REPORT on the Mid-Term Review of the 2007-2013 Financial Framework

26.2.2009 - (2008/2055(INI))

Committee on Budgets
Rapporteur: Reimer Böge

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the Mid-Term Review of the 2007-2013 Financial Framework

(2008/2055(INI))

The European Parliament,

–   having regard to the EC Treaty and in particular Articles 268 to 280 thereof,

–   having regard to the ongoing ratification process of the Treaty of Lisbon,

–   having regard to the Interinstitutional Agreement (IIA) of 17 May 2006 between the European Parliament, the Council and the Commission on Budgetary Discipline and Sound Financial Management[1],

–   having regard to its resolution of 8 June 2005 on Policy Challenges and Budgetary Means of the enlarged Union 2007-2013[2],

–   having regard to the Commission working document of 3 November 2008 on Reforming the Budget, Changing Europe (SEC(2008)2739),

–   having regard to the Conference on Reforming the Budget, Changing Europe hosted by the Commission on 12 November 2008,

–   having regard to its resolutions of 13 December 2007[3] and of 18 December 2008[4] on the 2008 and 2009 draft general budgets of the European Union (all sections),

–   having regard to its resolution of 29 March 2007 on the future of the European Union's own resources[5],

–   having regard to its resolution of 12 December 2007 on the amended proposal for a decision of the European Parliament and of the Council amending the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management as regards the multi-annual financial framework[6],

–   having regard to its position of 4 December 2008 on the proposal for a regulation of the European Parliament and of the Council establishing a facility for rapid response to soaring food prices in developing countries[7],

–   having regard to its resolution of 21 February 2008 on the 4th report on economic and social cohesion[8],

–   having regard to its resolution of 12 March 2008 on the CAP "Health Check"[9],

–   having regard to the conclusions of the European Councils of 15-16 December 2005, 21-22 June 2007 and 11-12 December 2008,

–   having regard to the response by the European Court of Auditors to the Commission's communication "Reforming the Budget, Changing Europe" (SEC(2007)1188),

–   having regard to Rule 45 of its Rules of Procedure,

–   having regard to the report of the Committee on Budgets and the opinions of the Committee on Foreign Affairs, the Committee on Development, the Committee on Budgetary Control, the Committee on Industry, Research and Energy, the Committee on Regional Development and the Committee on Agriculture (A6‑0110/2009),

A. whereas the European Parliament, the Council and the Commission agreed on the IIA of 17 May 2006 on Budgetary Discipline and Sound Financial Management following intense negotiations based on the European Parliament's negotiating position of 8 June 2005, based on an in-depth analysis of the needs in order to identify political priorities, and on the agreement achieved by the Member States in 2005,

B.  whereas the IIA of 17 May 2006 provides that the Commission will report on the functioning of the IIA by the end of 2009 and invites the Commission to undertake a full wide-ranging review covering all aspects of EU spending, including the Common Agricultural Policy and resources, including the UK rebate, and to report in 2008-2009,

C. whereas the Commission launched a wide public consultation in September 2007, to which more than 300 contributions were made, and hosted a conference "Reforming the Budget, Changing Europe" on 12 November 2008 which marked the first step of the review process,

D. whereas the Commission intends to present a Communication outlining the main orientations that should design the next financial framework at the latest in Autumn 2009 and should present a report on the functioning of the IIA (step two of the process) while the proposals for the next multiannual financial framework (MFF) and IIA will be made by the next Commission (step three) in the course of 2010,

E.  whereas the ratification process of the Treaty on the functioning of the European Union is not yet completed,

F.  whereas the financial provisions of the Treaty of Lisbon provide that the MFF will have legally binding status under the Treaty on the Functioning of the European Union and have a duration of "at least 5 years",

G. whereas the Treaty of Lisbon provides for an extension of competences of the European Union, the consequences of which might be reflected in a number of new policies for which appropriate legal bases and financing might be necessary,

H. whereas the institutions should ensure that the calendar of the next financial framework allows for democratic legitimacy and matching of the Commission and Parliament mandates as far as possible, considering a possible prolongation and adjustment of the current MFF until 2015/2016,

I.   whereas the designation of a new Commission and the hearings due to take place in this context should be an opportunity for the newly elected Parliament to question and evaluate the new Commissioners on their respective policy priorities and the budgets deemed necessary for that purpose,

J.   whereas the mid-term evaluation of the ongoing legislative programmes, due in 2010-2011, should represent a major basis for a future assessment of ongoing programmes and future priorities, and should be duly taken into account for a possible prolongation and adjustment of the current financial framework until the end of 2015/2016,

1.  Recalls that Parliament has intensively contributed to the setting-up of the 2007-2013 MFF and IIA of 17 May 2006 on Budgetary Discipline and Sound Financial Management while, in parallel, allowing the continuity of EU legislation through the launching of a huge number of multiannual programmes; thinks that most of the recommendations of the Parliament's report are still valid because they were based on a bottom-up approach that linked tasks and promises with the necessary budgetary means; in this context, is of the opinion that some broad principles and orientations based on past experience could be transmitted to the incoming Parliament;

A three-step approach

2.  Welcomes the initiative taken by the Commission in organising a broad open consultation seeking to find new ideas and emerging trends; recalls, however, that, within the bounds of the institutional prerogatives which each institution enjoys, the European Parliament is entitled to explore other solutions and lines of thought on the basis of consultations and hearings it has planned itself;

3.  Considers that, over the last two years following the entry into force of the 2007 MFF and of the IIA of 17 May 2006, some progress has been made on the three pillars developed by Parliament in its resolution of May 2006: matching political priorities and financial needs, modernising the budget structure and improving the quality of implementation of the EU budget; notes nevertheless that there is still space for improvement like fulfilling the then agreed "déclaration d'assurance" (DAS), simplification of rules and improvement of the use of already provided-for but highly under-implemented funds;

4.  Recalls its awareness of the fact that a number of deficits remained unresolved in the final agreement - such as the introduction of regional and national management declarations; stresses that the need for additional financing for EU political priorities, notably for Galileo, the EIT and the food facility arose and a solution was found by means of the existing instruments of the IIA of 17 May 2006; notes that the Council itself has been unable to implement the European Council’s agreement seeking to allocate EUR 5 000 000 000 from the EU budget to the economic recovery and support programme; believes that further adjustments within the current MFF and IIA based on a sufficient and ambitious review will be necessary;

5.  Points out that a distinction should be made between the review of certain programmes within the current MFF based on the mid-term evaluation of legislation to take place in 2010-2011, the existing challenges resulting from the insufficient financing of heading 4 and heading 1a, and the new challenges such as energy, climate change, citizenship, freedom, security and justice, the fight against organised trans-border crime, CFSP and other policies linked to the new competences provided by the Treaty of Lisbon and the preparation of the new MFF; stresses that a prolongation of the present MFF makes an ambitious mid-term review an even more necessary precondition;

6.  Stresses that the current context and a number of uncertainties linked to the ratification process of the Treaty of Lisbon on the one hand, and, on the other, the end of the current parliamentary term, the outcome of the European elections and the setting-up of the new Commission in the current economic context, will not allow to take detailed positions aiming at an ambitious review in the coming months; stresses, though, that an ambitious review should be an urgent priority for the new Parliament and Commission;

7.  Is therefore of the opinion that a realistic mid-term review should develop in three steps:

(a)  -  resolving deficits and left-overs in the context of the annual budgetary procedures, if possible through more flexibility and, if necessary, using part of the margin left below the own resources ceiling,

      -  assessment of the mid-term evaluation,

(b)  -  preparation of a possible adjustment and prolongation of the current MFF until 2015/2016 in order to allow for a smooth transition for a system of an MFF of five years' duration which gives to each Parliament and each Commission, during each of their respective terms of office, the political responsibility for each MFF,

      -  possible adjustments and prolongation of the current programmes as provided for by legislation (2010-2011) in line with the possible prolongation of the MFF, as already demanded several times by Parliament,

(c)  -  preparation of the next MFF starting in 2016/2017; this phase will be the responsibility of the Parliament elected in 2014;

General principles

8.  Recalls that the own-resources ceiling represents 1,31 % of EU GNI in commitments and 1,24 % of EU GNI in payments; also recalls that every year significant margins are left below the ceiling set up by the financial framework, notably in payments (EUR 8 300 000 000 in 2007, EUR 13 000 000 000 in 2008, EUR 7 800 000 000 in 2009); moreover recalls that huge margins exist between the MFF ceiling and the ceiling of the EU own resources[10] (EUR 36 600 000 000 in 2010, EUR 44 200 000 000 in 2011, EUR 45 000 000 000 in 2012 and EUR 50 600 000 000 in 2013)[11];

9.  Confirms its position of March 2007 in which it stressed that "the political link between the reform of revenue and a review of expenditure is inevitable and perfectly reasonable"; believes that the two processes should be run in parallel with the aim of merging them in a global and integrated reform for a new system of EU financing and spending at the latest for the MFF starting in 2016/2017, which would require the preparatory work, including ratification, to be done beforehand; calls for consideration of a system whereby benefits and burdens between the Member States come to a generally more adequate level;

10. Believes that the general magnitude of EU resources must not be affected by the current world economic crisis, even if the Member States' GNI will cease to follow an ever increasing curve; is therefore convinced that EU spending should concentrate on policies with a clear European added value, fully in line with the principles of subsidiarity proportionality and solidarity; recalls that in a time of crisis this added value is measured largely in terms of the fundamental principle of solidarity between European peoples;

11. Stresses that sound financial management, improved management by the Member States and the Commission matching political priorities and financial needs should remain a priority for the coming years, and that this objective should be pursued through prior identification of positive and negative priorities rather than through self-imposed ceilings, therefore believes that the MFF should have a greater degree of flexibility; emphasises that the challenges facing the EU (with crises in food, energy and the financial sectors) are of a magnitude rarely seen in its history; considers that a truly European response to these crises requires international legislative and budgetary measures;

12. Believes, since the Union's policy priorities are in a state of constant evolution as a result of globalisation, demographic change, technological development, the need to ensure secure and diverse sources of energy supply, and climate change, that it is essential that EU spending be re-evaluated and optimised in order to achieve the highest value added and most effective EU action;

13. Is convinced that more flexibility within and across headings is an absolute necessity for the functioning capacities of the Union not only to face the new challenges of the EU but also to facilitate the decision-making process within the Institutions; expects the Commission in its forthcoming proposals, based on Declaration No 1 of the IIA of 17 May 2006, to take relevant initiatives in this sense;

14. Recalls that point 21 of the IIA lays down that "in the event of unforeseen circumstances the financial framework may, on a proposal from the Commission, be revised in compliance with the own-resources ceiling"; once again criticises the irrational behaviour of the Council which repeatedly opposes the use of this possibility of revision;

15. Reiterates its will to see a concrete and rapid improvement of the Member States' and the Commission's implementation of EU policies and of the cohesion policy in particular; firmly expects the joint commitment made by the Commission and the Council on behalf of the Member States in November 2008 to simplify the procedures (notably of the ETS) in order to accelerate payments, and to produce a positive effect in the coming budgets; is ready to take political and administrative measures, should the current situation remain unchanged; suggests that simplification of procedures must be a priority also in other areas, for example research and innovation and SME policy;

16. Notes that high priority should be given to effective management of EU spending; notes, further, that it is particularly important that allocations of funds are based on objective criteria and on a continuous evaluation of their performance; considers that strong and efficient Public-Private Partnerships (PPP) should be fostered in this respect;

