President of the European Parliament Josep BORRELL paid tribute to the UK Presidency and recalled that the Prime Minister had twice addressed plenary as well as the meeting of the Conference of Presidents today. He welcomed in particular, the collaboration with the Deputy Prime Minister John Prescott, who he said had become a part of the European Parliament's landscape.
Prime Minister Tony BLAIR welcomed the closed working partnership with the European Parliament although he said "we didn't always agree on every respect". He also paid tribute to Luxembourg Prime Minister Jean-Claude Juncker who he said had "laid the foundations" for the budget agreement.
The Prime Minister said that he would divide his remarks into three parts namely: the budget agreement, the future reform of the budget and the future of Europe after the "no" votes on the Constitution.
On the budget, Prime Minster Blair recognised that people in the European Parliament would have preferred a higher budget settlement, but the Prime Minister said, "it is the best result we could have achieved in the circumstances". He pointed out that there would be a significant transfer from the wealthy countries to the poorer countries. "On the structural and cohesion funds the amount for the EU-10 will increase from €24 billion to €170 billion. The purpose of the budget was to enable enlargement to be a success. My own country has championed enlargement and we need to will the means to make enlargement a success". The budget, he said, was also based on fairness and for the first time, countries of a similar size, would now contribute on the basis of rough parity. There would be a 7.5 % increase for the Lisbon process, the increase in research and development spending could be as high as 75 % by 2013. There was also agreement on the globalisation adjustment fund which would help to finance the effects of globalisation for retraining and relocation.
Prime Minister Blair recalled that in June, he had called for a budget deal, but also called for a long term reform of the entire EU budget. The Commission would now lead the review for 2008. "A top to bottom review on how much we spend and what we spend it on to reach a suitable modern European budget". He recalled that there would have to be a unanimous agreement on reform of the budget.
"One thing we have all learned from the budget negotiations is that we need a reformed budget for the future and the European Parliament can play important role on that. I agree there should be a bigger European budget if it is a reformed budget. The budget negotiations gave me this picture in my mind: it is like a house with many different rooms but all the rooms have been constructed in different eras and to different designs and the results is a building not suitable for the modern world".
On the future of Europe after the "no" votes in France and Holland, it was important to see how Europe could move forward only after the budget had been cleared. "How doe we reconnect Europe to its citizens?" he asked. "It would not be done by concentrating on past achievements rather it would be how we respond to future challenges". Europe would have to face the challenges of globalisation including completing the single market and reaching agreement on the services directive. On innovation, research and technology, Europe would have to face the challenges laid out at the Hampton Court informal summit. We have to continue to champion enlargement, "enlargement is one of the best things that have happened to Europe." Mr Blair welcomed that migration was a focal point of the summit. On terrorism, the Prime Minister welcomed the agreement on the data retention directive saying that the Parliament had played an important role. He said that the EU would continue to play an important role on the world stage citing the WTO talks. Prime Minister Blair also underlined the new development package saying that EU development aid would reach $80 billion by 2010. Finally Mr Blair cited the 7 new missions under the European Security and Defence policy.
In conclusion, Mr Blair said that the Council had delivered a budget and in the long-term there would be radical reform and this was the basis to move forward.
Commission President José Manuel BARROSO said that without an agreement on the Financial Perspective there would have been a "profound crisis" in the EU. Now that a deal had been struck, there were possibly fifty different conclusions in the 25 Member States, if the opposition view in each country was counted. However, in his view a fair overall analysis would show the key point to be that "we have avoided paralysis" and "created conditions for the EU to move forward".
The Commission had fought for a "more ambitious and fairer budget" but it "recognised that in the current circumstances... it was difficult to get anything better". However, "the positive aspect is the future", stressed Mr Barroso. Turning to the review clause under which the EU's finances are to be re-examined in 2008, he said the Member States had given the Commission a clear mandate for an overall review of expenditure, resources and political priorities, and it was this that had saved the negotiations.
The Commission had stated ahead of the negotiations that it had five priorities: more money for the budget, more money for the new Member States, a change to the British rebate, more flexibility in the management of the budget and the inclusion of a review clause. It was not satisfied with progress achieved on all these issues. And it was disappointed that there would not be enough funding for culture, education, youth and citizenship. This would make it "harder to move Europe closer to its citizens".
However, on the review clause, it would carry out its role very seriously, looking at all aspects of the budget, not just the "British cheque and the CAP". And it would do this "with the public" as it was essential to explain "how we get added value from the EU budget", in other words why an EU budget was needed at all. Having stated earlier that the budget deal still required the consent of the Commission and the European Parliament, he stressed the need to conclude a new Interinstitutional Agreement quickly.
