REPORT on the proposal for an Interinstitutional Agreement between the European Parliament, the Council and the European Commission on provisions regarding financing of the Common Foreign and Security Policy

15 July 1997

Committee on Budgets
Rapporteur: Mr Detlev Samland

By letter of 27 June 1997 the President of the European Parliament invited the Committee on Budgets to submit a report to Parliament on the proposal for an Interinstitutional Agreement between the European Parliament, the Council and the European Commission on provisions regarding financing of the Common Foreign and Security Policy, as provisionally approved in the Draft Amsterdam Treaty text of 19 June 1997 and asked the Committee on Institutional Affairs to deliver an opinion, announced in plenary on 15 July 1997 .

At its meeting of 14 July 1997 the Committee on Budgets appointed Mr Detlev Samland rapporteur.

At its meeting of 15 July 1997 the Committee on Budgets considered the draft proposal and the draft report.

At that meeting it adopted the motion for a resolution by 23 votes to 2, with 1 abstention.

The following were present for the vote: Samland, chairman and rapporteur; Willockx and Giansily, vicechairmen; Bösch, Bourlanges, Brinkhorst, Christodoulou (for Bardong), Colom I Naval, Dell'Alba, Fabra Vallés, Fabre-Aubrespy, Ghilardotti, Haug, Krehl, Kuckelkorn (for Dankert), Le Gallou, McCartin, Müller, Pasty, Seppänen, Tappin, Tomlinson, Virrankoski, Waidelich, Wemheuer (for Dührkop Dührkop) and Wynn.

The opinion of the Committee on Institutional Affairs is attached.

The report was tabled on 15 July 1997.

A MOTION FOR A RESOLUTION

Resolution on the proposalfor an Interinstitutional Agreement between the European Parliament, the Council and the European Commission on provisions regarding financing of the Common Foreign and Security Policy

The European Parliament,

- having regard to the proposal on the proposal for an Interinstitutional Agreement between the European Parliament, the Council and the European Commission on provisions regarding financing of the Common Foreign and Security Policy ,

- having regard to the results of the Intergovernmental Conference of 19 June 1997,

- having regard to Rule 85 of the Rules of Procedure,

- having regard to the report of the Committee on Budgets and the opinion of the Committee on Institutional Affairs (A4-0249/97),

1. Approves the attached Interinstitutional Agreement;

2. Instructs its President to forward this resolution to the Council and the Commission.

Interinstitutional Agreement between the European Parliament, the Council and the European Commission on provisions regarding financing of the Common Foreign and Security Policy

General Provisions

A. CFSP operational expenditure shall be charged to the budget of the European Communities, unless the Council decides otherwise, in accordance with Article J.18 (currently Article J.11) of the treaty.

B. CFSP expenditure shall be treated as expenditure not necessarily resulting from the Treaty. However, the following specific modalities of implementation of the expenditure in question are hereby laid down by common agreement between the European Parliament, the Council and the Commission.

Financial Arrangements

C. On the basis of the preliminary draft budget established by the Commission, the European Parliament and the Council shall annually secure agreement on the amount of the operational CFSP expenditure to be charged to the Communities' budget and on the allocation of this amount among the articles of the CFSP budget chapter (for articles: see suggestions under G).

In the absence of agreement, it is understood that the European Parliament and the Council shall at least agree to enter in the CFSP budget the amount contained in the previous budget, unless the Commission proposes to lower that amount.

D. The total amount of operational CFSP expenditure shall be entirely entered in one (CFSP) budget chapter, under the articles of this chapter (as suggested in G). This amount shall cover the real predictable needs and a reasonable margin for unforeseen actions. No funds will be entered into a reserve. Each article shall cover common strategies or joint actions already adopted, measures which are foreseen but not yet adopted and all future - i.e. unforeseen - actions to be adopted by the Council during the financial year concerned.

E. In conformity with the Financial Regulation, the Commission, on the basis of a Council decision, will have the authority to, autonomously, make credit-transfers between articles within one budget chapter, i.e. the CFSP envelope, and the flexibility deemed necessary for a speedy implementation of CFSP actions will accordingly be assured.

F. In the event of the amount of the CFSP budget during the financial year being insufficient to cover the necessary expenses, the European Parliament and the Council shall agree to find a solution as a matter of urgency, on a proposal by the Commission.

G. Within the CFSP budget chapter, the articles into which the CFSP actions are to be entered, could read along the following lines:

- observation and organisation of elections/participation in democratic transition processes

- EU-envoys

- Prevention of conflicts/peace and security processes

- Financial assistance to disarmament processes

- Contributions to international conferences

- Urgent actions

The European Parliament, the Council and the Commission agree that the amount for actions entered under the article mentioned in the sixth indent cannot exceed 20 per cent of the global amount of the CFSP budget chapter.

Ad hoc concertation procedure

H. An ad hoc concertation procedure shall be set up, with a view to reaching an agreement between the two arms of the budgetary authority as far as the aforementioned amount of CFSP expenditure and the distribution of this amount over the articles of CFSP budget chapter are concerned.

I. This procedure will be applied at the request of the European Parliament or the Council, notably if either of these institutions intends to depart from the preliminary draft budget of the Commission.

J. The ad hoc concertation procedure has to be concluded before the date set by the Council for establishing its draft budget.

K. Each arm of the budgetary authority shall take whatever steps are required to ensure that the results which will be secured in the ad hoc concertation procedure, are respected throughout the budgetary procedure.