17. Regrets the slow progress of the debate on reforming the EU budget financing system, which has become even more urgent as a result of the economic crisis; regrets in particular that the opportunity of establishing a system for auctioning greenhouse gas emission rights was not seized so as to launch a fundamental political debate on allocation of the new public resources created by EU decisions; urges that this debate be launched in the context of the mid-term review of the Financial Framework;

18. Notes that a large proportion of the Union’s objectives have been taken into account by the Member States in their national budgets; insists that the appropriations thus mobilised be recorded and published in each Member State to make it easier to gauge the effort made by each one and assess the amounts for which provision needs to be made in the EU budget in fields where Member States’ efforts need to be encouraged or complemented;

Specific observations

19. Is determined to find appropriate financing for the new or additional policies which might follow from the possible entry into force of the Treaty of Lisbon (such as energy and space policies, research under heading 1a; judicial cooperation under heading 3a; youth, sport, information and communication policy, public health under heading 3b; humanitarian aid, European External Action Service under heading 4);

20.      Recalls that headings 1a, 3 and 4 are already under-financed in the current MFF; stresses that additional policies should not change the balance between the main categories of the current MFF nor jeopardise the existing priorities; stresses also that, should some Member States continue to insist on a "1 % approach", there will be no budgetary alternative, in order to finance new priorities, but to also contribute from the two main policies of headings 1b and 2;

21. Considers that providing the Union with the means to fulfil its political ambition in the areas of energy security and the fight against climate change should be part of a short-term review, independent of the entry into force of the Treaty of Lisbon; is ready to examine the possibility of the creation of a specific fund for that purpose; stresses that this must also be a top priority for the next MFF, preferably through a global agreement on how to finance climate change policies; considers, with a long-term perspective, the creation of a new category bundling all budget-relevant policies in the fight against climate change;

22. Stresses the need for policy coherence in this respect and points to the need to carry out a climate change proofing of all major programmes including agriculture, cohesion programmes, transport and energy networks, and development programmes;

23. Reiterates its readiness to enter into negotiations with the Council on the Commission proposals to finance energy and network projects (broadband) in the context of the EU Recovery Plan;

24. Insists on pursuing the target of an increase of Research and Innovation expenditure to 3 % of EU GNI by the year 2010; stresses that scientific research, scientific infrastructure, technological development and innovation are at the heart of the Lisbon Strategy and key factors for growth, job creation, sustainable development and EU competitiveness;

25. Underlines the potential of education, culture and youth programmes to bring Europe closer to its citizens and to foster cultural diversity as well as mutual understanding, apart from the role that education plays in reaching the Lisbon targets and in matching skills with the new challenges and opportunities that arise from the financial and economic crisis and from climate change;

26. Recalls that heading 4 "The EU as a global partner" remains chronically under-financed; asks the Commission to make proposals: for financing with a long-term perspective to help reach the Millennium Development Goals; for commitments resulting from an international climate change agreement independent of development aid; for preventing conflicts and promoting human rights and fundamental freedoms; for a credible neighbourhood policy; and for CFSP/ESDP (subject to adequate discharge procedures), in order to avoid recurrent and endless negotiations with the Council during the annual budgetary procedures;

27. Recalls the commitments made by the Member States in 2005 in view of reaching the target of 0,7 % of EU GNI for the official development assistance (ODA) in 2015; believes that the support of the EU budget can be a useful incentive to help the Member States to keep to this goal; reiterates its will to integrate the European Development Fund into the general budget so as to enhance transparency with its parliament-accompanied and -controlled decision-making procedures;

28. Invites the Parliament elected in 2009, for reasons of transparency, to incorporate funds currently operating outside the budget into the regular budget structure;

o

o        o

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

• [1]  OJ C 139, 14.6.2006, p. 1.
• [2]  OJ C 124 E, 25.5.2006, p. 373.
• [3]  OJ C 323 E, 18.12.2008, p. 454.
• [4]  Texts Adopted, P6_TA(2008)0622.
• [5]  Texts Adopted, P6_TA(2007)0098.
• [6]  OJ C 323 E, 18.12.2008, p. 263.
• [7]  Texts Adopted, P6_TA(2008)0576.
• [8]  Texts Adopted, P6_TA(2008)0068.
• [9]  Texts Adopted, P6_TA(2008)0093.
• [10]  Council Decision 2000/597/EC, Euratom of 29 September 2000 on the system of the European Communities' own resources (OJ L 253, 7.10.2000, p. 42).
• [11]  1.24 % own resources ceiling vs. MAFF ceiling based on 2009 estimated EU 27 GNI.

EXPLANATORY STATEMENT

Working document on the 2007-2013 Multiannual Financial Framework review: first reflections

1.        State of play

The mandate for the review

1.        The budgetary review finds its origin in the conclusions of the European Council of December 2005 and later, in the Interinstitutional Agreement on budgetary discipline and sound financial management (IIA) setting up the new financial framework.

Declaration No 1 of the IIA of 17 May 2006

In relation to Point 7 of the Interinstitutional Agreement, the Commission will prepare a report on the functioning of the Interinstitutional Agreement by the end of 2009 accompanied, if necessary, by relevant proposals.

Declaration No 3 of the IIA of 17 May 2006   

1. In accordance with the conclusions of the European Council, the Commission has been invited to undertake a full, wide-ranging review covering all aspects of EU spending, including the Common Agricultural Policy, and of resources, including the United Kingdom rebate, and to report in 2008/2009. That review should be accompanied by an assessment of the functioning of the Interinstitutional Agreement. The European Parliament will be associated with the review at all stages of the procedure on the basis of the following provisions:

- during the examination phase following the presentation of the review by the Commission, it will be ensured that appropriate discussions take place with the European Parliament on the basis of the normal political dialogue between the institutions and that the positions of the European Parliament are duly taken into account,

- in accordance with its conclusions of December 2005, the European Council 'can take decisions on all the subjects covered by the review'. The European Parliament will be part of any formal follow-up steps, in accordance with the relevant procedures and in full respect of its established rights.

2. The Commission undertakes, as part of the process of consultation and reflection leading up to the establishment of the review, to draw on the in-depth exchange of views it will conduct with European Parliament when analysing the situation. The Commission also takes note of the European Parliament's intention to call for a conference involving the European Parliament and the national parliaments to review the own-resources system. It will consider the outcome of any such conference as a contribution in the framework of that consultation process. It is understood that the Commission's proposals will be put forward entirely under its own responsibility.

     In its second reading resolution [1] of the 2007 Budget, the Parliament:

14.         Confirms that the political analysis as prepared by the "Temporary Committee on Policy Challenges and Budgetary Means of the Enlarged Union 2007-2013" and the relevant resolution adopted by Parliament on 8 June 2005 remain the basis for the review and any possible changes of the IIA.

2.        In order to define the scope and contents of the review, a distinction should be made between:

- the short term review of the IIA (covered by declaration 1 of the IIA) which aims to proceed to an evaluation of the functioning of the MFF and relevant proposals by the Commission;

- the mid/long term review preparing the financing after 2013 (covered by Declaration 3 of the IIA) corresponds to the "broad wide-ranging review clause" mentioned in the European Council conclusions. It would cover: a reform of the financing mechanism, i.e. Own Resources and of expenditure including the CAP (co-financing), the UK rebate and likely possible consequences implying a revision of the Treaty.

3.        On 15 January 2007, the Commission issued an "information note from the President on the review of the internal market, the social stocktaking and the budgetary review"[2] as a preliminary step in response to its mandate (phase1). In this paper, the Commission outlines the steps and the calendar of the review. This review "should by no means be perceived as the preparation of a new multi-annual financial framework and should not anticipate on it". "The purpose of the consultation exercise is to stimulate ideas". The consultation will involve the European Parliament, the Council and the Member States but also the EU policies stakeholders, key actors at local, regional and national level and the civil society.

4.        After having delayed it from June to September, the Commission has foreseen to adopt an Issue Paper on 12 September. Doing so, the Commission will open the consultation process under its own responsibility (phase 2). Problematic questions will be raised but the document will keep a purposely "open" character. The third phase will be the presentation of a White Paper (end of 2008, first semester of 2009?) which should serve as a basis for the proposals for the next financial framework. Apparently, the White Paper will be prepared by a brainstorming seminar in April-May 2008 in which the EP will be asked to participate.

5.        The European Parliament had set up a Temporary Committee which adopted its final report on 8 June 2005, in time to set up EP's position before the European Council of June 2005 which finally failed to conclude on the matter. The decision of the European Council was postponed until December 2005. After almost two years of intensive negotiations, the multiannual financial framework for the period 2007-2013 (MFF) and the Interinstitutional Agreement on budgetary discipline and sound financial management (IIA) were finally agreed on 17 May 2006.

6.        In its resolution on the conclusion of the IIA, the Parliament recalls "that the agreement reached by the three institutions on 4 April 2006 was the only compromise EP could achieve within the magnitude of the negotiations" but acknowledges that "a number of deficits are still unresolved in the outcome of the negotiations" and “considers that these deficits should be addressed in the 2008-2009 review and, where possible, in the course of the annual budgetary procedures."

7.        The rapporteur wishes to recall that the internal in-depth work, which has been carried out by the Temporary Committee setting up EP's position on the main priorities for the period 2007-2013, should therefore remain the reference of the work achieved so far as well as the basis for the assessment to be made, as underlined by the Parliament in various resolutions. He also recalls that during the negotiations, the rapporteur had estimated that an additional and minimum amount of approximatively 12 billion Euros was necessary to cover the need in relation with EU responsibility. EP also emphasized the need for qualitative reforms.

8.        The rapporteur notes that some hesitation exists within the Member States and the institutions on both the timing and the scope of the review. Therefore, he expresses some doubts about the foreseen developments:

- does the calendar set up by the Commission correspond to the general political will?

- would the wisdom not be to consider that the general context remains uncertain and that the current priorities might change?

- is it reasonable to launch a political reflection on an ambitious process that will have to be decided by new actors (new Parliament new Commission)?

- is the current context favourable and sufficiently ripe to open a discussion on the current major policies (CAP, Cohesion, Research) for the period after 2013?

2.        Next steps

A complex calendar

9.        After two years of uncertainty, the institutional future of the European Union has been relaunched by the European Council of June 2007. The 27 Member States have agreed to call an Intergovernmental Conference which should prepare the Reformed Treaty out of the draft Constitution. If the ratification procedures go along as foreseen, the Reform Treaty could enter into force by mid 2009, more or less in parallel to the European elections. Should there be some failure in the ratification process of the Reformed Treaty, the consequences for the European project and Budget are not foreseeable.

10.      The rapporteur is of the opinion that the review process should take on board this new context. If the calendar foreseen by the conclusions of the European Council is respected, the entry into force of a new Treaty, the election of a new Parliament in June 2009 and the appointment of a new Commission should occur in the second part of the year 2009. In this context, the interinstitutional discussions on the review might be delayed to avoid any risk of confusion.

When	What
Jan - June 2007	Commission presents a road map
September 2007	Commission publishes the Issue Paper
Jul - Dec 2008	Commission and Agriculture "health check" Consultation phase
Jan - June 2009 EP elections	Brainstorming seminar Commission presents its White Paper
Mid 2009	Entry into force of the Reform Treaty?
Jul - Dec 2009 new Commission	Hearings of designated Commissioners
Jan - June 2010	Commission adopts formal proposals?

11.      Apart from the Reform Treaty which will be the first priority of the Member States and of the institutions over the coming months, other internal and external factors will have an influence on the review, such as the "clause de rendez-vous" of the CAP Reform and the report on Cohesion in 2008, the preparation of the Energy package, the revision of the Financial Regulation, the European elections, the new Commission as well as multilateral agreements such as the next rounds up of WTO negotiations.