Mr Barroso concluded by referring to the WTO talks in Hong Kong, which he said had at least managed to save the Doha round. He wished to point out to all the WTO members that the EU could not deliver progress by itself. For example, the EU had agreed to phase out farm export subsidies by 2013 but only if others did so too.
Political Group Speakers
Noting that Parliament has not yet had its final say on the agreement, Hans-Gert POETTERING (EPP-ED, DE) warned that the compromise reached in Brussels is far from a done deal. "There is no financial perspective yet," he cautioned. "There is a European Council decision [...] and now we have to enter into a negotiation phase". And, as he went on to say, "it is only at the end of that phase that we'll have a financial perspective". The EPP-ED leader invited Prime Minister Blair to bear in mind that, should no agreement be reached, the resulting EU budget -- as governed by Treaty provisions on annual planning -- would in fact be larger than the one foreseen by the financial perspective. He did note, however, that "even if we do not welcome the contents of the agreement", he was happy to have one to begin with. Mr. Poettering also gave some clues as to his group's position on particular sections of the financial framework: Justice and Home Affairs and the Common Foreign and Security Policy, he noted, are areas where the citizens of Europe expect the EU to act jointly. As he affirmed, "we are looking for improvements there".
Hannes SWOBODA (PES, AT) was equally unimpressed with the European Council's compromise. "You cannot say that the financial perspective is a sound basis for future enlargement," he told Mr. Blair. Do you think, he asked rhetorically, that there is enough for the upcoming enlargements? "I don't think I do". Lamenting the lack of agreement on agricultural reform and noting the need to modernise the EU economy, Mr. Swoboda narrowed in on the proposed budget line for research and development. "This falls far short of what we need", he acclaimed. Calling for serious revisions to the financial perspective, he qualified the present proposal as "unacceptable to us in its current form". He was to add, however, that in as much as "this budget gives us too little to live on, [...] we're not going to die for it".
Graham WATSON (ALDE, UK) called the entire deal a "book-keeper's triumph". As much as he had hoped that the EU's Heads of State and government could "demonstrate the sort of vision our leaders had twenty years ago", he told Mr. Blair, "you and your colleagues have failed to muster up such courage". The size of the 2007-2013 budget, he recalled, does not come close to the 1.18% of EU GNI that Parliament had called for earlier this year: "the amount provided is insufficient for Europe's needs". If his group had to vote on the package today, he said, "we would reject it". Fortunately, he added, it is not up for vote today and remains up for negotiation with the Council. Mr. Watson also took the opportunity to bemoan the state of public opinion in the UK about the European Union. "Your approach to the Presidency", he was to tell Mr. Blair, "has done little to change that climate of opinion".
According to Monica FRASSONI (Greens/EFA, IT), the European Council's agreement "does not mean that the EU is out of its crisis". Alluding to the British Prime Minister's claim that a bigger budget is theoretically possible "as long as it is a reform budget", she questioned why it was that Mr. Blair had not come up with any reform proposals on EU spending back in 2002 or 2003. With the financial perspective now tabled, she feared, "Europe is weaker than it was before". Mrs. Frassoni called for increasing, among other things, the Union's administrative expenses and criticized provisions that, according to her, promise to cut spending on rural development and external action.
For the GUE/NGL group, Mr CATANIA (IT) described the new Financial Perspective as a "a bad agreement" and one which was "unacceptable to the people of Europe". The UK Presidency had made the crisis in Europe worse by not learning "the lessons of the French and Dutch referendums". It had opted for "an agreement at all costs", which offered "no growth for the EU". "What about the Cohesion Fund, what about social Europe and education?", he asked before accusing the British Presidency of introducing a two-speed or even a three-speed Europe, with "Greece, Spain and southern Italy being penalised again". Arriving at the crossroads, "you took the wrong road", he said, and now the result was that "Europe is a neoliberal mouse".
Nigel FARAGE (UK) for the IND/DEM group said that the Prime Minister had offered a lot at the beginning of his presidency. But the presidency had not lived up to these expectations. It had delivered some 3350 legislative acts. There had been no reform of the CAP and there would be none until 2014. He had lost €7 billion from the UK rebate for nothing in return. The only achievement was to open negotiations with Turkey by this was very unpopular amongst Europe's citizens. "Why should we pay for improvements in Budapest or in Warsaw?" he asked. It was "game, set and match to President Chirac, he has outclassed and outplayed you." If Britain's presidency were to continue for a further six months, then "they would kick us (the UK) out."
