Presentation by the Council of the draft general budget for the 2010 financial year (debate) 
President
The next item is the presentation by the Council of the draft general budget for the 2010 financial year.
Hans Lindblad
Mr President, it is a tremendous privilege for me to be here today. It makes me feel very humble and I am delighted to have the chance to present the Council's draft general budget to you.
Europe is facing considerable challenges. The economic situation looked significantly more worrying six months ago, but it seems to have stabilised. The risk scenario is more balanced and the risk of being drawn deeper into a downward spiral has reduced.
However, we face significant problems in the form of rising unemployment, growing budgetary deficits and increasing debt. In the light of this, there is a great need to maintain public finances that are sustainable in the long term. Many countries have a long way to go to balance their public finances.
Demographics will exert huge pressure on public finances. The challenges we face with regard to the climate will require new resources and the redistribution of existing resources. Overall, this means, in our opinion, that the budget that we are to agree on should reflect a high degree of restraint in order to leave room for future needs, with the emphasis on European added value and investments which, in the short term, can bring us out of the economic crisis and, in the long term, can also strengthen our competitiveness.
The Council's draft, which was adopted unanimously, deals with and contributes to meeting these challenges. It is a disciplined budget and a sound one from the point of view of state finances. It will promote research, education, competitiveness, innovation and the building of infrastructures, and it will promote cohesion. The Council's draft also contains margins for coping with unforeseen events.
The logic behind our draft general budget is quite simple. If we want to stimulate growth, employment and prosperity, the textbooks say that we should pursue a sustainable, credible and cautious policy, but with investment in education, research and infrastructure and in levelling out wage differences throughout the EU. This is precisely what we have attempted to do.
The Council's draft is balanced, while still being ambitious. Compared with the 2009 budget, our commitments have increased by 1.1% and the payment appropriations by nearly 4%. Our draft and the agreement that we want to reach must meet the following fundamental requirements, which were also applied during the Council's first reading. The budget must ensure that the EU's various political priorities for 2010 are adequately financed. We in the EU must be able to react quickly to the challenges that await us. There must be an emphasis on providing European added value. Budgetary discipline and sound economic management are required. Otherwise, we will not be able to take the gradual steps towards balancing public finances once again.
It is important to respect the ceilings. The EU must have sufficient flexibility to cope with future needs and unforeseen events. It is vital for the EU budget to have adequate margins. The draft general budget that we are tabling represents EUR 138 billion in commitment appropriations and EUR 121 billion in payment appropriations. The reductions that the Council has made in relation to the preliminary draft budget presented by the Commission are based on a detailed analysis of the budget implementation, the budget forecast alerts and activity declarations, and we are looking at the capacity available to implement programmes and measures. The degree of implementation and the absorption capacity have been key factors in our analysis.
I will now take a brief look at the individual headings. Sub-heading 1A, research and innovation, is the most important element, and adequate funds have been secured in our draft budget. Another area to which more resources will be directed is projects within the energy and infrastructure sectors. If we adjust for the accounting effects of the economic recovery plan, the increase in this area amounts to around 8%. Eight percent! That is a lot, and as you all know, the financing of the European Economic Recovery Plan will be one of those topics that we will need to discuss during the autumn.
Under sub-heading 1B, the Council accepted the commitment appropriations proposed by the Commission. As regards payments, the Council believes that certain reductions can be made in relation to the preliminary draft budget, but I would like to stress that our draft nevertheless represents an increase in payment appropriations of 3.2% compared to 2009.
Under heading 2, the Council is proposing substantial increases with regard to both commitment appropriations and payment appropriations compared with 2009, by 4.5% and 9.5%, respectively, if we adjust for the accounting effects of the recovery plan.
With regard to heading 3, the Council made only a few small adjustments to the Commission's preliminary draft budget. Sufficient resources will be available for migration policy, including Frontex.
As regards heading 4, it is extremely important to leave a substantial margin to the ceiling under this heading in order to be able to cope with unforeseen needs in the best possible way. The Council therefore secured a margin of around EUR 310 million in its first reading. This is particularly justified in light of the letter of amendment, which includes additional needs in this area. As regards the Emergency Aid Reserve, the Council accepted the Commission's proposal regarding commitment appropriations. The common foreign and security policy is increasing in importance and the Council will therefore ensure that adequate funds are available for this.
With regard to administration, the Council made certain targeted reductions in view of the economic situation and the specificities of each institution. The aim is to ensure that administrative expenditure does not increase faster than inflation. The institutions' requests for additional posts for new activities were not accepted, except for the new agencies that are planned for 2010 and for Frontex.
At our conciliation meeting in July, it was highlighted once again how important it is for the recruitment associated with the enlargements of 2004 and 2007 to be carried out, and we agreed on a joint statement. On the same occasion, your representatives indicated that they were willing to try to find a common approach in respect of the building policy of the EU institutions and bodies. I am sure that such a statement will, fortunately, be forthcoming later in the autumn.
Before I close, I would like to mention, and indeed to emphasise, the positive atmosphere that prevailed in our meetings with the European Parliament. I believe that constructive cooperation is the only way to achieve a sound budget.
