Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-09-06-Speech-2-180"
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Mr President, honourable Members of the European Parliament, ladies and gentlemen, it is a great honour and privilege for me to be able to present today, on behalf of the presidency of the Council, the draft budget of the European Communities for the year 2006, as established by the Council on 15 July 2005.
Secondly, Council gave particular attention to complying with the annual expenditure ceiling set by the current Financial Perspective and to leaving adequate margins below the ceilings – where possible – so that there is some room to finance unforeseen events during 2006.
Thirdly, regarding appropriations for payments, the Council has remained committed to a limited and controlled growth consistent with sound and rigorous financial management. The draft budget takes due account of the implementation rates in previous years and the expected implementation rates in the future. It also acknowledges fully the dramatic and welcome improvements in the implementation that we have seen in recent times.
Securing the right level of payment appropriations for the EC budget is especially important, and I am sure that all Members will be aware that national budgets are so tightly constrained. All public spending must be justified and prioritised to ensure continued public confidence and public support.
In setting the draft budget, Council took an overall approach which kept to those fundamental principles but which also aimed to provide adequate and realistic funding for the European Union's various budget priorities. For example, recalling the need for budget discipline, the Council increased the margins for commitments under heading 3: Internal policies, and heading 5: Administration, and created a margin under heading 4: External actions, but without the mobilisation of the flexibility instrument. We believe that this is entirely in keeping with Article 12 of our Interinstitutional Agreement. By carefully targeting amendments, the draft budget was achieved in a way which continues to meet genuine priority needs.
The Council also took a similarly carefully-targeted approach to payment appropriations across the budget affecting both compulsory and non-compulsory expenditure. While limiting the overall increase of payment appropriations, the draft budget still allows an increase of around 12% for research in light of the priority accorded to objectives set by the Lisbon Strategy and an increase of 9.8% for structural funds, reflecting improved implementation rates.
Sometimes, when people refer to the word 'cuts', they are not talking about cuts; they are talking about a different level of significant growth in budget headings, and yet sometimes the Council has been accused of proposing cuts. We are not proposing cuts in the vast majority of budget headings; we are talking about sustained and stable growth, but not necessarily to the level that others consider to be the best way forward.
I now want to move on to setting out the draft budget for 2006 in more detail. The 2006 draft budget establishes commitment appropriations at EUR 120.8 billion, an increase of 3.7% over the 2005 budget, and it establishes payment appropriations at EUR 111.4 million, 4.9% more than the 2005 budget, and payments correspond to 1.01% of Community GNI. Hopefully, you will have all received a comprehensive explanatory memorandum on the draft budget. I do not intend to bore you now with a line-by-line explanation – unless you really want me to, and I suspect you do not. However, I should draw your attention to the key points affecting the various budget headings of the Financial Perspective.
I will begin with heading 1, concerning agricultural expenditure. Let me stress my appreciation for the agreement that we reached to adjust the Financial Perspective ceiling for 2006. That will allow a transfer of EUR 655 million from market expenditure in subheading 1a to rural development in subheading 1b.
Regarding appropriations, the Council has made an across-the-board reduction in commitments and payments of EUR 150 million, affecting budget lines in subheading 1a greater than EUR 50 million. That reduction is designed to take account of under-implementation in recent years. However, the Council's position will be reviewed – and this is an important point – in the light of updated forecasts due in the autumn Amending Letter to the PDB. I must stress that this modest reduction is in line with the Council's overall approach of controlled growth of payment appropriations, which should apply to both compulsory and non-compulsory expenditure. The Council has accepted in full the amount proposed by the Commission for subheading 1b, where it believes the implementation is more effective.
Turning to heading 2, on structural operations, the Council has adopted the commitment appropriations proposed by the Commission consistent with the European Council's conclusions of March 1999 in Berlin and of December 2002 in Copenhagen. Payment appropriations have been reduced across the board by a total of EUR 150 million, which reflects the Council's view of the expected implementation rate and is based on past evidence of implementation shortfalls, taking full account of the significant and welcome improvements achieved recently. The reduction is applied to both structural funds and to Community initiatives.
I should like to begin by saying to Members that we, in the United Kingdom, have been very grateful and very touched by the messages of support and solidarity in the aftermath of the dreadful terrorist attacks in London. I believe we would all, on an occasion such as this, like to reiterate our determination, as the European Union, to tackle on an international level the scourge of modern terrorism as one of the greatest threats facing the world. I believe that the European Union has a major role to play in ensuring that we tackle head-on the menace of international terrorism. Once again, I thank you very much for the expressions of support and solidarity in relation to those attacks.
In heading 3, on internal policies, the Council accepted the amounts proposed in commitments for multiannual programmes adopted under the codecision procedure, as agreed following enlargement, as well as the specific amounts relating to Copenhagen commitments. However, the Council limited commitment appropriations for some budget lines that are not based on multiannual programmes such as those based on Commission prerogatives, pilot projects and preparatory actions.