A three pillars approach

12.      The rapporteur considers that the review should rely on three pillars:

- the resolving of the left-overs which could not be sufficiently achieved in the negotiations of the current MFF,

- an assessment of the mid-term evaluation of the new programmes as foreseen in legislation and an analysis of the agreed reforms.

- the preparation of the next MFF after 2013.

13.      The rapporteur notes that almost all the new generation of programmes linked to the 2007-2013 MFF have now been adopted although a number of them have been delayed following problems in the adoption of the legal acts. Only a few (Galileo, Fiscalis, framework programme on Fundamental Rights and Justice) are still pending (see table in annex 2).

14.      Concerning the left-overs, the rapporteur notes that already during the first year of the current MFF, deficits can be observed in heading 1A and in heading 4 for which solutions will have to be found already during the 2008 annual procedure. An appropriate financing of the EIT and of Galileo requires an extra amount of 2.7 billion euros over the period under heading 1A. A similar situation exists under heading 4. Although EP delegation succeeded to increase heading 4 by 1 billion during the negotiations, CFSP remains chronically underfunded. Other needs might occur for heading 3B. It should be reminded that at the trilogue of 4 April 2006, EP delegation asked for and obtained a supplementary amount of 4 billion euros over the amounts decided by the European Council.

15.      Concerning the evaluation of the new programmes, the legal acts foresee that mid-term evaluations should take place around 2010 for those which have started in 2007. A first analysis could already take place around the European elections. The rapporteur considers that a serious analysis of the utilisation of EU funding should be made in this context in accordance with EP's request for a better implementation and qualitative improvement. On the basis of these evaluations to which EP should actively contribute in its capacity of budgetary and legislative authority, adjustments to the financial envelopes might be needed, including through the use of the legislative flexibility (up to 5 % of the envelope of the programmes and, if needed, more flexibility within and across headings.)

16.      Moreover, the IIA on budgetary discipline contains a number of new instruments supported by the EP during the negotiations. The functioning and added value of these instruments (EUSF, EAGF, Emergency Reserve, Flexibility instruments, financial instruments in cooperation with EIB) should also be part of this mid-term assessment.

17.      As far as the third pillar is concerned, i.e. the preparation of the next financial framework, the rapporteur considers that it is of paramount importance that the calendar aims to avoid to repeat the situation which occurred last time and which was highly criticised by the Parliament, putting in question the "legitimacy"of the Prodi package prepared by a going Commission and endorsed by the Barroso Commission without adjusting the priorities after the European elections.

18.      Assuming the fact that the financial provisions of the Constitution are confirmed by the IGC, the multiannual financial framework should be part of the Treaty with a duration of "at least five years". Therefore it could be envisaged to use the proposals for the next MFF as a work programme for the new Commission and the newly elected Parliament in the context of the hearings to be held in November 2009. This option could imply a prolongation of the current MFF and possibly some adjustments to some multiannual programmes, based on a sufficient and ambitious review and necessary adjustments until 2015, and would allow in future to ensure a phasing with the mandates of the Parliament and the Commission.

19.      The review, as described in the IIA Declaration, covers both the EU expenditure and revenues. Concerning the revenue side, progress has been made at Parliaments' initiative over the last months. The Lamassoure report[3], after observing that the current system does not work, proposes a two-step approach converging into one decision: to acknowledge the need for a transparent and fair system in a first phase, and to define new options for EU Own Resources in a second phase. Options will be defined and proposed at a second phase. The Conference with the national parliaments, to be held at the initiative of the Portuguese Presidency on 4-5 November, will be an opportunity to pave the way for reflecting on the introduction of a new system of own-resources in the spirit of the founding treaties.

20.      In line with the Lamassoure report which states that "EP is convinced that the political link between the reform of revenue and a review of expenditure is inevitable and perfectly reasonable", the rapporteur believes that the two processes should be run in parallel with the aim to merge in a global and integrated reform for a new system of EU financing and spending at the latest in 2015, which would imply that the preparatory work is done beforehand.

Conclusions

21.      Before the Commission formally launches the review process, the rapporteur considered it useful to put some fundamental questions in discussion before the committee. With this working document, he would like to have the committee’s views on his proposals for:

-          a three pillar approach or other possible alternatives

-          the timing of the review

-          the actors: which Parliament and which Commission should be involved in which phase ?

-          the scope: launching of an ambitious review or adjustments and assessment first ? Should the review cover the expenditure only or also the resources? Should the review be limited to general reflections, have a political content leave the quantitative decisions to the next Commission ?

Annex 1

Outcome of the trilogue 04-04-06 (€ million in 2004 prices)	Proposals for increase(above Council)
Sub-Heading 1a - Competitiveness for growth and employment	2.100
Trans-European Networks (TENs)	500
Life Long Learning (Erasmus Mundus - Leonardo)	800
7th Research framework programme	300
Competitiveness and innovation (CIP)	400
Social Policy Agenda (Progress)	100
Reserve for future actions	100
Sub-Heading 1b - Cohesion for growth and employment	300
Structural Funds (Territorial co-operation)	300
Heading 2 - Preservation and management of natural resources	100
Reserve for future actions (Life + and Natura 2000)	100
Sub-Heading 3a - Freedom, security and justice
Reserve for future actions
Sub-Heading 3b – Citizenship (Youth, Culture, Health and Consumers)	500
Health & consumer protection
European Culture and Citizenship (Culture, Youth, Citizens for Europe)
Media
Reserve for future actions
Heading 4 - The EU as a global partner	1.000
Instrument for pre-accession (IPA)
European Neighbourhood & Partnership Instrument (ENPI)	200
Development Cooperation and Economic Cooperation Instrument (DCEC)
CFSP	800
TOTAL	4.000

Simulation 21 March
(€ million in 2004 prices)	Rapporteur's proposal (on Council)
Sub-Heading 1a - Competitiveness for growth and employment
TEN (transport & energy) (1)	1.000
Life Long Learning (Erasmus Mundus + Leonardo)	1.750
7th Research framework programme (2)	1.000
CIP - Competitiveness and innovation (3)	800
Progress (social policy agenda)	200
Unallocated margin	500
Sub-Heading 1b - Cohesion for growth and employment
Structural Funds	1.000
Heading 2 - Preservation and management of natural resources
Unallocated margin	500
Sub-Heading 3a - Freedom, security and justice
Margin	500
Sub-Heading 3b - Citizenship
Health & consumer protection	1.000
European Culture and Citizenship (Culture, Youth, Citizens for Europe)	500
Media	120
Unallocated margin	500
Heading 4 - The EU as a global partner
IPA - Instrument for pre-accession (b)	1.000
ENPI - European Neighbourhood & Partnership Instrument	1.547
DCEC - Development Cooperation and Economic Cooperation Instrument	244
Heading 5 - Administration
Heading 6 - Compensations
GRAND TOTAL	12.161
(1) of which 500 contribution to EIB co-financing
(2) of which 1.000 contribution to EIB co-financing
(3) of which 1.000 contribution to EIB co-financing

Annex 2

Multiannual Financial Framework 2007-2013

State of play of financial statements of Commission proposals and overall envelopes (in mio. EUR, current prices)

