Presentation by the Council of the draft general budget - Budget 2008
President
(DE) The next item on the agenda is the presentation by the Council of the draft general budget for 2008.
Emanuel Santos
President-in-Office of the Council. - (PT) Mr President, ladies and gentlemen, I have the honour to present, on behalf of the Presidency of the Council, the draft general budget of the European Communities for the financial year 2008, adopted by the Council on 13 July 2007.
I should like, first of all, to record the excellent and constructive atmosphere that prevailed during the meetings preceding the first reading of the 2008 budget by the Council. The conciliation meeting produced a significant result, namely agreement on five joint statements on important subjects, providing a good basis for future work.
In this respect, I am convinced that the excellent cooperation between the two branches of the budgetary authority, with the valuable assistance of the Commission, augurs a positive outcome. I can assure you that the Council is keen to continue the constructive dialogue on the budget in order to reach a satisfactory agreement on a good Community budget for 2008.
In March 2007 we celebrated the 50th Anniversary of the Treaties of Rome and reaffirmed our common values and objectives. In the dynamic project that is the European Union, the European Union budget like the single currency is one of the most tangible expressions of what it means, for the European citizen and taxpayer, to be European. The European Union budget must therefore be drawn up in the light of the challenges we face together. There are various challenges but I will, if I may, draw attention to some which I consider to be more important. First, the challenge of eliminating the barriers to entrepreneurship in order to create a dynamic European economy based on the Lisbon Strategy. Another challenge is to create a trans-European transport network to bring us closer to one another and consolidate the internal European market. The challenge of an information society shows the importance of human resources and social inclusion.
The European Union will derive greater strength from the enlightened participation of its citizens in this project, unique in modern history. The latest challenge, affecting some regions in particular - the challenge of climate change - must be met by developing renewable sources of energy and by more efficient and socially responsible use of natural resources.
All these challenges arise in the context of the globalisation of the world economy, which presents a serious challenge for our old continent of Europe, a challenge we must meet at an economic and social level with policies that will increase the productivity of the European economy and strengthen social cohesion. This is what all Europeans expect of our government. We must all redouble our efforts to ensure that our budgets represent an effective and efficient response to the political priorities.
It is therefore necessary for us to reduce the administrative burdens, concerns shared by the Council and the European Parliament, and for the Commission to speed up the process of approving operational programmes and projects so as to avoid delays in execution. More rapid approval must not, however, call into question the principles of good budgetary management. It is true that we need greater flexibility but not at the cost of abandoning the efficient and responsible use of the European taxpayers' money.
Before presenting the draft budget for 2008 in more detail, I should like to record the guiding principles behind the Council's decision. The essential elements, in brief, were appropriate funding for the various European Union priorities; a carefully controlled increase in payment appropriations; compliance with the current ceilings of the financial framework leaving, where necessary, sufficient margins below the ceilings for the various headings and sub-headings; and lastly financial discipline and good budgetary management.
I will, if I may, mention just one detail. In order to complete its analysis of the preliminary draft budget, the Council employed a combination of budgetary tools which proved to be extremely useful and which were developed in the context of budgeting for objectives and activities. Among them, I should like to draw attention to the activity planning forms, where the Council considers, after examining a number of them in depth, that the overall quality of the process has improved significantly and hopes that this budgetary approach will be developed further in the future.
The draft budget for 2008 amounts to EUR 128 000 million in commitment appropriations and EUR 119 000 million in payment appropriations. As regards commitments, I should remind you that the Council considers it essential that these reach an appropriate overall level in the 2008 budget, with due regard to the capacities for absorption. As you know, we consider that overestimating payment appropriations is not a solution for unpaid commitments, the Reste à liquider. One of our guiding principles was therefore to assess the needs - real and clearly defined needs - and this resulted in an increase in payments of 3.4% compared with the 2007 budget.
As regards sub-heading 1a - Competitiveness for growth and employment - the Council intends to provide for appropriate funding of priorities connected with the Lisbon Strategy, having left a significant margin to cover the European Union priorities defined in the conclusions of the June European Council, as well as other so far unforeseen needs. Although the Council intends to limit increases under this sub-heading in comparison with the 2007 budget, I should point out that the Council will continue to provide for a very significant increase in the Research budget, i.e. 7.75% in commitments and 45% in payments, in the light of the rate of execution in previous years and the capacities for absorption. This increase reflects the great importance that the Council attaches to efficient implementation of the Lisbon Strategy which, as I have already mentioned, is an essential element in the economic development of the European Union.