Those decisions followed the Council's examinations of activity statements, which are fast becoming a very important analytical tool. In addition, the Council limited the increase of appropriation for the subsidies of certain decentralised agencies. It is right that established agencies should face the same budgetary rigour that we expect of central institutions and, indeed, of our own domestic organisations. However, it is also fair to allow more significant increases for new and developing agencies. The draft budget seeks to make that distinction.
In considering the level of payment appropriations for heading 3, Council took full account of the need to increase payments, especially for the important research lines that will help to underpin the very important – the central – Lisbon reform agenda.
However, the Council could not ignore the past implementation record for this heading. We suggest there is limited capacity to absorb increases effectively and efficiently. In this environment, the Council believes that it would be irresponsible to budget the huge increases proposed in the PDB of nearly 12% across that particular heading. The Council has reduced the overall increase to a more manageable and realistic 5%. But, very importantly, we should be aware that the draft budget still permits a very substantial increase – and I want to reiterate this – of nearly 12% for research lines, which reflects the priority accorded to this very important policy area.
The Council has provided adequate funding for heading 3 and established a sensible margin of EUR 210 million under the ceiling. I am sure that Parliament will want to keep the same budget discipline principles in mind when considering priorities for this heading.
I want to move now from heading 3 to heading 4: External actions. The Council was concerned to respect the ceilings of the Financial Perspective. Consistent with the Interinstitutional Agreement, the Council took the view that all possibilities for re-allocation must be exhausted prior to a proposal to deploy the flexibility instrument. You will not be surprised to hear that the Council did not share the Commission's view that re-allocation had been exhausted in the PDB. The Council fully supported the Community pledges and consequential budget proposals for the reconstruction needs in Tsunami-affected countries and in Iraq, and it respected the reference amounts for codecided programmes. It also accepted the amount for CFSP, as proposed in the PDB.
However, the Council took the view that there was still scope to bring total expenditure within the budget ceiling and achieved this by a very modest across-the-board reduction in commitments to the remaining chapters, including, for example, for international fisheries agreements. A slightly smaller reduction was applied to Afghanistan, which still allows the Community to meet its multiannual pledge for reconstruction assistance.
After these adjustments, the margin available under heading 4 is EUR 41.65 million, which should allow the financing of the consequences of the forthcoming sugar reforms along the lines we expect the Commission to propose. Again, we share a common belief that it is absolutely essential to make a success of sugar reform. I hope that we will be able to reach agreement on the final amount for the CFSP budget and the international fisheries agreements in the course of the second reading of the budget for 2006, as foreseen in the Interinstitutional Agreement. You can rest assured that we, the presidency, will make every effort to provide the appropriate information about CFSP to the European Parliament on time and in an appropriate form. I am sure you would agree that much progress has been made in recent times in relation to that particular issue.
Moving on now to heading 5, on administrative expenditure, the draft budget aims to respect the ceiling of the Financial Perspective once again and set an adequate margin for unforeseen events. With this in mind, the Council established a margin of EUR 130 million, to be achieved through savings in operating costs from interinstitutional cooperation and from budget reductions, to reflect the current vacancy rate for the various institutions. The Council's approach was objective and pragmatic, although we can never expect any institution to be entirely satisfied inevitably by the outcome of our analysis.
The Council accepted the vast majority of the new posts requested by the institutions for enlargement, pre-enlargement and new tasks. However, it is true that we applied a modest reduction to take account of the significant delay in recruitment for posts granted in previous years. The Council expressed deep concern about recruitment delays and about the need – the centrality – for there to be geographical balance following enlargement. I know that Parliament shares these concerns. It is regrettable that, due to time constraints, we could not agree a jointly-worded statement on this issue on 15 July, but I have every reason to believe that we can still reach such an agreement which would make it absolutely clear that Parliament and the Council are as one in terms of recruitment and retention, of human resource policies. We have recently received a paper from the Commissioner, which we will be considering over the next few weeks, to inform our position on the question of administration and more specifically of posts.
With regard to the budget, I should like to note the historical importance of the 2006 budgetary procedure. As the last procedure under the current Financial Perspective, it has a special role in bridging past priorities and future objectives. Of course it also needs to provide a measure of continuity and the basis for coherence between two financial perspectives, but it also must offer the prospect of reform and renewal so that future budgets can genuinely meet the needs and expectations of European citizens in the 21st century. That gives the two arms of the budgetary authority – Parliament and the Council – a very special responsibility. We will need to build on the spirit of cooperation that has developed between us to deliver in 2006 a budget that offers a shared vision for a better future.
Moving on now to heading 7, the pre-accession strategy, the Council accepted the commitment appropriations proposed by the Commission. However we limited the increase for payment appropriations for some budget lines, again taking into account past implementation rates.