		2007	2008	2009	2010	2011	2012	2013	Total	Procedure/Remarks
SUB-HEADING 1A - Competitiveness for growth and employment
TEN (TRANSPORT AND ENERGY)		853	972	1.051	1.084	1.264	1.379	1.564	8.168
COM(2004) 475 final BUDG, Mauro	Initial Proposal for a Regulation of the European Parliament and of the Council determining the general rules for the granting of Community financial aid in the field of the trans-european transport and energy networks and amending Council Regulation (EC) n° 2236/95	915	1.788	2.352	2.885	3.555	4.252	4.943	20.690	COD/2004/0154Procedure ended, publication in OJ pending
COM(2006) 245 final	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	853	972	1.051	1.084	1.264	1.379	1.565	8.168
	Final legislative act :								8.168
SPATIAL INFRASTRUCTURE (GALILEO)		100	152	201	251	152	151		1.006
COM(2004) 477 final ITRE, Barsi-Pataki	Proposal for a Regulation of the European Parliament and the Council on the implementation of the deployment and commercial operating phases of the European programme of satellite radio navigation (Galileo)	500	200	150	100	50			1.000	COD/2004/0156
COM(2004)0477/2	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	100	151	201	251	151	151		1.005	1st reading by Council pending
	Final legislative act :									No common position
MARCO POLO II		56	60	62	64	67	70	73	452
COM(2004) 478 final	Initial Proposal for a Regulation of the EP and of the Council establishing the second “Marco Polo” programme for the granting of Community financial assistance to improve the environmental performance of the freight transport	30	50	100	130	130	150	150	740	COD/2004/0157Procedure ended
TRAN, Rack	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									*2004 figures,
L 328 24.11.2006	Final legislative act : Regulation 1692/2006/EC establishing the second ‘Marco Polo’ programme and repealing Regulation 1382/2003/EC								400*	Shall be subject to technicaladjustment
NUCLEAR DECOMMISSIONING		244	248	253	180	183	187	192	1.487
COM(2004) 624 final ITRE, Harms	Proposal on the nuclear power plant of Ignalina in Lithuania and on the nuclear power plant of Bohunice V1 in Slovakia	142	145	147	150	154	156	159	1.052	CNS/2004/0221Procedure ended, publication in OJ pending
COM(2004)0624/2	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	170	172	176	180	183	187	192	1.260
	Final legislative act :
LIFELONG LEARNING		904	996	1.060	1.104	1.137	1.195	1.231	7.627
COM(2004) 474 final CULT, Pack	Proposal for a Decision of the European Parliament and of the Council establishing an integrated action programme in the field of lifelong learning	1.220	1.387	1.617	1.859	2.176	2.505	2.856	13.620	COD/2004/0153Procedure ended and published in OJ
COM(2006) 236 final	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	845	900	964	1.005	1.037	1.093	1.126	6.970
L 327 24.11.2006	Final legislative act : Decision 1720/2006/EC of the EP and of the Council								6.970
PROGRESS (SOCIAL POLICY AGENDA)		83	93	100	108	113	120	128	744
COM(2004) 488 finalEMPL, Jöns	Proposal for a Decision of the European Parliament and of the Council establishing a Community Programme for Employment and Social Solidarity – PROGRESS	83	85	87	90	92	192		629	COD/2004/0158Procedure ended and published in the OJ
	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	83	96	104	110	114	117	120	743
L 315 15.11.2006	Final legislative act : Decision No 1672/2006/EC of the EP and of the Council of 24/10/2006								657
7th RESARCH FRAMEWORK PROGRAMME		5.486	6.075	6.722	7.550	8.599	9.572	10.578	54.581
COM(2005) 119 final	Building the Europe of knowledge - Proposal for a decision concerning the seventh framework programme of the European Community for research, technological development and demonstration activities (2007 to 2013) and									COD/2005/0043Procedure ended and published in OJ
ITRE, Buzek	Proposal for a decision concerning the seventh framework programme of the European Atomic Energy Community (EURATOM) for nuclear research and training activities (2007 to 2011)	6.120	7.720	9.340	11.000	12.680	14.400	16.200	77.460
	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	5.486	6.075	6.721	7.550	8.600	8.926	9.914	53.272
L 412 30.12.2006	Final legislative act : Decision No 1982/2006/EC of the EP and of the Council of 18/12/2006								50.521
	OF WHICH									CNS/2005/0185
COM(2005) 440 final/2	Specific Programme “Cooperation” implementing the Seventh Framework Programme (2007-2013) of the European Community for research, technological development and demonstration activities									Procedure ended, publication in
		3.671	3.762	3.903	4.291	4.837	5.513	6.316	32.292	OJ pending
	Final legislative act :								32.413
	OF WHICH
COM(2005) 439 final/2	Specific Programme to be carried out by means of direct actions by the Joint Research Centre under the 7th Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013)									CNS/2005/0184
		225	233	241	249	258	267	277	1.751	Procedure ended and
L 400 30.12.2006	Final legislative act : Council Decision 2006/975/EC								1.751	published in OJ
COM(2005) 441 final/2	Specific programme: “Ideas” implementing the 7th Framework Programme (2007-2013) of the European Community for research, technological development and demonstration activities									CNS/2005/0186
		300	550	810	1.137	1.335	1.624	1.704	7.460	Procedure ended and published
L 400 30.12.2006	(COM(2005) 444 final/2)								7.510	in OJ
COM(2005) 442 final/2	Specific programme “People” implementing the 7th Framework Programme (2007-2013) of the European Community for research, technological development and demonstration activities									CNS/2005/0187
		454	494	526	561	778	934	979	4.727	Procedure ended and published
L 400 30.12.2006	Final legislative act : Council Decision 2006/973/EC of 19/12/2006								4.750	in OJ
COM(2005) 443 final/2	Specific Programme: "Capacities" implementing the 7th Framework Programme (2007-2013) of the European Community for research, technological development and demonstration activities									CNS/2005/0188
		432	540	639	694	760	588	639	4.291	Procedure ended and published
L 400 30.12.2006	Final legislative act : Council Decision 2006/0974/EC								4.097
COM(2005) 444 final/2	Specific Programme to be carried out by means of direct actions by the Joint Research Centre implementing the 7th Framework Programme (2007-2011) of the European Atomic Energy Community (Euratom) for nuclear research and training activities									CNS/2005/0189
		96	100	103	107	111			517	Procedure ended and published in
L 400 30.12.2006	Final legislative act : Council Decision 2006/977/Euratom								517	OJ
COM(2005) 445 final/2	Specific Programme implementing the seventh Framework Programme (2007-2011) of the European Atomic Energy Community (Euratom) for nuclear research and training activities									CNS/2005/0190
		308	396	499	510	521			2.234	Procedure ended, publication
	Final legislative act :								2.234	in OJ pending
COM(2005) 118 final	Communication from the Commission: Building the ERA of knowledge for growth
	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013
COM(2004) 353 final	Communication from the Commission on Science and technology, the key to Europe’s future – guidelines for future European Union Policy to support research									INI/2004/2150Procedure ended, publication in OJ pending
ITRE, Locatelli	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013
COMPETITIVENESS AND INNOVATION		432	455	486	527	566	602	648	3.716
COM(2005) 121 final	Proposal for a Decision establishing a Competitiveness and Innovation Framework Programme (2007-2013)	413	454	553	601	677	727	788	4.213	COD/2005/0050
ITRE, Chatzimarkakis	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended,published in OJ
L 310 09.11.2006	Final legislative act : Decision 1639/2006/EC of the European Parliament and of the Council								3.621
CUSTOMS 2012, FISCALIS & EMCS		68	69	72	78	84	90	94	555
COM(2005) 111 final	Communication from the Commission on Community programmes Customs 2013 and Fiscalis 2013		69	78	85	87	88	90	498	New proposal announced by the Commission splitting between Customs and Fiscalis
ECON, Martin	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013
COM(2006) 201IMCO, Fourtou	New Commission's proposal : CUSTOMS 2013								324	COD/2006/0075 : Procedure ended, publication in OJ pending
COM(2006) 202 ECON, Martin	New Commission's proposal : FISCALIS 2007								168	COD/2006/0076 :1st reading by Council pending
SUB-HEADING 1B - Cohesion for growth and employment
STRUCTURAL FUNDS AND COHESION FUND		45.487	46.889	48.428	49.394	50.627	52.401	54.188	347.414
COM(2004) 492 final		46.169	51.056	52.863	54.083	55.325	58.361	58.361	376.218	AVC/2004/0163
REGI, Hatzidakis	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, publiched
L 210 31.07.2006	Final legislative act : Regulation 1083/2006/EC of the EP and of the Council, repealing Reg. 1260/1999/EC								308.041	in OJ
HEADING 2 - Preservation and management of natural resources
AGRICULTURE: DIRECT AIDS AND MARKET SUPPORT (before transfer to rural development)		45.760	46.217	46.680	47.146	47.616	48.093	48.574	330.086
	p.m. CAP (Brussels ceiling + BG/RO)	46.163	47.273	47.866	48.463	49.065	49.803	50.544	339.177	CNS/2006/0083
COM(2006) 241 final AGRI, Lutz	Proposal for a Council regulation laying down rules for voluntary modulation of direct payments provided for in Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, and amending Regulation (EC) No 1290/2005									Procedure ended, publiched in OJ
	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013
L 095 05.04.2007	Final legislative act : Council Regulation (EC) No 378/2007, amending Regulation (EC) No 1290/2005	50.027
RURAL DEVELOPMENT (before transfer from market expenditure)		11.366	11.308	11.245	11.211	11.162	11.111	11.058	78.461
COM(2004) 490 final	Proposal for a Council Regulation on support for rural development by the EAFRD	11.759	12.235	12.700	12.825	12.952	13.077	13.205	88.753	CNS/2004/0161
AGRI, Schierhuber	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, publiched in OJ
L 277 21.10.2005	Final legislative act : Regulation 1698/2005 of the Council on support for rural development by the EAFRD
COM(2004) 489 final	Proposal for a Council Regulation on the financing of the common agricultural policy									CNS/2004/0164
AGRI, Schierhuber	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, publiched in OJ
L 209 11.08.2005	Final legislative act : Council Regulation 1290/2005/EC on the financing of the common agricultural policy
EUROPEAN FISHERIES FUND		913	941	970	991	1.015	1.038	1.062	6.931
COM(2004) 497 final	Proposal for a Council Regulation - European Fisheries Fund	655	678	701	713	726	745	745	4.963	CNS/2004/0169
PECH, Casa	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, publiched in OJ
L 223 15.08.06	Final legislative act :Council Regulation 1198/2006/EC on the European Fisheries Fund								3.849
COM(2005) 117 final PECH, Stihler	Proposal for a Regulation establishing Community financial measures for the implementation of the Common Fisheries Policy and in the area of the Law of the Sea	375	375	375	375	375	750		2.625	CNS/2005/0045
	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, publiched in OJ
L 160 14.06.2006	Final legislative act : Council Regulation 861/2006/EC								2.671
LIFE+		241	261	282	300	319	340	363	2.105
COM(2004) 621 final	Proposal concerning the Financial Instrument for the Environment (LIFE +)	245	268	292	313	334	357	381	2.190	COD/2004/0218
ENVI, Isler-Beguin	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	240	259	281	299	318	340	362	2.098	Procedure ended, publiched in OJ
L 149 09.06.2007	Final legislative act : Regulation (EC) No 614/2007 of the European Parliament and of the Council								2.143
COM(2004) 431 final	Communication from the Commission to the Council and the European Parliament on Financing Natura 2000									INI/2004/2164
ENVI, Auken	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, publication in OJ
	Final legislative act :									pending
SUB-HEADING 3A - Freedom, security and justice
SOLIDARITY AND THE MANAGEMENT OF MIGRATION FLOWS		292	371	449	496	610	786	1.018	4.022
COM(2005) 123 final LIBE, Kudrycka	Communication from the Commission establishing a framework programme on Solidarity and the Management of Migration Flows for the period 2007-2013	82	98	98	110	110	130		628	Procedure ended and published in OJ
	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013
L 144 06.06.2007   L 168 28.06.2007	Final legislative act : Decision No 573/2007/EC of the EP and of the Council of 23/05/07 establishing the European Refugee Fund for the period 2008 to 2013 Council Decision 2007/435/EC of 25/06/07 establishing the European Fund for the Integration of third-country nationals for the period 2007 to 2013								676825	COD/2005/0049 COD/2005/0047COD/2005/0046 CNS/2005/0048
FUNDAMENTAL RIGHTS AN D JUSTICE		71	75	78	77	78	81	83	542
COM(2005) 122 final LIBE, Segelström	Communication from the Commission establishing for the period 2007-2013 a framework programme on Fundamental Rights and Justice	71	75	78	77	78	81	83	543	COD/2005/0040 2nd reading by Council pendingCOD/2005/0037B EP decision at 2nd reading pending CNS/2005/0039 CNS/2005/0038 Procedure ended and published in OJ
FEMM, Gröner	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013
L 110 27.04.2007   L 058 24.02.2007	Final legislative act : Council Decision 2007/252/JHA of 19/04/07 establishing the specific programme ‘Fundamental rights and citizenship’ Council Decision 2007/126/JHA of 12/02/07 establishing the Specific Programme ‘Criminal Justice’
	OF WHICH
	"Fight against violence (DaphneIII)" (COM(2006) 230 final)	2	3	3					125	COD/2005/0037A Procedure ended
SECURITY AND SAFEGUARDING LIBERTIES		58	67	91	107	133	142	147	745
COM(2005) 124 final	Communication from the Commission establishing a framework programme on "Security and Safeguarding Liberties" for the period 2007-2013	58	67	91	107	133	142	147	745
LIBE, La Russa	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013
L 058 24.02.2007	Final legislative act : Council Decision 2007/124/EC, Euratom of 12/02/07 establishing the Specific Programme ‘Prevention, Preparedness and Consequence Management of Terrorism and other Security related risks’ Council Decision 2007/126/JHA of 12/0207 establishing the Specific Programme ‘Prevention of and Fight against Crime’									CNS/2005/0034CNS/2005/0035 Procedure ended and published in OJ
SUB-HEADING 3B - Citizenship
HEALTH AND CONSUMER PROTECTION		147	178	198	204	209	215	221	1.371
COM(2005) 115 final ENVI, TrakatellisIMCO, Thyssen	Communication from the Commission on Healthier, safer, more confident citizens: a Health and Consumer Protection strategy; and	85	106	124	153	203	257	275	1.203	COD/2005/0042B Procedure ended and published in the OJ COD/2005/0042A 2nd reading by Council pending
	Proposal for a Decision establishing a Programme for Community action in the field of Health and Consumer protection 2007-2013
L 404 30.12.2006	Final legislative act: Decision No 1926/2006/EC of the European Parliament and of the Council of 18 December 2006 establishing a programme of Community action in the field of consumer policy (2007-2013)
EUROPEAN CULTURE AND CITIZENSHIP		190	202	213	217	222	226	231	1.501
COM(2004) 471 final CULT, Gröner	Proposal for a Decision of the European Parliament and of the Council creating the “Youth in action” programme for the period 2007-2013	111	126	128	131	133	141	145	915	COD/2004/0152
COM(2006) 228 final	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	120	123	125	126	128	130	133	885	Procedure ended and published in OJ
L 327 24.11.2006	Final legislative act: Decision No 1714/2006/EC of the EP and of the Council of 15/11/2006								885
COM(2005) 116 final	Proposal for a Decision establishing for the period 2007-2013 the programme "Citizens for Europe" to promote active European citizenship	21	28	30	35	38	40	43	235	COD/2004/004
CULT, Takkula	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended and published in OJ
L 378 27.12.2006	Final legislative act: Decision No 1904/2006/EC of the EP and of the Council of 12/12/2006								215
COM(2004) 469 final	Proposal for a Decision of the European Parliament and of the Council establishing the Culture 2007 programme (2007-2013)	45	47	51	57	62	69	77	408	COD/2004/0150
CULT, Graca Moura	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended and published in OJ
L 372 27.12.2006	Final legislative act : Decision 1855/2006/EC of the EP and of the Council establishing the Culture Programme								400
MEDIA		86	103	107	110	114	116	118	754
COM(2004) 470 final	Proposal for a Decision of the European Parliament and of the Council concerning the implementation of a programme of support for the European audiovisual sector (MEDIA 2007)	105	112	133	150	171	184	200	1.055	COD/2004/0151
CULT, Heironimi	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, published in OJ
L 327 24.11.2006	Final legislative act : Decision No 1718/2006/EC of the EP and of the Council of 15/10/2006								755
RAPID RESPONSE & PREP. INSTRUMENT FOR MAJOR EMERGENCIES		16	18	19	19	20	20	20	132
COM(2005) 113 final	Proposal for a Council Regulation establishing a Rapid Response and Preparedness Instrument for major emergencies	16	25	25	25	25	27	30	173	CNS/2005/0052
ENVI, Papadimoulis	Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, published in OJ
L 071 10.03.2007	Final legislative act : Council Decision 2007/162/EC, Euratom of 5/03/2007 establishing a Civil Protection Financial Instrument								134
HEADING 4 - The EU as a global partner
INSTRUMENT FOR PRE-ACCESSION		1.266	1.396	1.494	1.635	1.798	1.945	2.032	11.565
COM(2004) 627 final	Proposal for a Council Regulation establishing an Instrument for Pre-accession Assistance (IPA)	1.486	1.699	1.806	2.059	2.389	2.543	2.671	14.653	CNS/2004/0222
AFET, Szent-Ivanyi	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, published in OJ
L 210 31.07.2006	Final legislative act : Council Regulation (EC) No 1085/2006 of 17/07/2006 establishing an IPA								11.468
EUROPEAN NEIGHBOURHOOD & PARTNERSHIP INSTRUMENT (ENPI)		1.475	1.515	1.586	1.655	1.757	1.921	2.055	11.967
COM(2004) 628 final AFET, Szymanski L 310 09.11.2006	Proposal for a Regulation on a European Neighbourhood and Partnership Instrument (ENPI)	1.433	1.569	1.877	2.083	2.322	2.642	3.003	14.929	COD/2004/0219
	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	1.475	1.515	1.587	1.655	1.757	1.922	2.056	11.967	Procedure ended, published in OJ
	Final legislative act : Regulation (EC) No 1638/2006 of the EP and of the Council of 24/10/2006								11.181
DEVELOPMENT COOPERATION & ECONOMIC COOPERATION INSTRUMENT (DCEC)		2.122	2.230	2.336	2.440	2.516	2.631	2.777	17.053
COM(2004) 629 final DEVE, Mitchell	Proposal for a Regulation establishing a financial instrument for development co-operation and for economic co-operation (DCECI)	2.462	6.011	6.426	6.897	7.206	7.471	7.756	44.229	COD/2004/0220 and CNS/2006/0807 Procedure ended, published in OJ
	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013	2.149	2.230	2.336	2.440	2.516	2.619	2.763	17.053
L 378 27.12.2006   L 405 30.12.2006	Final legislative act : Regulation (EC) No 1905/2006 of the EP and of the Council of 18/12/2006 establishing a financing instrument for development cooperation Council Regulation (EC) No 1934/2006 of 21/12/2006 establishing a financing instrument for cooperation with industrialised and other high-income countries and territories								17.069
INSTRUMENT FOR STABILITY		246	290	373	409	459	504	598	2.879
COM(2004) 630 final	Proposal establishing an instrument for stability 1	345	460	524	665	743	822	896	4.455	COD/2004/0223
AFET, Beer	Revised proposal: Adaptation following agreement of 17 May 2006 on the Financial Framework 2007-2013									Procedure ended, published in OJ
L 327 24.11.2006	Final legislative act : Regulation (EC) No 1717/2006 of the EP and of the Council of 15/11/2006								524