As regards sub-heading 1b - Cohesion for growth and employment - the Council intends to accept the commitment appropriations proposed by the Commission in its preliminary draft budget. With regard to the payment appropriations, I should like to emphasise that the proposed increase has been maintained at an even more significant level, i.e. 6.2%, taking into account the capacities for absorption and past experience with the completion of old programmes and the execution of new ones.
As regards heading 2 - Preservation and management of natural resources - the appropriations proposed by the Council were based on earlier results and past experience has shown that, despite being applied horizontally, these appropriations are generally speaking always very close to the figures for the final execution.
I should like to expand on some considerations concerning the approval of operational programmes and projects in the areas of rural development and the Structural and Cohesion Funds for the period 2007-2013. This was the subject of a joint statement which we approved at our conciliation meeting and I can assure you that the Council attaches the greatest political importance to ensuring that all operational programmes and projects are executed as rapidly as possible and in an appropriate manner.
As to headings 3a and 3b - Citizenship, freedom, security and justice - the Council intends to make only one slight adjustment to the commitment and payment appropriations in accordance with the capacities for absorption and the prior rate of execution.
As regards heading 4 - The EU as a global partner - the Council intends to include some priorities with a political bearing in its draft budget. I refer to Palestine, for which an increase of EUR 80 million is proposed, in reserve, and Kosovo, for which an increase of EUR 180 million is proposed, likewise in reserve. We are still in the first stage of the budgetary process and I am sure we shall have further opportunities to give more precise figures in this connection.
At the present stage, the Council intends, so far as it is concerned, to accept the Common Foreign and Security Policy budget proposed in the preliminary draft budget as representing a provisional minimum. However, it is highly probable that the amount proposed for the Common Foreign and Security Policy budget will prove to be insufficient in the light of developments in the international situation. I think we all understand what is at stake.
I should like to end my explanatory statement with a few words about heading 5 - Administration. The Council's approach is based on horizontal criteria such as increased efficiency and, at the same time, on the specific nature of each institution, especially in terms of the provision of new posts in connection with enlargement. For its own section of the budget, the Council intends to provide an increase of only 0.2%, which seems to me to represent a clear political signal.
A detailed analysis of the budgets of the decentralised agencies was also carried out. A method based on horizontal criteria was used both on subsidies and with regard to the number of new posts to be approved.
I also take this opportunity to say a few words about the need to ensure sound financial management of the European Union institutions. In this connection, the Council is delighted with the joint statements which we approved at the conciliation meeting and which raise questions such as decentralised agencies, executive agencies, assigned revenues and recruitment in connection with the latest enlargements.
We all know that this is only the first step in the budgetary process, but I have every confidence that together we shall be able to explore all the possibilities in order to reach a final agreement and produce a satisfactory budget at the end of the year.
Our principal objective is to have at our disposal in due course a budget for 2008 that will be adequate for the purpose of the Union's political priorities but that is not excessively large, because that would signify acquiescence in a probable failure to execute it effectively and efficiently. We must bear in mind not only that this budget will affect the well-being of each and every citizen of the Union but also that it is the taxpayers of each and every Member State who foot the bill. Hence the need to strike the right balance. I am sure that the three institutions represented here today will make every effort to do so.
Mr President, ladies and gentlemen, thank you very much for your kind attention.
Kyösti Virrankoski  
rapporteur. - (FI) Mr President, President-in-Office of the Council, Commissioner, the European Parliament has now to deliberate upon the Council's proposal for next year's budget. Right at the start I wish to thank the country holding the presidency, Portugal, for its excellent and transparent cooperation. It has worked splendidly in collaboration with the European Parliament and its Committee on Budgets, in particular. The debate has gone extremely smoothly. Although the Council's proposal gives cause for comment, the work of the Presidency gives us good reason to assume that we will achieve an excellent end result.
The Council's budget proposal is a frugal one. Compared to the preliminary draft budget, commitment appropriations have been cut by EUR 717 million, with the margin for the multiannual financial framework at EUR 3.9 billion. Payment appropriations have come in for an even bigger cut, having been reduced by EUR 2.1 billion, meaning they are a good EUR 10.3 billion under the financial framework, which is to say just 95% of the EU's GNI. When we recall how, after long and hard talks, the financial framework was adopted only a year ago, we have to regard the level of payment appropriations, and these especially, as unrealistically low.
