparation and wide consultation in which European Parliament should be deeply involved.