Working document on the Mid-Term Review of the Multi-Annual Financial Framework - State of Play and Perspectives

1.  At its meeting of 6 March 2008, the Conference of Presidents decided to authorise the Committee on Budgets to draft an initiative report on the mid-term review of the 2007-2013 financial framework. Six committees have indicated the will to deliver an opinion (AFET, DEVE, CONT, ITRE, REGI and AGRI).

2.  In view of the INI report, the rapporteur is presenting a second working document with updated considerations on the mid-term review exercise in the current political and institutional context and possible options.

1. Achievements so far

3.  Three years have passed since the conclusions of the European Council of December 2005 "invited the Commission to undertake a full wide-ranging review covering all aspects of EU spending, including the Common Agricultural Policy, and resources, including the UK rebate, and to report in 2008/2009".

4.  Two declarations contained in the Interinstitutional Agreement of 17 May - declaration N° 1 on the assessment of the functioning of the IIA and declaration N° 3 on the review of the IIA - reflect these conclusions, involving the European Parliament. The "review exercise" would therefore have three components with a precise calendar:

2008-2009	Proposals by the Commission
End of 2009	Assessment of the IIA
2010-2011	Mid-term evaluation of legislation

5.  The IIA of 17 May 2006 on budgetary discipline and sound financial management and the 2007-2013 Multiannual Financial Framework (MFF) have been in force for almost three years. A number of significant modifications have proved necessary and a solution has been found in the context of the 2008 and 2009 annual procedures, in line with the three pillars developed by Parliament in its resolution of May 2006[4]:

–       matching political priorities and financial needs;

–       modernising the budget structure;

–       improving the quality of implementation of the EU budget.

6.  In its resolution on the conclusion of the IIA, the European Parliament stressed that "the agreement reached by the three institutions on 4 April 2006 was the only compromise it could achieve within the magnitude of the negotiations and acknowledged that a number of deficits are still unresolved from the outcome of the negotiations and considered that these deficits should be addressed in the 2008-2009 review and, where possible, in the course of the annual budgetary procedures".

7.  In September 2007, the rapporteur presented a working document[5] in which he considers that the review should contain three pillars.

- the resolving of the left-overs which could not be sufficiently achieved in the negotiations of the current MFF,

- an assessment of the mid-term evaluation of the new programmes as foreseen in legislation and an analysis of the agreed reforms.

- the preparation of the next MFF after 2013.

8.  The proposal to make the necessary adjustments until 2015 based on a "sufficient and ambitious review" was also considered. This option would imply a prolongation of the current MFF until then, to ensure a phase-in with the mandates of the Parliament and the Commission.

9.  Moreover, on several occasions, and notably at the conference of 12 November last, the rapporteur gave a definition of the review, stressing that a distinction should be made between a review of certain programmes within the current MFF, including procedures to improve the quality of implementation, and the preparation of the next MFF after 2013:

10.  The deficits identified in 2006 have already appeared in the second year of the MFF (2007/B'2008) after the Member States agreed to follow the way paved by the European Parliament and endorsed by the Commission to provide an appropriate Community funding for Galileo and the EIT (under heading 1a). In the third year, due to the chronic under-financing heading 4, a top-up of the Emergency Aid Reserve was decided to allow the EU contribution to the Food Facility instrument against soaring food prices in the world.

11.  On 26 November 2008, the Commission adopted a proposal to revise the ceiling of heading 1a by an amount of € 5 billion as part of the EU Recovery Plan of € 30 billion to be mobilised at EU level to face the economic and financial crisis.

12.  All in all, at the beginning of 2009, a total amount of € 2.96 billion has been added to the financial framework, as agreed by the three institutions in May 2006.

when	what	how much (billion €)
2007	Galileo + EIT	1.6 revision 0.6 flexibility
2008	Food Facility	0.42 flexibility 0.34 top-up of Emergency Aid Reserve
Total of additional money		2.96

13.  The financial and economic crisis will have an impact on the Member States' GNIs, which will decrease over the coming years. The GNI being the main component of the own resources (65 %), the EU budget might be put under pressure should the deflator of 2% foreseen by article 16 of the IIA[6] be contradicted by the economic forecasts.

14.  The 2007-2013 MFF has allowed for the starting or renewal of the major part of EU legislation. The legal acts foresee a mid-term evaluation of the programmes. Some of them started in 2007, others were delayed. This means that no useful assessment can be made before 2010 at the earliest.

2. Recent institutional developments

· The Commission's initiatives

15.  On 3 November 2008, the Commission hosted a Conference "Reforming the Budget, Changing Europe"[7], which was opened by President Barroso, President Pöttering and Commissioner Grybauskaite, with more than 600 registered participants. Moreover, a number of MEPs participated in round tables, among whom the chairman of the Committee on Budgets and the standing rapporteur on own resources. The conference marked the first phase of the review process as foreseen by the Commission. The Commission had launched the consultation in September 2007. In total, 305 contributors submitted 284 different contributions:

94 contributions from the public/governmental sector, of which 26 from Member States;

55 contributions from NGOs;

41 contributions from various private sector interest groups and social partners;

38 contributions from universities and academic experts;

35 contributions from individual citizens in 13 Member States;

21 other contributions (which could not be classified).

16.  In his letter of 18 December 2008 to President Pöttering, the President of the Commission writes:

"The conference showed the widespread recognition of the importance of this issue providing a platform for new ideas and new analysis of the emerging trends. Together with the contributions from the public consultation, it constitutes an important basis for our further work."

17.  The main conclusions of the consultations are summarised in the Commission document [8]

- Responsiveness to changing needs: Many contributors see the EU budget as a result of political trade-offs rather than a well grounded allocation decision to promote European objectives. The EU budget should be policy-driven and based on sound analysis of the added value of EU spending. The Commission should identify where the limited financial resources available can be used to best effect.

- The need for more flexible instruments enabling quick decisions to support new initiatives although too much flexibility could jeopardize the stabilizing function of the MFF.

- The right balance between the need for stability and the need for flexibility within the MFF: arguments in favour of a shorter period (5 years) were invoked to better align the EU budget to changing needs

- Added value of EU spending, notably to face the predominant challenge of globalisation through improving Europe's global competitiveness, ensuring energy supply, promoting a knowledge and service economy adapting to demographic trends through a balanced migration policy and addressing security threats, maintaining the social model.

- Guiding principles must be the "European added value" based on subsidiarity and proportionality principles.

- Priorities indicate widespread support for re-orientation with many contributions advocating reductions in spending on agriculture (mainly 1st pillar) and increased spending on research technologies, innovation and energy. Cohesion receives strong support despite diverging opinions on how it should be reformed, while putting emphasis on the reduction of regional disparities.

- Concerning own resources, the contributions express a need for a reform in favour of a system which is fair, effective, simple, transparent, equitable and sustainable. Although alternative models are mentioned, the GNI resource seems to be the most popular option with an elimination of existing corrections.

18.  Step 2 of the Commission process will contain an outline of the main orientations that should design the next financial framework, also based on the outcome of the conference.

19.  Although the calendar is not yet confirmed, these proposals might be the last ones of this Commission and could therefore be presented in the autumn of 2009, still in line with the calendar of the IIA. The follow-up will then belong to the new Commission and the new Parliament.

20.  Although a significant number of Member States contributed to the consultation with some extensive and detailed proposals, the institutional development linked to the ratification process of the Lisbon Treaty, to the European elections, to the setting-up of the new Commission and to national elections in some countries will most likely occupy the scene of the Member States' agenda until the second part of 2009.

21.  However, in a recent press article published in the main newspapers of the Union, both the Czech and Swedish presidencies indicate a common will to address the issue of the review of the EU budget all over the year 2009 with an objective which still needs to be clarified.

· The impact of the Lisbon Treaty

22.  According to points 1-4 of the conclusions of the European Council of December 2008, the Irish referendum could be completed by the end of the term of the current Commission. Under such hypothesis, the Lisbon Treaty could enter into force at the beginning of 2010.

