Brussels, 10/10/2008 (Agence Europe) - The two arms of EU budgetary authority, the EU Council of Ministers and the European Parliament, are preparing to hold negotiations over the funding modalities for EU foreign aid in 2009 for Palestine, Kosovo, Afghanistan and Georgia. The payments will lead to an overshoot of the funding earmarked for foreign aid in the budget, so it appears inevitable that the “flexibility instrument” will have to be used despite the usual reluctance of EU member states. The “external action” heading is also under pressure because it appears that the option being favoured at present is for it to be used to fund farming in developing countries to the tune of €250 million in 2009. The European Commission initially suggested using unused monies from heading 2 (farm spending) but it is highly likely that the funding earmarked in 2008 under heading 2 to deal with the surge in food prices in poor countries (€750 million) will actually be used, taking the sums earmarked for developing countries to a billion euros, and therefore a new breakdown of funding may be decided for the period up to 2010.
The European Parliament will examine the 2009 draft budget during the 20-23 October 2008 plenary in Strasbourg. The European Parliament's budgets committee voted through amendments on Wednesday 8 October in first reading and will decide on Monday 13 October on the resolution to accompany the budget amendments (Jutta Haug Report). An overview of the main outcome of the talks at the budgets committee follows:
Total payment appropriations. The budgets committee did its best to fill the record high gap between financial requirements forecasts (the commitment appropriations) and programmed expenditure (the payment appropriations) in the 2009 draft budget. The MEPs say this situation suggests the budget will be badly implemented and there will be a shortage of resources for implementing the EU's priorities. Against a backdrop of general crisis, however, the committee members decided not to increase the payment appropriations to the maximum level allowed in the budget (0.97%) of EU GNI (gross national income). They decided on 0.954% of GNI. By comparison, the percentage of GNI was 0.899% in the European Commission's preliminary draft budget and 0.885% in the draft drawn up by the Council in first reading in July 2008. The Council-EP talks will take place on 21 November 2008 (before the second reading by EU budget ministers). The 0.954% GNI figure will become the EP's official negotiating position if the plenary confirms this at the 20-23 October plenary.
External action. The budgets committee decided that for aid for Palestine and Kosovo it would use the figures put forward in the European Commission's preliminary draft budget, increased by an amending letter. This means €300 million for Palestine in commitment appropriations and €280 million in payment appropriations, and around €500 million in commitment appropriations for Kosovo. Construction aid for Afghanistan (€160 million in commitment appropriations and €150 in payment appropriations) remains at the preliminary draft budget level. A new budget line was created for rehabilitation and reconstruction aid for Georgia but no monies have yet been earmarked ahead of the 22 October 2008 donor conference in Brussels. The budgets committee adopted an “asterisk amendment” of priorities for which nobody yet knows where the funding will be found, with additional funding for Palestine, Kosovo and Afghanistan - which means that the upper limit of heading 4 of the budget will be overshot by a “virtual” €390 million. This €390 million overshoot includes the €250 million earmarked for developing countries' agriculture in 2009. Negotiations will be held between the Council and the EP in November 2008 over how this flexibility instrument is to be used.
The budgets committee will give its views on Monday 13 October 2008 on the €750 million earmarked for developing countries' farming in 2008 and it is highly likely that this sum will not be paid out due to lack of time and a political bottleneck at the Council.
Climate change, the EU's social dimension and security. Following the reductions made by the Council in July 2009, the budgets committee re-introduced the funding suggested by the European Commission for most of the budget headings, increasing some of the headings beyond the preliminary draft budget level like for priority action and policies. The MEPs want a more than €2 billion increase in total funding for spending on a series of budget lines relating to EU action to tackle climate change. Usually this involves taking greater account of the climate in existing programmes, particularly in the domains of rural development, transport, research and the environment. For example, it is recommended that the payment appropriations for the LIFE+ programme are doubled and a new budget line be set up for climate change under heading 2 (natural resources) to improve the transparency and legibility of the budget. The new budget line would allow measures for tackling climate change and funding earmarked to this effect to be brought under a single heading. In addition to the transferred amounts, the MEPs want a further €20 million to be earmarked for this new budget line.
The EP also wants to boost funding for employment and the EU's social dimension, political priorities also covered in headings 1a (competitiveness) and 1b (cohesion). This involved the European Social Fund (which will have an extra €135 million funding for convergence, employment and growth), the Regional Development Fund and the Cohesion Fund. The MEPs also want an increase in dedicated payments for the programme to improve the financial environment for SMEs; the launch of new pilot projects, including an Erasmus project for entrepreneurs and action not help SMEs take advantage of opportunities to make their business international.
The citizen security priority is reflected in several budget lines amended by the Budgets Committee. In heading 3a (freedom, security and justice), for example, the increased funding for Frontex (the European agency for managing operational cooperation at EU external borders) is justified by the increasingly permanent nature of the mission, particularly at the EU's southern borders (€10 million extra in payment and commitment appropriations, including €5 million in reserve). The MEPs want to increase the commitment appropriations for backing projects of common interest in the trans-European energy network to facilitate the building of the Nabucco gas pipeline from central Asia to the EU visa the Caspian Sea in order to ensure long-term security of supply for the EU in gas. (L.C. transl fl)