Brussels, 20/11/2006 (Agence Europe) - Finance ministers from the EU Member States will meet in Brussels on Tuesday 21 November to adopt the second reading of the draft general budget for 2007. The final straight before the adoption of this budget by the European Parliament in December, however, is littered with pitfalls. Before approving the draft, the Council will meet the EP delegation to try to reach agreement on the three issues on which they disagree: the size of the savings to be made in administrative expenditure (the most difficult), the amount of payment appropriations and spending on the Common Foreign and Security Policy (CFSP) (see EUROPE 9308 on the budgetary trilogue). The Finnish Presidency is in an uncomfortable position, above all, because three Member States (Spain, Italy and Poland) do not agree with the Council declaration on productivity gains, an issue to which it attaches a great deal of importance. These countries are against the size of the reduction in posts that would result from this very rigorous strategy. Dalia Grybauskaité, the Commissioner responsible for the budget, is furious with this statement, which is, however, supported by several delegations for whom spending rigour is important, but which could result in the loss of 1,700 jobs in the Commission by 2010.
On the sidelines of the Ecofin Council, the Council and Parliament, the twin branches of the budgetary authority, hope to reach agreement on updating the arrangements of the Financial Regulation. The Council and EP are expected to agree to two proposals amending the draft 2007 budget: the reduction, by €852 million, of estimated agricultural spending (letter of amendment No. 3/2007) and setting up a reserve of € 500 million for the European Globalisation adjustment Fund (letter of amendment No. 2/2007). Finally, the Council and EP will examine a proposal to reduce the 2006 budget by €3.9 billion (mainly from unused money in the Structural Funds).
The main outcomes of the Council's preparatory work on the draft 2007 budget are:
General principles: the Council highlighted the need to abide by the annual ceilings set by the financial perspective. It accepted a “limited and controlled” rise in payment appropriations to take account of the constraints on national budgets but rejected the EP strategy of holding funds in reserve (and releasing them under certain conditions). In first reading, MEPs put 30% of reserve funding under a number of budget lines, while awaiting the Commission's guarantee to Parliament that taxpayers' money would be used well. According to the Council, these conditional reserves are against the spirit of the Financial Regulation.
Total budget: the Council restored the allocations more or less to the levels of its first reading in July: €125.58 billion in commitment appropriations and €7.6 billion in payment appropriations. The reductions, compared with what the EP voted for, affect particularly the following policies: - competitiveness (-€2.7 billion in payments, with reductions of €1.7 billion in the 7th research framework programme and €700 million for energy and transport); - cohesion (-€2.5 billion in structural funds and in payments); - management of resources (-€1.49 billion in payments, including reductions of €1.35 for direct agricultural market payments, € 30 million for the European Fisheries Fund and €91 million for the Life+ environmental programme); - external operations (-€654 million in credit appropriations, including reductions of €140 million for pre-accession instruments and €254 million for ACP programmes); - administrative spending (€106.7 million, including a reduction of €96 million for Commission officials).
Total amounts by heading: the Council has allowed for €8.7 billion in commitment appropriations and €6.7 billion in payments for “competitiveness” (research, transport, etc.), €45.5 billion in commitments and €37.3 billion in payments for “cohesion” (structural funds and cohesion), €56.2 billion (commitments) and €54.6 billion (payments) for natural resources (including €42.7 billion in commitments and €42.4 billion in payments for agricultural aid and market spending, after the reduction of €852 million, as proposed by the Commission, and a further reduction of €120 million in this sector), €1.1 billion in commitment appropriations and €1 billion in payment appropriations for citizenship, freedom, security and justice, €6.4 billion (commitments) and €7.2 billion (payments) for external operations (including €159.2 million in commitments and €120.4 million in payments for the CFSP, with the EP voting in first reading for €86.6 million and €65.8 million less respectively, and €6.8 billion (commitments and payments) for administrative expenditure - €4.2 billion of which is for the Commission (including the pensions of all the institutions and the management of the European schools), an increase of 3.4% on the 2006 budget. (lc)