Algirdas Šemeta
Member of the Commission. - Mr President, it is a great pleasure for me to have an opportunity to speak to you this morning. I know that the first stages of this budgetary procedure - in particular the July conciliation - took place in a very positive atmosphere, and I hope we can build on this cooperation in the coming weeks. We still have some way to go in the 2010 budget procedures, and there are other important issues to agree on, such as the second phase of the European Economic Recovery Plan, so it is crucial that all three institutions work closely together.
Turning to the actual situation following the Council's first reading and the establishment of the draft budget for 2010, the Commission acknowledges that the cuts proposed by the Council are less severe than in previous years. However, there are some particular concerns which I would like to highlight. The Commission regrets the Council's cut of EUR 1.8 billion in payment appropriations. These cuts are proportionately more significant for Headings 1A and 4, and sent a negative message in the priority areas of growth in jobs and the EU's international role, not least in relation to pre-accession assistance.
The cuts proposed to the administrative support expenditure allowance, the administrative allowance for research and the agencies are particularly harsh. Rather than taking into account the specific situation of each agency, the cuts - with few exceptions - have been general, regardless of the stage of development or tasks of the agency concerned. The cuts in administrative support expenditure will hamper the implementation of programmes, particularly in the field of research and for external actions. I am hopeful that, in preparing its first reading, Parliament will seek to redress this situation.
Although the cuts in Headings 1B and 2 are regrettable, I am partly reassured by the Council's proposed declaration on payments and by the second opportunity to examine the needs for agriculture in the upcoming letter of amendment which the Commission will present at the end of October.
As announced, the Commission has now presented the budgetary authority with an amending letter to update the needs for Heading 4. The key elements of this concern: an additional EUR 95 million in commitment and EUR 60 million in payment appropriations to support the Palestinian Authority and reconstruction efforts in Gaza; and the need to consider the establishment of Bananas Accompanying Measures in view of the possible trade agreement that will affect the preferential regime of ACP banana-supplying countries. There is also an additional EUR 50 million in commitment appropriations and EUR 20 million in payment appropriations to assist developing countries in combating climate change, which should help to promote a successful outcome to the December Copenhagen Climate Change Conference.
Under Heading 5 (Administration), the Commission was particularly modest in its PDB requests with a proposed increase in the Commission's administrative expenditure of only 0.9% compared to 2009. While this point has been acknowledged by the Presidency, it is rather disappointing that the Council has introduced further cuts to the Commission's administrative budget.
In conclusion I am hopeful that the European Parliament will restore the appropriations cut by the Council and I am confident that our ongoing negotiations between the three institutions will be constructive and that we will achieve a satisfactory outcome to this budget procedure.
President
Thank you, Mr Šemeta, for presenting the position of the Commission, and also for keeping to time, which is very important. I would like to say that this is an initial discussion. We are now going to discuss this in the Committee on Budgets and in other committees, and the main discussion will take place in a few weeks.
László Surján
I am going to speak in my mother tongue because I am hoping for a Europe where this act is a natural right in every parliament, not to mention in other areas of public life as well. In that Europe, there is no law preventing anyone from using their mother tongue, not even in Slovakia. I also expected that the current financial crisis would not only reduce production and increase unemployment, but also provide us with an opportunity to improve the European Union's budget through reform measures.
Parliament already expressed its point of view in February. It was encouraging that the European Commission and Council expressed their agreement with it. Based on what I know about the draft, I am sad to say that the attempt to translate the fine words into the language of numbers was not a complete success. It is time to face up to the fact that no one is happy with the European Union's budget. The budget's revenue side is a serious burden for Member States, but the sum available is not sufficient for them to achieve their objectives. We are far away from achieving both full employment and a knowledge-based society. We spend large sums on agriculture, but dairy farmers, for instance, are affected by an unmanageable crisis. The biggest item on the expenditure side is the cohesion policy, but the gaps between regions are growing instead of decreasing.
Researchers born and trained in Europe are working outside the European Union. We are therefore lagging behind when it comes to innovation as well. We hoped that the crisis would also provide an opportunity for us to have a shake-up and make the European Union's budget more successful and tangible for its citizens. We also hoped to use the budget not only in compliance with the rules and without any corruption, but also to take a look at the expenses and consider which programmes actually provide value and success for our money.
What can we do now? Parliament will endeavour to shape the budget in such a way that its message will be clearer to the EU's citizens. We want to increase those items which help tackle the crisis. With this in mind, we are putting forward our thoughts on implementing the economic stimulus plan. We want to tackle head on the challenges posed by climate change as well. What we would like is for the financial crisis to be tackled effectively, not only using a couple of billion euros from the plan earmarked for this purpose, but also with every item in the budget, so that Europeans realise that the European Union is not a superfluous expense, but an effective tool for solving their problems. I call on my fellow Members, the Council and Commission to support this.
Vladimír Maňka
Mr President, Secretary of State, Commissioner, we can surely agree that when drawing up the European Parliament's budget, we must focus on our core mission, which is legislative work. Issues unconnected with this must be excluded from the budget as much as possible.