23.  The new Treaty will give the European Union a number of new compentences, including a new budgetary procedure, whose consequences might be reflected in new policies/programmes for which appropriate funding might be necessary to comply with the new legal bases. They concern mainly headings 1a (Space and research policy, youth, sport, public health), 3b (judicial cooperation) and 4 (humanitarian aid, European External Action Service). Two of these headings (1a and 4) have already proved to be under-financed under the current MFF.

3. Conclusions and options

24.  The rapporteur considers that a number of uncertainties linked to the current political, economic and institutional context such as

- the European elections;

- the nomination of the new Commission;

- the preparatory phase of the new Irish referendum: outcome of the ratification process;

- the possible entry into force of the new Treaty and the budgetary consequences of a non-ratification;

- the political impact of the financial and economic crisis and the possible consequences on the EU budget on an annual and multiannual basis;

are major challenges which do not allow to take detailed positions aiming at an ambitious review at the time the initiative report has to be presented.

25.  However, he considers that this Parliament has made a huge investment, notably through the work of its Temporary Committee on Policy Challenges and Budgetary Means, as well as the annual budgets and the legislative work which followed. Therefore, the INI report should also reflect the achievements made so far and highlight the deficits still existing, as a legacy from this Parliament to the next one.

· Possible options for the INI report

Option 1

26.  The report could:

- anticipate the impact of the Lisbon Treaty on EU policies, including quantified aspects and identify the needs for an ambitious review within the current MFF;

- draw political conclusions from the Budget Review Conference and pave the way for the Commission proposals to come, finding solutions to problems to be solved within the current MFF and after;

- give a political vision of what could be the next MFF, based on the past experience.

Option 2

27.  The report could:

- take note of the current political and institutional context;

- consider that making proposals at this stage could be counter-productive;

- wait for the Commission proposals to be examined by the new Parliament.

Option 3

28.  The report could develop a three-step approach:

1st step:

- recall that the current MFF was not as ambitious as the Parliament could have expected;

- recall that it has allowed for a continuity of EU legislation whose mid-term assessment will only be made later (2010-2011);

- stress that the review foreseen by the Declaration n° 3 of the IIA is an ongoing process since the IIA contains the necessary provisions to adjust the MFF when necessary (flexibility, revision, top-up) and that these instruments have been activated every time needed (Galileo, Food Facility, Recovery Plan ?)

- indicate some major principles which could be taken over as a working basis by the new Parliament, such as:

- avoid the "Christmas tree approach";

- concentrate the spending on a few main areas under the current ceilings;

- apply the criteria of the European added value, in line with the principles of subsidiarity and proportionality;

- increase the functioning capacities, notably flexibilities within and across headings. An option could be to use the possibilities offered by Declaration n° 1 of the IIA (see below) to provide more flexibility to allow the financing of some high political priorities (energy, broadband). This option would, moreover, give the European Parliament the opportunity to take some initiative and to anticipate further Commission proposals.

"In relation to Point 7 of the Interinstitutional Agreement, the Commission will prepare a report on the functioning of the Interinstitutional Agreement by the end of 2009 accompanied, if necessary, by relevant proposals."

2nd step:

- In case of the ratification of the Lisbon Treaty, proposing adjustments linked to the challenges and new policies foreseen by the Treaty

3rd step:

- Prepare the negotiations on the next MFF (in the hands of the new Parliament), taking on board the framework of the existing Treaty as well as the result of the mid-term evaluations of the legislative programmes.

• [1]  P6_TA-PROV(2006)0570
• [2]  SEC(2007)42/2-05-1772
• [3]  Texts adopted P6_TA (2006)0210
• [4]  P6_TA(2006)0210, IIA on budgetary discipline and sound financial management (para. 1)
• [5]  PE 392.301_V.03.00
• [6] 
• [7]  The proceedings of the conference can be found on the Commission website http://ec.europa.eu/budget/reform/index_en.htm
• [8]  SEC(2008) 2739

OPINION of the Committee on Foreign Affairs (24.2.2009)

for the Committee on Budgets

on the Mid-Term Review of the 2007-2013 Financial Framework
(2008/2055(INI))

Rapporteur: Michael Gahler

SUGGESTIONS

The Committee on Foreign Affairs calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1. Supports the three-step approach taken by the Committee on Budgets towards the mid-term review, and underlines that the chronic under-financing of Heading 4 needs to be addressed as a priority under the necessary adjustments of the current Multi-Annual Framework (MFF), including by envisaging adequate funding for the EU External Action Service;

2. Recalls the Commission's undertaking to present, within the framework of the review, an evaluation of the situation of Heading 4, and urges the Commission to propose, on this basis, short-term solutions within the current MFF as well as options for the new MFF, which would financially reinforce Heading 4 and remove its chronic under-financing, thus enabling the European Union to meet its external action obligations;

3. Points in particular – given the character of actions to be financed under Heading 4 – to the need to establish a flexibility mechanism which would enable the EU to react to unforeseen situations without weakening the funding for ongoing policies and programmes in the external affairs area and while fully respecting the rights of the budgetary authority;

4. Stresses its intention to concentrate on the need to find short- and long-term solutions for Heading 4 in the context of the appointment and the approval of the new Commission;

5. Approves of further deepening of the European Neighbourhood Policy into the Eastern Partnership and the Union for the Mediterranean; points however to the urgent need to provide the European Neighbourhood and Partnership Instrument with sufficient means so as to make these two frameworks viable and credible for participating partners; reiterates that the stability, security and prosperity of the whole European continent is at stake in this context;

6. Points to the challenges faced by the EU in the area of energy security and urges the Commission to envisage adequate means allowing the EU to mitigate its vulnerability in this area;

7. Points to the need to close the gap between the current focus of the financing instrument for development cooperation (DCI) on development assistance and the Millennium Development Goals, on the one hand, and the need to support cooperation with third countries outside the ambit of official development assistance (ODA), on the other; therefore calls on the Commission to propose relevant amendments to the current legislation and to envisage, within the next MFF, a resource of permanent and adequate funding for non-ODA cooperation with development countries;

8. Underlines, with a view to the preparation of the new MFF, that any sustainable review of expenditure has to be closely linked to the reform of revenue, so as to furnish the European Union with necessary means to fulfil its role and to meet the challenges lying ahead; is of the view that the next financial framework should run concurrently with the Commission's and the Parliament's mandates, so as to strengthen its democratic legitimacy; further underlines its view that all financial means for external action should be integrated into the EU budget, in particular the European Development Fund and the ATHENA mechanism.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted	24.2.2009
Result of final vote	+: –: 0:	16 0 0
Members present for the final vote	Klaus Hänsch, Francisco José Millán Mon, Annemie Neyts-Uyttebroeck, Ioan Mircea Paşcu, João de Deus Pinheiro, Pierre Pribetich, Flaviu Călin Rus, Jacek Saryusz-Wolski, Marek Siwiec, Geoffrey Van Orden, Andrzej Wielowieyski, Zbigniew Zaleski
Substitute(s) present for the final vote	Andrew Duff, Glyn Ford, Christoph Konrad, Jean Spautz

OPINION of the Committee on Development (18.2.2009)

for the Committee on Budgets

on Mid-term Review of the 2007-2013 Financial Framework
(2008/2055(INI))

Rapporteur: Thijs Berman

SUGGESTIONS

The Committee on Development calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Observes that patterns of expenditure under the current Financial Perspective show considerable variations in levels of implementation between different headings of the Multiannual Financial Framework (MFF) with significant underspends in some headings (for example in heading 2) while margins are completely exhausted in others (for example in heading 4); considers that this situation highlights the need for greater flexibility in transferring appropriations between headings;

2.  Draws particular attention to the problem of the precarious financing situation in heading 4 resulting from newly-arising needs that could not have been foreseen when the MFF was established, such as with regard to Palestine, Kosovo and Georgia; believes that this problem can only be addressed through a comprehensive revision of the MFF leading to increases in the heading 4 ceiling for the period 2010-2013;

3.  Notes that, although new needs resulting from soaring food prices in developing countries were addressed within the framework of the current Financial Perspective, this was a complicated and difficult process which should not be repeated; notes further that new, unforeseen and acute needs in developing countries are likely to arise, including those resulting from turmoil in global financial markets, and humanitarian emergencies resulting from global climate change, which have their greatest impact in lower-income countries;

4.  Points out that the process of democratic scrutiny has revealed the need for a new financing instrument, or modification of an existing instrument, with additional financial resources, to cover actions other than Official Development Assistance in countries covered by the Development Cooperation Instrument (DCI), and that this may only be adequately achieved by an increase in the ceiling of heading 4.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted	17.2.2009
Result of final vote	+: –: 0:	24 0 0
Members present for the final vote	Alessandro Battilocchio, Thijs Berman, Thierry Cornillet, Corina Creţu, Alexandra Dobolyi, Fernando Fernández Martín, Alain Hutchinson, Romana Jordan Cizelj, Filip Kaczmarek, Glenys Kinnock, Maria Martens, Gay Mitchell, Luisa Morgantini, José Javier Pomés Ruiz, José Ribeiro e Castro, Toomas Savi, Frithjof Schmidt, Jürgen Schröder, Feleknas Uca
Substitute(s) present for the final vote	Miguel Angel Martínez Martínez, Manolis Mavrommatis, Renate Weber, Gabriele Zimmer
Substitute(s) under Rule 178(2) present for the final vote	Emilio Menéndez del Valle

OPINION of the Committee on Budgetary Control (18.2.2009)

for the Committee on Budgets

on the mid-term review of the 2007-2013 financial framework
(2008/2055(INI))

Rapporteur: Herbert Bösch

SUGGESTIONS

The Committee on Budgetary Control calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Recalls that the Commission, as the European Union's executive authority, has to give account of its achievements; therefore invites the Commission to establish an appropriate balance between its financial audits (legality and regularity) and performance audits (value for money audits);

2.  Notes that 'shared management' is a direct consequence of Article 5 of the EC Treaty and the result of the absence of a genuine "EU administration"; recalls that under the present arrangements, there is a high risk that purely national considerations may take precedence over common EU interests; takes the view that it is necessary to establish an EU accreditation of national bodies carrying out tasks under shared management;

3.  Draws attention to its repeated calls for national management declarations as a means of strengthening national accountability; regrets the Commission's inadequate efforts to create positive conditions for the introduction of such an instrument; believes that the Commission's failure to act in this regard is in contradiction with the objective that the budget shall "be managed to the highest standards", as stated in its Communication of 12 September 2007 entitled "Reforming the budget, changing Europe" (SEC(2007)1188, page 5);

4.  Believes that if full accountability cannot be established for a certain policy, then that policy must be modified or possibly abolished; is convinced that full acceptance of responsibility for implementation by the body charged with it should also be an indispensable part of the policy decision, along with design, objectives, level of investment and the specific legal act;

5.  Welcomes the introduction by the European Court of Auditors (ECA) of the notion of 'tolerable risk of error' in its Opinion No 2/2004[1]; invites the Commission to present to the budgetary authorities the various options detailing the cost of controls for different levels of error rate; believes that a 'tolerable risk of error' will have to be differentiated according to the nature, complexity and management methods of programmes;

6.  Believes that the quality of the Commission's cost calculation should be assessed by the ECA.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted	17.2.2009
Result of final vote	+: –: 0:	9 0 1
Members present for the final vote	Herbert Bösch, Paulo Casaca, Antonio De Blasio, Szabolcs Fazakas, Ingeborg Gräßle, Nils Lundgren, Ashley Mote, Jan Mulder
Substitute(s) present for the final vote	Valdis Dombrovskis
Substitute(s) under Rule 178(2) present for the final vote	Roselyne Lefrançois

• [1]  OJ C 107, 30.4.2004, p. 1.