Consultation and information of the European Parliament

L. On a yearly basis the Presidency of the Council shall consult the European Parliament on a document established by the Council on the main aspects and basic choices of the CFSP, including the financial implications for the Communities budget. Furthermore, the Presidency shall on a regular basis inform the European Parliament on the development and implementation of CFSP actions.

M. The Council shall, each time it adopts a decision in the field of CFSP entailing expenses, immediately and in each case communicate to the European Parliament an estimate of the costs envisaged ('fiche financière'), in particular those regarding time-frame, staff employed, use of premises and other infrastructure, transport facilities, training requirements and security arrangements.

N. The Commission shall inform the budgetary authority on the execution of CFSP actions and the financial forecasts for the remaining period of the year on a quarterly basis.

B EXPLANATORY STATEMENT

Introduction

1. The Committee on Budgets proposed modifications to the Treaty, when it submitted its opinion to the report prepared by Mr Bourlanges and Mr Martin for the Institutional Affairs Committee in 1996. With small modifications, these proposals were agreed by Parliament. They did not propose any change to the classification of expenditure on the common foreign and security policy. Rather, they included the proposal to end the distinction between compulsory and non-compulsory expenditure altogether.

2. The earlier draft text prepared by the Irish Presidency and that then submitted by the Dutch Presidency in the Intergovernmental Conference proposed that expenditure on the common foreign and security policy included in the Union budget should not be, as it currently is, non-compulsory expenditure, but defined as compulsory expenditure. As Mr Dell'Alba has already recorded in his working document on the treaty revision proposals, the Parliament witnessed a step back from the status quo in these proposals, which were defended solely by a small number of Member States, for ill-defined reasons.

3. The President of the Parliament, Mr José-Maria Gil-Robles, reacted swiftly to the strong criticism voiced about this matter by Members of Parliament. He declared that such a change would be considered as inimical to Parliament's interests. The Dutch Presidency allowed for the negotiation of an interinstitutional agreement on the matter as an option to this change. This would preserve the current classification but provide for procedures that could answer the reserves of the Member States concerned.

4. Informal negotiations at the Intergovernmental Conference and elsewhere were undertaken on the basis of a draft text on the financial provisions governing the funding of the CFSP, which was then extended to cover another of Parliament's criticisms of this sector, the lack of formal consultation of Parliament on activities undertaken in this domain. An agreement was reached before the Amsterdam Summit, subject to the confirmation by Parliament. The Agreement that has been welcomed in general terms by Parliament in its resolution adopted during the second June plenary session[1]. This report addresses the formal decision to approve the agreement and treats only this matter. The opinion of the Committee on Budgets on the Treaty of Amsterdam will be prepared by its draftsman, Mr Dell'Alba, in due course.

The proposed Interinstitutional Agreement

5. Parliament has criticised the implementation of the Common Foreign and Security Policy actions in the past, pointing out that the implementation of Union funding on joint actions has been weak in several respects. No clear structure for the costing of actions seemed to exist; no systematic attempt to compare the effectiveness of actions in financial terms was, therefore, possible; the Council provided the Commission and Parliament with too few details about the main cost items, when discussing joint actions, and did not define the objectives of the action in a sufficiently operational manner. It was regrettable therefore that Member States proposed the modification of the treaty, which would have had the effect of exacerbating the problems, by tightening the hold of the Foreign Ministries on the process and spending, and keeping the matter from the Finance Ministries, from the Commission and from Parliament, the other branch of the budgetary authority.

6. The proposed interinstitutional agreement goes some way to answering these criticisms. Your rapporteur supports the formal decision to approve the agreement. He does so because the classification of the expenditure is not changed; the agreement provides a form of co-decision on the budget chapter, in the ad hoc conciliation procedure; the agreement confirms the Commission's right of initiative in the preliminary draft budget and proposed transfer requests; it foresees a methodical and detailed costing of joint actions, before they are undertaken, and separates the responsibilities for the political and financial decisions; it also sets out a system for the agreement of the sums to be inserted each year in the budget.

7. It does more: it establishes a formal procedure for consultation of Parliament on the main aspects and basic choices of the CFSP, including the financial implications for the Communities' budget; it requires the Council to provide the detailed costings of actions, in particular those regarding time-frame, staff employed, use of premises and other infrastructure, transport facilities, training requirements and security arrangements, entirely in keeping with the proposals of the general rapporteur on the 1998 budget, Mr Tillich[2]; it also requires the Commission to inform Parliament on at least a quarterly basis of the implementation of the CFSP actions and to provide financial forecasts for the remainder of the year.

8. While regretting that the classification issue was raised at all, Parliament may be thankful that an agreement has nevertheless been found that respects the current classification and improves the chances of consistent funding decisions and coherent implementation of them.

• [1] () Amsterdam European Council (B4-0582, 0583, 0585 and 0586/97) Resolution on the meeting of the European Council on 16/17 June in Amsterdam. PV of 26 June 1997, PE260.913
• [2] () Working document No 5 on 'Common Foreign and Security Policy: Budgetary Presentation'

OPINION

(Rule 147 of the Rules of Procedure)

for the Committee on Budgets

on the proposal for an Interinstitutional Agreement between the European Parliament, the Council and the European Commission on provisions regarding financing of the Common Foreign and Security Policy (Samland report)

Committee on Institutional Affairs

Letter from the chairman of the committee to Mr Detlev Samland, chairman of the Committee on Budgets

Brussels, 3 July 1997

Dear Mr Samland,

At its meeting of 1 and 2 July 1997 the Committee on Institutional Affairs decided to deliver a favourable opinion on the Interinstitutional Agreement on provisions regarding the financing of the CFSP.

Yours sincerely,

(sgd) Biagio De Giovanni