We will discuss the final form of the budget today in an arbitration process involving the Presidency of the European Parliament and the Committee on Budgets. At this point, I would like to thank the representatives of the political groupings. In the meeting of the Committee on Budgets yesterday, they backed proposals to reduce the budget and measures which will lead to the better use of financial resources.
We are constantly confronted with numerous shortcomings that prevent us from using our resources in a fully efficient manner. One example of this is the security for the buildings in which we are conducting these debates today. As you know, we spend four days a month in Strasbourg. Despite this, there were security guards stationed at both entrances 365 days a year until recently. The new Secretary General of the European Parliament and his colleagues discovered this and implemented measures which will bring annual savings of more than EUR 2 million.
Another example is the Court of Auditors' reports on translations. Insufficient planning and insufficient communication or a complete absence of communication regarding the availability of translation resources prevents these resources being used effectively. The organisation which is supposed to provide translations often instructs external translators automatically without even checking whether there is any spare capacity available in the internal organisation.
It is for this reason that we are proposing a reserve of 5% against the resources earmarked for translation in the budgets of the various institutions. We shall release this reserve when they show that they have tried to make full use of the resources of the internal organisation. In the area of translations alone, we can save around EUR 11 million annually.
There are many similar examples. Most of them have a common denominator: we are making little use of independent studies into the use of resources and the organisation of work. I believe that the political will shown yesterday by the representatives of the various political groupings in the discussions of the Committee on Budgets will bear fruit.
Expenses for the purchase, upkeep and rental of buildings form one of the main administrative expense items of EU institutions. There have been various cases in the past where institutions have purchased or rented property using methods that were not entirely efficient. According to the Court of Auditors, the institutions do not cooperate in these areas or even fail to assess their own policies.
We have therefore asked the European Parliament administration to draw up a medium-term strategic document on buildings. We wanted to adopt a sensible decision on this matter in the first reading. There is a need to draw up a joint policy on buildings, not only in the European Parliament, but also within the framework of all institutions, and to ensure better cooperation in this area. Secretary of State, I am delighted that, like us, the Council has adopted this as a priority objective and I would like to express my thanks for that.
Alain Lamassoure
Mr President, may I first of all congratulate Mr Šemeta on the confirmation obtained yesterday of his appointment as Commissioner responsible for the budget.
We are convinced that we will enjoy the same quality of relations with him as those which we established with his predecessor, and we wish him a political career that is as brilliant as that of Mrs Grybauskaitė.
Mr President, we are going through a period of global crisis, of preparation for major diplomatic events and of institutional uncertainty within the Union itself. In a period such as this, the Committee on Budgets will seek to adopt a cooperative attitude. As our rapporteur said, we regret the cuts made by the Council in the Commission's proposals but, at the same time, we understand that the state of the Member States' public finances prevents them from going much further this year.
For the 2010 budget, as has been said, we have an obligation to produce results: namely, balancing the financing of the 2010 section of the recovery plan. We know that redeployments will be necessary, but they must not focus on other political priorities previously decided on together by Parliament and by the Council.
Beyond 2010, Parliament will hope to undertake work jointly with the Commission, the Council, the Swedish Presidency and the future Spanish Presidency on three major issues for the future.
If, of course, things turn out as we hope in Ireland, the first issue will be the implementation of the procedure, schedule and working methods required by the application of the Treaty of Lisbon.
The second issue will be the mid-term review of the financial perspective. Between the joint decision on the multiannual financial framework taken in May 2006 and now, there has been the financial crisis, the very strong pressures on the price of energy, raw materials and even foodstuffs, and the negotiations on climate change. There has also been - I am sorry to say - the failure of the Lisbon Strategy, as is plain to see today. It is therefore a thorough review of our multiannual guidelines that we need. This will be the first task of the new Commission.
Lastly, the third and final issue will be the reform of the resources that make up the European budget. We knew before the crisis that none of the Member States wanted to pay for Europe's spending any more. Since the crisis, none of the Member States can pay for this spending any more. Our financial contribution to the economic recovery will represent scarcely 0.03% of the Union's GDP.
We are fully aware of the extreme difficulty of the issue, but the European Parliament started work on it four years ago with the national parliaments, and it intends to put itself in a position to propose some areas of work so as to launch the debate next year.
Hans Lindblad
Mr President, we have heard from both the Commission and the European Parliament that we will have several difficult issues to deal with during the autumn. Hopefully, we will have some easy ones to deal with, too. One of the most difficult issues is going to be the recovery plan and how it is to be financed. At the same time, I am very hopeful that we will succeed. I know that we will succeed. There is no alternative.
Another issue that we face, both in the short term and in the long term, is, of course, the climate and the financing of climate policy.
Finally, I would like to take the opportunity to thank you for allowing me to speak here today.
President
The debate is closed.
I would like to congratulate the Commissioner on his appointment. Commissioner, great careers await commissioners from Lithuania. We wish you much success, both in the Commission and in the future. Your predecessor is, today, the Head of State in Lithuania.