It is regrettable that budget headings 1a (competitiveness for growth and employment) and 1b (cohesion for growth and employment) should have been made the target of particularly drastic cuts. In the first case payment appropriations have been reduced by more than EUR 500 million and in the second by EUR 498 million. Both of these headings concern a key priority of the European Union, the Lisbon Strategy, one now made weaker by a cut of more than a billion euros.
There are also fundamental problems for the budget in connection with heading 1. Last year the European Parliament warned the Council that financing for the European Galileo navigation system was too inadequate. Now there is a shortfall of EUR 2.4 billion, because the private sector did not get involved. Under its resolution, the European Parliament is supporting a project using Community funds coming out of the Union's budget. This is the simplest procedure, the least bureaucratic and the most democratic. Such a huge sum of money, EUR 400 million a year, is nevertheless impossible to find, given the current financial framework, and so we need a joint decision by Parliament and the Council. We can rescue this important European project, but it will have to be done in the context of this budget procedure.
Another problem is the European Institute of Technology, the EIT. If we do want to set it up it will have to be financed sustainably. It cannot be based on hopes and assumptions, but needs realistic decisions. The idea that the EIT would almost certainly receive cash out of EU programmes based on free competition is just a dream. What if it were to come true, though? That is why we need realistic solutions.
There is a special problem concerning next year's budget, and that relates to the Structural Funds, the Cohesion Fund and rural development funds. Only a few of the Structural Funds' Operational Programmes have been approved. Just 20% of the 335 Programmes under the European Regional Development Fund and Cohesion Fund have been approved, but the figure for the European Social Fund is just less than 10%. Most worrying is the situation concerning the Rural Development Fund, where just two of the 96 Programmes have been approved. In June the European Parliament and the Council adopted a declaration which focuses attention on this, and they promised to monitor the Commission's actions here. Parliament for its own part promises to enforce this declaration.
Finally, I want to emphasise the importance of good management. The European Parliament wants to promote activity-based management and budgeting. We, together with the Council, passed a declaration which stresses the importance of a cost-benefit analysis and accountability when new agencies are being set up. We need to insist on this.
The theme of next year's budget is the Budget for Results. The purpose is to emphasise the notion that it is the appropriations that need to be used to achieve the desired results. Management is not the main issue here: it is results. I firmly believe that we, along with the Council and the Commission, will succeed in establishing such a budget for next year.
President
Thank you very much, Mr Virrankoski, and thank you too for observing the speaking time so scrupulously. It would seem that the Finns have everything well under control here. Representatives from smaller countries such as Finland, just like those from larger states, are capable of exerting great influence. Our other rapporteur is also a Finn: you have the floor, Mr Itälä.
Ville Itälä  
rapporteur. - (FI) Mr President, the most important principles to be observed when Parliament and other institutions were drafting next year's budget were thrift and budgetary discipline. We have to set an example to the taxpayer, the ordinary European citizen, and show that we can also take responsibility for economic matters. This is the only way we can win the trust of the people.
Parliament's new Secretary-General has put forward a new proposal for Parliament's 2008 budget, and I would like to congratulate him, since it is extremely good and well-balanced. It will help us find a compromise when taking the final decision. I should mention two things concerning the proposal. Firstly, the Secretary-General's proposal is still below 20% of heading 5, i.e. the increase does not use up the whole 20%. The other important matter is that he has been able to place a lot of existing employees in new posts, whereas all the posts should have been made vacant.
We nevertheless have to remember what this process in Parliament is like generally. We have already adopted certain principles here a few times this year. One is that Parliament's budget is a taxpayer's budget, and that we would try to keep to the 2007 expenditure levels where new projects are concerned. We are not so very far off this target, and I believe that all the projects proposed can be carried out when we determine the precise sums in accordance with budgetary discipline.
I wish to raise another matter concerning Parliament's budget, and that has to do with information policy. Various projects have been set up with a view to the forthcoming elections, such as the Web TV, and the most important thing of all is for MEPs and the political groups to be closely involved in all aspects of Parliament's information policy. So the groups and Members must keep themselves in the picture and not leave the administration in charge of information policy: people want to know why an individual member or group votes a certain way or puts forward given proposals. People want to know the political background, and we should therefore be involved. I hope that the idea about inviting the small, local media along, as now agreed, goes through to the final version. One way to get close to the people is for us to invite along the small, local media, which do not have the funds themselves to come here to Parliament. This obviously has to happen through our Members.
