Brussels, 12/07/2007 (Agence Europe) - On Friday 13 July, EU member states' finance ministers will be going through their first reading of the draft EU budget for 2008, with a 'wait and see' strategy for funding the EU's new satellite navigation programme, Galileo, and increased funding earmarked for Palestine and Kosovo (see EUROPE 9463). In terms of administrative spending, EU Budget Commissioner Dalia Gybauskaite is expected to protest against the Council's strategy of accepting the new posts requested as a result of the most recent round of enlargement, while cutting the budget for the Commission for paying these new officials' salaries by €56 million. She is expected to point out that the Commission cannot recruit staff without money.
Galileo. The Portuguese presidency of the Council points out that it is necessary to await the European Commission's report in September on funding options for the Galileo project. At this stage, the Budget Council is not expected to make any decisions but will decide on a 'wait and see' position consisting of transferring the sums initially foreseen by the Commission for Galileo in commitment appropriations to the reserve, namely €151 million; agreeing to the proposed payment appropriations (€100 m); making an across-the-board reduction of €250 m in commitments and €532 m in payments from most of the budget lines in the competitiveness sub-heading (1a) to ensure some €343 m of commitment appropriations is available under 1a. This margin will be used to fund key EU projects as defined by the 21-22 June European Council. The Council does not know whether the entire margin can be used to get Galileo up and running. Several member states (including Denmark) do not agree with the reduction of funding for several programmes under this sub-heading desired by the Council (like funding for research and education and training). The Portuguese presidency says its proposed deal has been accepted by a massive qualified majority of members of the Council and argues that payment appropriations for the 7th Framework Programme of R&D in the 2008 budget are 45.5% higher in payment appropriations, and 7.7% higher in commitment appropriations, than under the 2007 budget. The Portuguese presidency has decided not to comment on the majority Council desire for a cut in the R&D programme budget on the European Commission's initial proposal of €163.7 m in commitments and €363.1 m in payments.
The Commission and European Parliament will criticise the Council's idea of cutting the budget for research, lifelong learning and Erasmus to create 'fictional margins'. In a report on Galileo due to be published in September, the European Commission will give its views on two major funding options for stumping up the €2.4 bn required over the next five years (2008-2012), namely 1) funding from outside the EU budget from the European Space Agency, for example (but the Commission fears the procedures involved may be cumbersome) and 2) revising the financial perspectives (the overall budget) because sub-heading 1a does not contain enough funding to cover Galileo's needs. Most members of the Council are hostile to a review of the upper limits of the financial perspectives, but by a wide majority the European Parliament's budgets committee has called for a review of the EU's budget.
Palestine and Kosovo. The Council is preparing to increase the commitment appropriations initially proposed by the Commission in its Preliminary Draft Budget for 2008 for the external action heading (Heading 4) by €260 m, increasing the aid budget for Palestine from €180 m to €260 m
(an €80 m rise) and earmarking €180 m for Kosovo. These sums will be put in the reserve while awaiting more detailed estimates from the Commission in October on EU aid for the two countries. The EP has not yet formulated any special demands for this heading, preferring to wait for more detailed figures from the Commission.
Liaison with EP delegation. Before its first reading of the draft budget for 2008, the Council will meet with a delegation from the European Parliament for the customary conciliation meeting. The EP does not hold out great hopes for the meeting because most issues (Galileo and funding for Palestine and Kosovo) are not yet ready but it hopes to reach agreement with the member states on a statement calling for better control of spending by executive bodies and decentralised agencies. The EP is expected to agree with a statement prepared by the Council on concerns at delays in the selection and recruitment process for new officials from the 10 countries which joined the EU in 2004 and the two which joined in 2007 (Romania and Bulgaria).
Administrative expenditure. The Council is prepared to agree to all the new posts requested due to enlargement of the EU: 889 new posts divided among the Commission (including offices like EPSO, the Publications Office, OLAF etc) (853), the Court of Auditors (18), the Committee of the Regions (15) and the European Data Protection Supervisor (3). According to the Council's draft budget, Commission administrative expenditure will total €4.54 bn in 2008, a 4% rise on the 2007 budget. The Council's operating budget for 2008 stands at the moment at €594.7 million, 0.2% up on the 2007 budget, leaving a margin of €266.7 m under Heading 5.
Total expenditure. The Council is expected to approve in first reading a total budget for 2008 of €128.4 bn in commitment appropriations (up 1.4% on the 2007 budget), which is €716.9 m less than in the Commission's Preliminary Draft Budget for 2008, €119.41 bn in payment appropriations, €2.12 m less than in the Commission's initial draft. The budget envisaged by the Council foresees payment appropriations of 0.95% of the Gross National Product (GNP) of the EU27, described as a 'historically low level', which the Commission and EP delegation will no doubt be pointing out. (lc)