OPINION of the Committee on Industry, Research and Energy (9.10.2008)

for the Committee on Budgets

on Mid-term Review of the 2007-2013 Financial Framework
(2008/2055(INI))

Rapporteur: Paul Rübig

SUGGESTIONS

The Committee on Industry, Research and Energy calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.   Strongly welcomes the mid-term review of the 2007-2013 financial framework and the Commission's public consultation on budget reform; believes that the budget must be a key instrument for ensuring the efficient realisation of EU policy objectives;

2.    Considers that an effective orientation of the EU cohesion policy towards these objectives will be the means to deliver sustainable convergence in the regions, underlining the need to encourage much faster rates of absorption of the Community funds granted;

3.   Since the Union's policy priorities are in a state of constant evolution as a result of globalisation, demographic change, technological development, the need to ensure secure and diverse sources of energy supply, and climate change, believes that it is essential that EU spending is re-evaluated and optimised in order to achieve the highest value added and most effective EU action;

4.   Believes that this mid-term review is of the utmost importance for the EU budget to better reflect citizens priorities, in the context of the EU ambition to become a competitive, knowledge-based and efficient global economy; considers that this implies a significant further increase in resources devoted to research and innovation, climate and energy policies, infrastructure, education and training;

5.  Stresses that the main energy challenges facing the EU as well as the firm objective to cut worldwide emissions necessitate the development of affordable, low-carbon and renewable energy technologies; in this respect believes that the budget should allow for sufficient financial means to reach the goals in the European Strategic Energy Technology Plan; notes that it should not be financed through redeployment of funds made available for Community programmes for research and innovation;

6.   Calls on the Commission to analyse how new financing possibilities can be used to speed up renewable projects of European interest, with specific reference to:

(i)   the development of the necessary network infrastructure to develop off-shore wind and marine energy potentials;

(ii)  the development of interconnectors with Mediterranean countries in order to fully exploit the vast potential of wind and solar thermal electricity potential in southern EU and neighbouring countries;

(iii)  the take-up of biomass based district heating and cooling networks in combination with a major programme of retrofitting of the existing building stock;

7.   Highlights that energy efficiency is a vital means of tackling energy poverty and the most cost-effective way of delivering quick returns in the fight against climate change and has the greatest cost-effective potential for emission reduction in the medium-term; calls on the Commission to consider the best way for the EU budget funds to appropriately complement Member State action and other policy tools on energy efficiency, and calls for additional resources to be allocated to energy efficiency initiatives for both the production and the consumer side; believes that greater investment is particularly needed to make the building sector more energy efficient;

8.   Strongly emphasises that research and innovation are central to achieving a dynamic knowledge-based EU economy driven by growth and job creation; stresses that an increase in the availability of funding is a prerequisite for a successful research and innovation policy; believes that the areas in which funding is needed have changed as the world has changed; therefore urges R&D funding to be focused on future market opportunities and new global challenges such as environmental technologies and energy;

9.    Believes that research of the highest scientific quality increasingly requires investment in research infrastructure; takes the view that the seventh framework programme's budget for research infrastructure during the 2007-2013 period matches neither the needs nor potential of European research; believes that this sector must become an important priority ahead of the mid-term review of the financial framework;

10. Recalls that SMEs generate more than half of EU's GDP, representing 99% of all EU undertakings, providing two thirds of all jobs in the EU and thus comprising the biggest sector of EU economy; highlights that the Lisbon objectives can only be achieved through a targeted and well-resourced SME policy that addresses financing, regulation and support for increased entrepreneurship and participation by SMEs in the spheres of research, innovation, technologies and public procurement; considers the planned Small Business Act a very important instrument in supporting SMEs and believes that this will require an appropriate increase in resources;

11. Calls on the Commission to evaluate the effectiveness and value added of the Competitiveness and Innovation Framework Programme (CIP) and other measures which support entrepreneurship and innovation; believes that there is a need for continued and increased support and resources for, and better integration of, such programmes which provide the key financial instruments for the advancement of SMEs in the EU; emphasises that in terms of innovation SMEs should be encouraged to coordinate their efforts with universities and research centres in order to stimulate knowledge transfer and to commercialise research results quickly;

12. Points out that energy efficiency and climate change are considered to be key priorities for the EU but are not sufficiently and coherently reflected in the EU budget; considers that the creation of a dedicated budget line or specific sub-headings for investments in climate change mitigation and adaptation would be a possible improvement, in addition to integrating climate change objectives into existing programmes;

13.  Underlines the importance of the CIP and of the JEREMIE initiative for closing the market gaps on SME finance and calls for the targeting of available resources towards the real needs of SMEs, i.e. to promote new mezzanine instruments; notes that SMEs are particularly hard hit by late payments, therefore delays have to be avoided by finding an efficient and transparent monitoring scheme to ensure that payments are effected within a specified period;

14.  Notes that high priority should be given to an effective management of EU spending; notes further that it is particularly important that allocations of funds are based on objective criteria and on a continuous evaluation of their performance; considers that strong and efficient Public-Private Partnerships (PPP) should be fostered in this respect;

15. Points out that financial support is needed for the development of unbundling Trans-European Energy Networks which play an important role in strategic energy policy and for the development of Trans European e-services with particular regard to data security; in line with EU climate change objectives, believes that financing for Trans-European Energy Networks should be focused on low-carbon infrastructure such as smart energy networks to increase the efficiency, flexibility, safety, reliability and quality of the EU electricity and gas systems;

16. Stresses the need for financial resources to be deployed for an EU regulator that deals with nuclear security and safety and establishes and monitors unified rules, processes and standards for the handling of nuclear materials and consequential accidents;

17.  Notes that the EU Emissions Trading Scheme (ETS) will be considerably revised; points out that businesses affected by ETS auctioning should be involved in the decision on how revenues from auctioning are to be utilised;

18. Observes that, particularly in the areas of support for research and development and for SMEs, the most effective and efficient forms of support can be from loans combined with grants; believes that the budget review should consider methods of innovative financing to support growth;

19. Emphasises the importance of an improved co-ordination between the EU and third countries, especially with regard to the creation of a worldwide partnership system and the stimulation of knowledge transfer with countries with strategic importance to improve the EU´s security of energy supply; believes that this goal should be reflected in the budget.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted	7.10.2008
Result of final vote	+: –: 0:	35 2 0
Members present for the final vote	Jan Březina, Jerzy Buzek, Jorgo Chatzimarkakis, Giles Chichester, Dragoş Florin David, Pilar del Castillo Vera, Den Dover, Nicole Fontaine, Norbert Glante, András Gyürk, David Hammerstein, Mary Honeyball, Ján Hudacký, Romana Jordan Cizelj, Werner Langen, Pia Elda Locatelli, Eluned Morgan, Angelika Niebler, Reino Paasilinna, Atanas Paparizov, Francisca Pleguezuelos Aguilar, Miloslav Ransdorf, Herbert Reul, Teresa Riera Madurell, Paul Rübig, Britta Thomsen, Patrizia Toia, Claude Turmes, Nikolaos Vakalis, Adina-Ioana Vălean
Substitute(s) present for the final vote	Manuel António dos Santos, Juan Fraile Cantón, Neena Gill, Pierre Pribetich, Silvia-Adriana Ţicău, Vladimir Urutchev
Substitute(s) under Rule 178(2) present for the final vote	José Javier Pomés Ruiz

OPINION of the Committee on Regional Development (27.1.2009)

for the Committee on Budgets

on the Mid-term Review of the 2007-2013 Financial Framework
(2008/2055(INI))

Rapporteur: Rumiana Jeleva

SUGGESTIONS

The Committee on Regional Development calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

A. whereas EU cohesion policy remains a crucial pillar in the process of European integration, and plays an active role in reducing inequalities and development deficits;

1.  Considers that, for many years, EU regional policy has demonstrated to the European public its unique European added-value by effectively promoting economic and social cohesion across the EU, whilst at the same time contributing to the achievement of the objectives of the Lisbon Strategy for growth and jobs and the Gothenburg objectives for sustainable development; opposes, therefore, any attempt to re-nationalise this Community policy; reiterates its long-standing position that cohesion policy should relate to the whole of the territory of the EU and that the larger part of the financial resources available should be concentrated on the needs of less-developed regions;

2.  Considers it indispensable that adequate funding be guaranteed under the new multiannual financial framework after 2013, so as to enable cohesion policy not only to continue carrying out successfully its traditional tasks, but also to deal with a number of new global challenges with significant territorial impact, such as climate and demographic change, depopulation, adaptation to globalisation, rehabilitation of rural areas, energy efficiency and urban concentration, as detailed in the Commission's Fourth Report on Economic and Social Cohesion (COM(2007)0273); therefore takes the view that the allocation of no more than 0.35% of the EU’s GDP will be far from sufficient to finance this policy;

3.   Considers that sufficient resources need to be allocated to EU cohesion policy for the Community to achieve real convergence and successfully tackle regional and intra-regional disparities and persisting inequalities in fields such as employment, transport infrastructure, accessibility, innovative capacity, as well as the technological divide between the more-developed and less-favoured regions; stresses, in particular, the role of cohesion policy in helping regions, such as mountains, islands, sparsely populated and border regions, to offset their permanent geographic and structural handicaps; also considers a solid and properly financed cohesion policy to be an essential condition for successfully assimilating future enlargements;

4.  Stresses the need, while taking action against fraud and irregularity and ensuring the adequacy of financial control systems, to simplify the procedures for the implementation of Structural Funds, especially the management and control systems; notes that the complexity of the system is to a certain extent responsible for the poor absorption by the Member States of the available resources; welcomes the Commission's recent proposals for the review of EU cohesion policy in the context of the financial crisis, which includes concrete proposals for simplifying relevant procedures and eagerly awaits the last package of Commission's proposals on simplification measures, foreseen for the beginning of 2009; considers that these measures should be implemented immediately, and that they should ensure a clear division of responsibilities and competences between the EU, the Member States and the regional and local authorities;

5.  Notes that the Commission has for the first time engaged in a systematic evaluation of the effectiveness of the 2000-2006 operational programmes; awaits with great interest the results of this evaluation, which is a serious attempt to measure the effectiveness of cohesion policy actions; notes, however, that it is extremely difficult at this stage to fully appreciate the positive effects that cohesion policy has had in reality, as the full impact of the measures taken will not be discernable until later and cannot be measured in purely economic terms;

6.  Stresses that cohesion policy must not be seen as merely an instrument for achieving the objectives of other sectoral policies, since it is a Community policy in its own right offering substantial value added;

7. Acknowledges that the current financial crisis has significantly changed the economic and financial situation in many Member States; notes that, as a result of this crisis, national investment priorities may change and, for that reason, several operational programmes may need to be adapted; underlines the fact that Member States may also face liquidity problems that prevent them from ensuring the payment of national contributions towards the implementation of structural actions and programmes; urges the Commission to work closely with the Member States in a joint effort to re-launch the European economy; 8.Welcomes, in this context, the Commission's proposals to amend the existing legislative framework for the Structural Funds 2007-2013 with the aim of simplifying the system, as well as accelerating and facilitating payments to Member States; considers the proposals to be an important first step towards assisting Member States in their efforts to combat the negative effects of the current economic crisis; welcomes, accordingly, the Commission's decision to extend the deadline for the settlement of the accounts for 2000-2006 operational programmes;