Finally, as regards heading 8, on compensations, the Council accepted the full amounts proposed by the Commission in the PDB, which will help ensure that the conclusions of the Copenhagen European Council as regards new Member States are properly fulfilled.
We believe that this draft budget adequately responds to the European Union's various priorities, making the finances available, but it also respects the important principle of budgetary discipline and sound management of which we – the Council and Parliament – are joint custodians. We meet today in an environment where it is more important than ever that we rebuild, that we strengthen the relationship between the European Union, its institutions and the people of Europe.
Central to that relationship is the credibility of the way we do our business. Key to that credibility is the way that we manage our finances, to demonstrate that we are efficient, that we are prudent, but also that we jointly spend money in a way that adds value to the everyday quality of life of the people who live in the European Union. We have to close the gap between rhetoric and reality, because one of our great challenges – those of us who believe passionately in the importance of the European Union – is that often people do not see the work that is done in Parliament, the Commission, the Council as making any difference or being relevant to their everyday concerns about their quality of life and standard of living.
Therefore, it is very important, in the context not only of 2006 but also of the debate on the Financial Perspective for the years ahead, that we constantly have in mind the importance of linking our actions, our words and the decisions that we make with the centrality of making sure that we rebuild and strengthen public confidence and support in the whole function, the work and vision which underpins the European Union.
A very good place to start would be to reach in a mature way a consensual agreement on the 2006 budget. We have major challenges ahead, but we can bridge the gap on that issue – there are significant gaps in some of the budget headings, as we will hear in the debate this afternoon, and very strong differences of opinion about the best way forward.
However, I believe that in the next few weeks we should be seeking to bridge those gaps. We should be seeking to achieve some level of consensus, which will inevitably require compromise. If we can do that, it will be a very important building block in terms of the challenges which lie ahead, in terms of the necessary reforms to the way that we budget and make decisions about the future.
Many of you will have been present when the Prime Minister of the United Kingdom made his speech to Parliament very early on in the presidency. I think there was general agreement among everybody present – whatever their political ideology, whatever their views – as he outlined the reform agenda and his determination that we achieve that in partnership, that his was a fair analysis of where Europe is now and that now is the time to grasp the nettle and deal with some of the fundamental issues about the future nature of the European Union and its relationship with its citizens.
The 2006 budget may – in the context of that big-picture debate – feel like a relatively small issue. However, if we can reach some level of agreement, if we can show that we can achieve compromise in the interests of continuing progress in these areas, that will go down very well. It will be very well received by those who closely observe the way that we do our business.
I am pleased, Mr President, honourable Members, ladies and gentlemen, to close my remarks and to commend the draft budget to the European Parliament this afternoon.
Already, in the short period of time that I have been fulfilling these responsibilities, I value the relationship that I have been able to build with the chairman, rapporteur and members of the Committee on Budgets, and with the Commissioner. Whilst it is difficult at this stage of this sort of process realistically to reach any level of agreement, the atmosphere, environment and relationships that are being built are healthy and, hopefully, lay the foundations for a process that will lead to a mutually satisfactory conclusion.
To give to a wider audience today an example of the benefits of that cooperation, during the conciliation meeting between the Budget Council and a delegation from the European Parliament on 15 July, we were able to agree two very urgent matters: first, a strategy for financing a significant EC contribution to the rehabilitation and reconstruction of Tsunami-affected countries, and secondly, the mobilisation of the European Union Solidarity Fund in favour of Slovakia, to help with the effects of a severe wind storm. Those are practical, tangible and highly visible actions, important to all of the people that we represent, as well as to the victims of the Tsunami. In addition, we were able to reach an agreement on the revision of the Financial Perspective ceilings for 2006, to permit modulation in agriculture.
Today I acknowledge that, on the question of the Tsunami, there remains a EUR 13 million gap but, in the spirit of the cooperation and progress we were able to make back in July, I am still optimistic that we should be able to close that gap in a relatively short period of time.
This was a very promising beginning to our relationship. It gives me confidence that, if we retain a constructive and permanent dialogue, and with the assistance of the Commissioner, we will be able to find an appropriate agreement on a balanced and satisfactory budget for 2006 by the end of this budgetary procedure.
Before presenting in some detail the draft budget established by the Council on 15 July 2005, I would like to take this opportunity to recall the main principles which have guided our proposals. They are fully in line with the Council's budget guidelines for 2006 adopted in March of this year. I think it is very important that we are clear about the priorities and principles which lead and guide the financial decisions. That is as relevant in the context of 2006 as it is in any debate about future funding in terms of the next Financial Perspective. It is important that we are absolutely clear about the principles, the policies and the challenges which lie ahead for the European Union.
First of all, the draft budget established by the Council shows due regard for the current Interinstitutional Agreement of 1999 on budgetary discipline and improvement of the budgetary procedure. This is a point which is worth repeating."@en1
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