I would like to come back again to the other institutions. The Council has proposed a 2% cut across the board for all institutions. As rapporteur, I have to say this is difficult to accept, as the institutions differ greatly from one another. Some are small, some large, and they vary in the sort of work they do.
Let me take as an example the Court of Auditors, which I visited yesterday. They have been very economical and have complied with budgetary discipline for many years now. They have posted a surplus for everything, they have not wasted money, and their expenditure consists of salaries and fixed costs, and nothing else. This 2% cut would be completely out of the question for the Court of Auditors. The whole scheme would fall apart if we were to go with it.
I hope we will reach agreement on the idea of going over possible areas where savings can be made for each individual institution. In principle I agree with the Council that everyone needs to exercise thrift and areas where savings can be made have to be found, but I am not in favour of a universal 2% policy.
Reimer Böge  
Chairman of the Committee on Budgets. - (DE) Mr President, ladies and gentleman, what we are discussing today is the second year's implementation of the agreed Financial Perspective; we are discussing implementation of multiannual programmes with European added value as determined in codecision; and we are discussing additional commitments to reform by all three institutions. I should like to assure the Council Presidency that a promising start was made, in terms of basic agreements, with the tripartite dialogue and the conciliation procedure on 13 July. The five statements to which you referred, particularly concerning how we deal with the decentralised agencies, are a move in the right direction and one on which I hope we can build.
I should also like to tell you, Commissioner, that your initiative for a two-stage presentation on implementation of the budget is another important step in the interests of efficient budgetary policy on the part of both the Commission and the European Parliament.
Obviously, what we have to do now, in this budgetary procedure on the basis of the Council's draft, is to ensure budget discipline and to safeguard commitments already entered into, but of course we also have to adjust the foreseeable and anticipated figures. In that regard, I do not understand what the Council has said in its additional statement in relation to the sub-headings on growth and employment (1a) and on agricultural policy and market-related expenditure - namely that if the amounts are insufficient, the Commission must be asked to submit an amending budget. Heading 4, foreign policy, has to be highlighted yet again as chronically under-financed. I must point out, too, that in the negotiations on the Financial Perspective we flagged up these shortfalls right from the outset.
So we shall work to ensure that agreed programmes are properly implemented in terms of both commitments and payments. At the same time - and let me make this quite clear - we shall not accept any shelving of our political priorities either in the current budgetary procedure, Commissioner, or indeed through major global transfers at the end of a budget year.
I want to say explicitly that the statement on implementation of the Structural Funds and rural development was important for us, and we would ask the Commission to submit a progress report as soon as possible because the Member States and the regions quite rightly expect to see the programmes in question here implemented without delay.
Taken overall, the statements concerning the decentralised agencies, advocating improved cost-benefit analysis, make for greater transparency and greater clarity about the staff actually employed there - whether permanently or temporarily - and they constitute a qualitative step forward which, in conjunction with the Commission's so-called 'screening report' on establishment plans, amounts to positive progress and must be further developed, studied and more thoroughly pursued. The watchword in this regard, I would add, should be prudence as opposed to over-reaction.
Of course, much of what we currently complain about in relation to decentralisation or the rules for implementing the Financial Regulation results from Community decisions, for which we all bear our share of responsibility. The solution is a familiar one and it entails slimming down procedures and simplifying them to some extent. In that regard, there remains a great deal of work to be done.
Allow me to say something here on two or three key points. The figure for payments in the Commission's preliminary draft was EUR 8.2 billion less than the ceiling in the Financial Perspective. Now the Council has submitted a draft with a figure EUR 10.3 billion below the ceiling. If you look at the Council's summary table, however, you will find that the content is highly questionable. Under the heading for the Lisbon Strategy, growth and employment, for example, the fact of creating a new EUR 342 million margin, and reducing the payments by EUR 548 million from the figure in the preliminary draft, effectively amounts to making an artificial margin to accommodate the European Council's pronouncements on political priorities.
I assume that the underlying issues are the problem of financing the European Institute of Technology and the problem of financing the Galileo project. Let me be very clear here: Parliament firmly favours a Community solution for the Galileo project and, in the overall context, awaits new proposals from the Commission.
I have one brief comment on Heading 3: in relation to natural disasters, what has happened to former Commissioner Michel Barnier's proposals on civil defence in Europe? Do we have a joint response and, if so, how might it impact on the 2008 and subsequent budgets?
