Brussels, 06/07/2007 (Agence Europe) - The Committee of EU member states' representatives to the EU (COREPER) reached qualified majority agreement, on Thursday 5 July, on preparatory work to enable EU finance ministers to make their first assessment of the draft EU budget for 2008 at their meeting on 13 July. As often happens at this stage in the budget, the draft makes several cuts in budget on the European Commission's initial document. Some member states still have reservations about the proposed deal, like Denmark, Sweden, Finland and Belgium, which do not agree to the cut in research funding desired by the Council to stump up some of the extra funding needed for the EU's satellite navigation programme Galileo.
Total expenditure. According to the COREPER agreement, the draft 2008 budget that the Council is preparing to adopt in first reading will total €128.4 billion in commitment credits (1.47% more than the 2007 budget), down €717 million on the European Commission's initial draft. The total of payment credits suggested is €119.41 bn (up 3.4% on the 2007 budget), which is €2.1 bn less than the European Commission's Preliminary Draft Budget, representing 0.95% of the EU's Gross National Income (GNI), compared with 0.97% of GNI in the European Commission's initial draft.
Competitiveness (Sub-heading a). The competitiveness sub-heading covers policies vital for implementing the Lisbon Strategy. The main programmes here are the 7th Framework Programme for Research and Technological Development (FP7), the Innovation and Competitiveness Programme (ICP), the trans-European networks (TENs), the Lifelong Education and Training Programme, the Progress Programme (integrated employment and social solidarity programme), Marco Polo II and Galileo. The reductions suggested by the Council total €266.4m in commitment credits under this sub-heading and €548.4m in payment credits. It is above all the funding for the FP7 which is being cut (-€163.6m in commitment credits and -€361.1m in payment credits), which some member states and the European Commission are unhappy about. The Portuguese presidency's tactic seems to be to reduce funding for research to free up more money for implementing Galileo (at this stage, the Council and Commission have earmarked €151m in commitments and €100 mil in payments for Galileo for 2008). In September of this year the European Commission will be unveiling suggestions for how to stump up the €2.4 bn that Galileo will cost in public funding over the 2008-2013 period.
Cohesion (Sub-heading 1b). The Council is suggesting reducing the payment credits for the Structural Funds by €498m (the European Regional Development Fund, EAGGR, and the European Social Fund, ESF) but is not making any changes to the Cohesion Fund budget. The Council has agreed to the initial draft for commitment credits under the cohesion heading (€46.87m for the Structural Funds and Cohesion Funds).
Natural resources (Heading 2). The Council's draft recommends an across the board cut of €550m in direct farm aid and market support (including €200m to be cut due to account clearance decisions). The draft published for first reading earmarks €41.9 bn in 2008 funding for direct aid and market measures, plus €12 bn for rural development. Alongside agriculture and rural development, the natural resources heading also covers environment programmes (€267m in commitment credits), fisheries (€589m in commitment credits under the European Fisheries Fund), healthcare and consumer protection.
Citizenship, freedom and justice (Heading 3). The Council has made slight cuts (-€18.8m in commitment credit sand -€62.8m in payment credits) in some programmes (like managing flows of immigrants and fundamental rights) to allow sufficient slack in the budget.
External actions (Heading 4). COREPER has agreed at this stage to the 889 new jobs demanded to meet EU enlargement needs, 853 of them for the Commission. It has, however, reduced administrative expenditure for some Commission departments (OLAF, EPSO and OPOCE).
Meagre results at budget talks
Representatives of the Council, Commission and Parliament met up on Friday 6 July to prepare for the first reading of the draft 2008 budget. As often occurs at this stage in the negotiations (before the first reading at the Council), little of substance was achieved. On behalf of the Council, the Portuguese presidency justified the planned cuts in credits for various headings, explaining that the budget had to follow policy rather than the other way round.
The European Parliament delegation, made up of the two rapporteurs, Kyosti Virrankoski (ALDE, Finland) and Ville Italaa (EPP-ED, Finland) and the president of the Budgets Committee, Reimer Boge (EPP-ED, Germany), protested against the cuts in credit desired by the Council, particularly the cuts in funding under Heading 1a (research). The MEPs stressed the importance of reaching agreement under the current budget negotiations on the funding of Galileo and the European Institute of Technology. They took note of the Council's suggestion of including extra funding for Palestine and Kosovo in reserve, but said that funding for these two countries should not act to the detriment of traditional EU aid for outside the EU. The EP may therefore call for the flexibility instrument to be mobilised for external action (the flexibility instrument makes it possible to overshoot the annual €200m maximum under any heading). But the Council is strongly opposed to using the flexibility instrument. The European Parliament is expected to side with the European Commission and oppose the Council's attempt to tighten the budgetary belt for certain administrative expenditure.
Some sources suggest that the European Parliament may ask the Council to clarify the situation regarding national assurances of good management and proper use of European funding. Some member states have agreed to publish such assurances but others are refusing. (lc)