9.Stresses the fact that the ultimate purpose of EU funding is to improve the quality of life of Union citizens and thus calls upon the Member States to ensure optimal management of EU funds; with this in mind, recalls the need for good governance and the importance of combating fraud, corruption and organised crime, which directly violate the principles underpinning the EU budget; therefore welcomes the efforts of OLAF in this regard;

10. In the context of territorial cohesion, recommends significant reinforcement of the European Territorial Cooperation Objective in both policy and financial terms and proposes that extra funding be ensured for the next programming period; welcomes the Commission's recent efforts to strengthen territorial cooperation by creating trans-national cooperation structures for countries that face similar problems; notes with great interest the Baltic Sea strategy, which shows that similar strategies might also be considered for other regions, such as the Black Sea Strategy, or other types of territories in the future;

11. Urges the Commission to propose a comprehensive system of transitional assistance for the period post 2013 for regions that will exceed the 75% GDP threshold; considers it of utmost importance to deal separately with these "transition regions" as they will still be in a transitional phase of their development and should, therefore, have the benefit of a more clearly defined status, transparent rules and greater certainty as regards receiving transitional support from the Structural Funds during the next programming period; considers that transitional arrangements should also be made for Member States leaving the Cohesion Fund, in order to consolidate the convergence levels achieved;

12. Notes with interest the debate on planning the next financial framework over a five-year period instead of the current seven-year period, so that it will coincide with the mandates of the European Commission and the European Parliament; is nevertheless aware of the great difficulties of implementing the multi-annual Structural Funds programmes over such a short programming period; proposes that cohesion policy should then be planned over a ten-year period, with significant revision of the legislative and operational frameworks after the first five years;

13. Emphasises the positive effects of the new initiatives Jessica, Jaspers and Jeremie that are financed by the European Investment Bank and other institutions and calls for the extension of these initiatives in the next financial framework;

14. Recalls that, during the negotiations for the Regulations on Structural Funds 2007-2013, Parliament put forward in the context of an informal trilogue, a proposal for the reallocation of unspent resources that are lost because of the N+2 / N+3 rule to the Community cohesion budget (Heading 1b) and to other operational programmes with a better record of absorption by creating a new Community performance reserve, which would be a mechanism for rewarding progress; greatly regrets that this proposal was not accepted at the time by the Council; calls on the Commission, in its forthcoming mid-term review, to respond to Parliament’s proposal and recommends it to start by making an analysis of the impact of applying this instrument in practice.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted	20.1.2009
Result of final vote	+: –: 0:	44 0 1
Members present for the final vote	Emmanouil Angelakas, Stavros Arnaoutakis, Elspeth Attwooll, Jean Marie Beaupuy, Rolf Berend, Jana Bobošíková, Victor Boştinaru, Wolfgang Bulfon, Giorgio Carollo, Antonio De Blasio, Gerardo Galeote, Iratxe García Pérez, Eugenijus Gentvilas, Monica Giuntini, Ambroise Guellec, Filiz Hakaeva Hyusmenova, Mieczysław Edmund Janowski, Rumiana Jeleva, Gisela Kallenbach, Tunne Kelam, Evgeni Kirilov, Miloš Koterec, Constanze Angela Krehl, Florencio Luque Aguilar, Jamila Madeira, Sérgio Marques, Yiannakis Matsis, Miroslav Mikolášik, James Nicholson, Jan Olbrycht, Maria Petre, Markus Pieper, Pierre Pribetich, Giovanni Robusti, Wojciech Roszkowski, Grażyna Staniszewska, Andrzej Jan Szejna, Lambert van Nistelrooij, Oldřich Vlasák, Vladimír Železný
Substitute(s) present for the final vote	Domenico Antonio Basile, Madeleine Jouye de Grandmaison, Zita Pleštinská, Samuli Pohjamo, Richard Seeber

OPINION of the Committee on Agriculture and Rural Development (21.1.2009)

for the Committee on Budgets

on Mid-term review of the 2007-2013 Financial Framework
(2008/2055(INI))

Rapporteur: Esther de Lange

SUGGESTIONS

The Committee on Agriculture and Rural Development calls on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Underlines that agricultural policy is the most Communitised policy of the European Union, as a result of which agricultural spending accounts for a considerable percentage of the total EU budget, even though spending on agriculture has been declining in relative terms;

2.  Regrets that the Committee on Agriculture and Rural Development of the European Parliament is called upon to express an opinion on the mid-term review of the 2007-2013 Financial Framework without having received a communication from the Commission to enable it to ascertain precisely the current financial situation and the initial indicators for the future;

3.  Stresses the difficulty of creating financial perspectives for agriculture and rural development in the Union, particularly as regards market management measures, in the context of a world economic and financial crisis and tension on the market, when prices of raw materials, including agricultural inputs, are increasingly subject to international speculation;

4.  Stresses that those who draw attention to the relatively large proportion of the EU budget which is spent on agriculture mislead public opinion, as farm subsidies account for a negligible amount in relation to the total GDP of the Member States;

5.  Recalls that the ceilings for the common agricultural policy (CAP) are fixed until 2013 and that the reliability of the agricultural budget until 2013 was a basic requirement for accepting the far-reaching CAP reform in 2003 and the subsequent health check in 2008 by the majority of Member States, as long-term planning and security of investment is essential to the agricultural sector;

6.  Stresses that farm prices have fluctuated considerably recently and that those commentators are mistaken who, because of the substantial rise in food prices in recent years consider that there is no longer any need for farm subsidies and that sales of produce are, by themselves, capable of providing farmers with a stable, predictable income;

7.  Notes that, as a result, new priorities within the current financial framework can only be funded by fresh funds or through a reprioritisation within existing programmes and levels of expenditure; stresses, therefore, the increased need to ensure sufficient margins under different categories of the initial budget figures in order to leave room for Parliament's priorities; regrets that during the negotiations on the budget for 2005 too small an amount was allocated to second-pillar measures;

8.  Regrets the high modulation rates agreed by the Member States in the 'CAP Health Check' and calls on the Commission, with a view to the revision of the financial framework, to propose an increase with 'fresh' money in the rural development funds in order to cope with the requirements of this second pillar of the CAP;

9.  Warns, however, that the current margin within the agriculture budget is a temporary phenomenon, as the gradual integration of the new Member States, the volatility of agricultural markets, veterinary and phytosanitary risks, the most recent sectoral or horizontal reforms and other support measures for certain sections of the population, adopted within the framework of the CAP, will make increasing demands on the budget, as a result of which this margin is expected to disappear towards the end of this planning period; stresses, therefore, that no structural use should be made of the current margin;

10.  Calls on the Commission to inform Parliament as soon as possible about the additional funding which it expects will be needed in the field of agriculture if Croatia or other States were to join the EU before 2013 or if fresh expenditure were envisaged within the agricultural guidelines;

11.  Points out that the objectives of the CAP remain unchanged under the Lisbon Treaty: increasing agricultural productivity, ensuring a fair standard of living for the agricultural community, stabilising markets, ensuring the availability of supplies and ensuring that supplies reach consumers at reasonable prices; notes, however, that the successive reforms of the CAP or other Community policies assign new tasks to agriculture in terms of product quality, environmental protection, combating climate change, consumer health or land use planning which entail changes in modes of production and may reduce productivity; stresses that the objectives laid down as part of the sustainability strategy of the European Union must also be taken into account in the EU's agricultural policy;

12.  Observes that preserving such vital natural resources as soil, water, air, the climate and biodiversity remains an objective as stated by the Göteborg European Council (15 and 16 June 2001);

13.  Draws attention to the fact that, in recent times, other major participants in world trade in farm products have stepped up their agricultural policies (e.g. the USA with its Farm Bill);

14.  Believes that a strong CAP of the EU, both in terms of content and of financing, is paramount to achieving these objectives, while guaranteeing a level playing field and transparent food chains on the common internal market, as well as viable rural areas; considers, furthermore, that increasing the resilience of rural areas and improving the quality of life there should be assigned high priority in order to combat migration to conurbations and further urbanisation;

15.  Stresses that the added value of agricultural production is extremely high since it also supplies the processing sector, thereby contributing to economic and social cohesion in the regions and to the EU's balanced development; points out that it is therefore necessary to maintain and where appropriate step up the support received by farmers, since it provides an incentive to increase agricultural production;

16.  Believes that, for the post-2013 framework for the further development of the CAP, the policy measures and their concrete objectives must first be defined, before the necessary budgetary means can be allocated;

17.  Strongly opposes, however, any re-nationalisation of agricultural policies; considers, nonetheless, that, in accordance with the subsidiarity principle, scope should be permitted for the pursuit of regional farm policies by Member States and regional authorities and that Member States and regional authorities should be given the opportunity to respond appropriately to their specific situations by means of their own activities; stresses that the common character of agricultural policy avoids distortion of competition within the internal market and generates savings for European taxpayers;

18. Warns against the threats posed by a possible introduction of co-financing for the first pillar, since its compulsory character can most likely not be guaranteed if one of the national parliaments is unwilling to authorise the funds for national co-financing, resulting in considerable distortion of competition and a de-facto dismantling of the CAP, as mentioned in the letter of the European Commission of 9 June 2008;

19. Stresses that the success and acceptance of the EU's CAP also depend on the elimination of bureaucracy and on limiting regulatory administrative provisions to an acceptable level.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted	20.1.2009
Result of final vote	+: –: 0:	32 1 1
Members present for the final vote	Luis Manuel Capoulas Santos, Giovanna Corda, Jean-Paul Denanot, Albert Deß, Gintaras Didžiokas, Konstantinos Droutsas, Constantin Dumitriu, Ioannis Gklavakis, Lutz Goepel, Friedrich-Wilhelm Graefe zu Baringdorf, Esther Herranz García, Lily Jacobs, Elisabeth Jeggle, Heinz Kindermann, Vincenzo Lavarra, Stéphane Le Foll, Mairead McGuinness, Rosa Miguélez Ramos, James Nicholson, Neil Parish, María Isabel Salinas García, Sebastiano Sanzarello, Agnes Schierhuber, Czesław Adam Siekierski, Alyn Smith, Petya Stavreva, Witold Tomczak, Andrzej Tomasz Zapałowski
Substitute(s) present for the final vote	Esther De Lange, Ilda Figueiredo, Christa Klaß, Roselyne Lefrançois, Jan Mulder, Maria Petre, Brian Simpson, Kyösti Virrankoski

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted	24.2.2009
Result of final vote	+: –: 0:	40   1
Members present for the final vote	Laima Liucija Andrikienė, Richard James Ashworth, Glenn Bedingfield, Reimer Böge, Costas Botopoulos, Daniel Dăianu, Vasilica Viorica Dăncilă, Valdis Dombrovskis, James Elles, Göran Färm, Szabolcs Fazakas, Vicente Miguel Garcés Ramón, Salvador Garriga Polledo, Catherine Guy-Quint, Jutta Haug, Anne E. Jensen, Wiesław Stefan Kuc, Zbigniew Krzysztof Kuźmiuk, Janusz Lewandowski, Vladimír Maňka, Mario Mauro, Alexandru Nazare, Gérard Onesta, Esko Seppänen, Nina Škottová, Theodor Dumitru Stolojan, László Surján, Kyösti Virrankoski, Ralf Walter
Substitute(s) present for the final vote	Juan Fraile Cantón, Vytautas Landsbergis, Esther De Lange, Manolis Mavrommatis, Juan Andrés Naranjo Escobar, Paul Rübig, Jacek Saryusz-Wolski, György Schöpflin, Margarita Starkevičiūtė, Peter Šťastný, Janusz Wojciechowski, Zbigniew Zaleski