Mr President, the foreign and security policy issues, to which we have referred repeatedly, confirm that our political analyses were correct: the current figures in the draft budget are insufficient to address the challenges in Afghanistan, Palestine or Kosovo, and cutting the Emergency Aid Reserve is merely a virtual solution, the point of which we cannot grasp. In this regard, we would ask the Commission to state clearly what, from its perspective, lies in store for us in the coming years.
I have one final point, Mr President. The Member States undertook - and I quote here - referring to the Statement of Assurance mentioned in paragraph 44 of the Interinstitutional Agreement: 'to produce an annual summary at the appropriate level of the available audits and declarations'.
'to produce an annual summary at the appropriate level of the available audits and declarations'.
I say this very much in earnest: those Member States not in a position to guarantee that the annual report will arrive in good time may expect us to take issue with them on this matter on budgetary as well as other grounds. Otherwise, I fully support what our two rapporteurs have said.
Dalia Grybauskaitė
I would like to welcome everyone to the new season, which seems interesting and intensive as always. It is so gratifying that already in July we achieved some very productive and well-intentioned communication. In Lithuania it is said that a good start is half the job. Therefore, I hope that the atmosphere in which we have started working and the results that we have already managed to achieve by negotiating and adopting three important declarations is a really good start to the task at hand. Today we discussed the first version of the Council's budget, although I very often hear from Parliament that we - the Commission - are given so many tasks. I certainly accept this and agree with it; we are ready to react and provide any information that is required.
As regards the first draft of the Council budget, I would like to mention that the Commission, when it presented its version, referred to the forecasts of the Member States using our analysis. We therefore believe that our proposal was fully economically and politically sound. Therefore, the Commission cannot fully agree with many aspects of the Council's first negotiated budget. Certainly, we agree with the opinion already presented by MEPs that the biggest horizontal cuts... I would like to repeat that the method of horizontal cutting was applied again in all categories. The Commission, certainly, considers that this approach and methodology is unsound, particularly in categories 1a and 1b, where we talk about innovation and research, even more so as we have an additional problem with the European Institute of Technology and the Galileo programme, which has to be solved as an additional parallel problem of the annual European budget procedures. Certainly, this means that it is necessary to return to discussions on quantities and sizes and not to consider arithmetical reductions. The same applies to agriculture and the category of foreign affairs policy where, in my opinion, the Council's approach of putting funds in reserve is rather conservative and, surely, we will all have to return to it soon. Over the coming fortnight the Commission will be presenting its proposal to Parliament and the Council on the adjustment of the budget as regards Kosovo and Palestine.
Certainly, as always, we worry about the Council's approach to administrative expenditure and I agree that the budget has a certain Finnish colouring, especially in the European Parliament. I mean this in a good sense, because I see the need for discipline, strict responsibility and soundness in the expenditure of the country representatives and we accept this and will always respond to it. The Council's proposal includes the horizontal cut in the conditions in which the Council itself will not be able to fulfil its commitment to employ extra people; more than 800 staff members to perform additional developmental tasks surely cannot be acceptable to the Commission. We really expect Parliament to have the same attitude towards this issue as we do and hope that the re-adjustment will be made jointly with Parliament. Briefly speaking, therefore, it is gratifying that the beginning has been successful. Yet we react critically to the Council's first proposal and assess it critically, and we are ready to discuss Kosovo and Palestine in the short term and also to discuss and take decisions on the proposals on the Galileo programme and the European Institute of Technology on around the 19th and will try to come to a mutual understanding on these important issues. I therefore hope for a successful procedure and hope that my fellow Lithuanians manage to translate my first Lithuanian speech well and correctly.
President
(DE) The debate is closed.
Written statements (Rule 142)
Silvia-Adriana Ţicău  
in writing. - (RO) The Lisbon Strategy requires that 3% of the Member States' GDP should be invested in research, two thirds originating from the private sector.
Only a very small number of European regions reached this goal. In 2004, 42% of European companies carried out research on their activities and Member States invested only 1.84% of their GDP on research. In 2006, 35% of the EU active population worked in the field of science and technology.
Education is essential for the future of the EU. It should be accessible to everybody, either rich or poor, living in either the urban or rural environment. The quality of European education should be measured depending on the graduation rate and the admission rate to the next education level. We need a new Social Europe, in which its citizens should have priority.
Having regard to the fact that both the European Union and its Member States will approve their budgets for 2008 in the autumn, I require that the investments in education and research have priority in the European Union.