Brian CROWLEY (IE) for the UEN group said that he had experienced several budget negotiations and stated that this budget deal was a good compromise and gave Europe the possibility to move forward. He thanked the work of Sir John Grant (UK permanent representative to the EU) and the staff of the UK permanent representation to the European Union. There was always cost to doing anything in life. The cost of doing nothing in 1939 was war and in 1992 the cost was war too in former Yugoslavia. He called on Prime Minister Blair to continue his engagement in Europe after the end of the Presidency. The test would be when politics was not going so well.
Roger HELMER (UK), a non-affiliated MEP said that as a British Conservative he was "appalled" by the way the UK Prime Minister had "failed my constituents". Mr Blair had first said he would not put the British rebate on the table, then had agreed to put it on the table but only in exchange for reform but in the end he would be "remembered as the man who squandered Margaret Thatcher's legacy".
Prime Minister Blair's response to the political group speakers
Prime Minister Blair responding to the first round of political group speakers said that "in my experience there are three groups of people in politics and the first are reactionaries." Addressing the UKIP delegation, Mr Blair said "you may have our flag next to you, but you not represent the interest of our country. This is 2005 not 1945, we are not fighting each other". As to the second group, "the commentators" Mr Blair said that "it is inevitable that national governments argue for their national interest, but you can argue nonetheless that the budget deal is the right budget deal for Europe, that gives certainty. The fundamental reform of the budget would take place in two stages: first there would be a deal on the budget and second in 2008 there would be a process of fundamental reform. Most people understand that we need a fundamental reform of the budget." Prime Minister Blair said that UK had trebled its budget for aid to Africa and the EU had doubled its budget. The agreement in Montreal "paved the way for reaching a fundamental framework agreement with countries including America, China and India."
The citizens of Europe expected Europe to work collectively at the supranational level to tackle issues including the single economic space with a social dimension, terrorism, migration. "The third group is the doers. First, the budget deal needed to be resolved and that was the best budget deal we could reach in the circumstances".
British speakers during the debate:
Timothy KIRKHOPE (EPP-ED), leader of the British Conservatives in the European Parliament said that Mr Blair had spoken a lot of "rhetoric" and the presidency had not lived up this rhetoric. There was no agreement on the Constitution, on reform of the social model or on the issue of the UK rebate. There has been absence of leadership and wasted opportunity.
Gary TITLEY (PES), leader of the Labour group in the European Parliament said that he was satisfied with the results of the UK Presidency. In particular, that negotiations had opened with Turkey and Croatia and that General Gotovina had now been arrested. There had also been an agreement with the USA on civil aviation and agreement in Montreal on climate change.
Terry WYNN (PES) said that in the budget conciliation with the European Parliament that it would be important to stress that Member States should better control their spending of EU funds. Also, if €1 billion were to be saved from the EU administrative budget, then it could be saved by Parliament not spending one week per month in Strasbourg; he wondered what support in Council there was for this idea.
Ian HUDGHTON (Greens/EFA) said that he too wanted to reconnect Europe to its citizens but this could not be done by simply blaming the French. He questioned why the UK had signed up to the 2002 agreement on CAP spending if the government knew that it would cause problems in the future.
Gerard BATTEN (IND/DEM) said that the UK rebate was fully justified and that Mr Blair's legacy would be to destroy Margaret Thatcher's legacy. The new Member States reform away from Communism had little do with the EU and more to do with Margaret Thatcher and President Reagan. The new EU Member States should not become "subsidy junkies."
Andrew DUFF (ALDE) said he greatly welcomed the radical review of both the income and spending sides of the EU budget. He called on Prime Minister to Blair to set up "a committee of enquiry" including Members of the European Parliament to examine these issues.
Richard CORBETT (PES) said that in almost all areas there had been a modest increase in the EU budget and for research and development an increase of up to 75%. There would be a gentle decline in CAP spending with a 7% reduction. In the final budget negotiations with Parliament, there should be a further reduction of CAP spending given the WTO talks and the reform of the sugar sector in favour of increased spending on research and development.
Geoffrey VAN ORDEN (EPP-ED) said that here been no profound debate on Europe's future during the UK presidency and that CAP spending would remain at 43% until 2013. The UK would pay €1 billion per year and Europe was further away from the US and he called Mr Blair's flagship policy on Africa - "a disaster".
Mr Blair's response to the debate
Prime Minister Blair addressing the UK Conservatives said "that I am absolutely with you in your struggle to remain within the EPP". He rejected the idea that the countries of central Europe would become "subsidy junkies". "If you take the case of Spain and Ireland, for a very modest investment, there is a combined €60 billion trade with these two countries" and this is an important gain for the UK.
"Those that had criticised the 2002 budget deal failed to recognise that the deal was necessary for enlargement to have taken place".
On the period of reflection, Prime Minister Blair said the only way to change the rules is once we have set out a coherent aim for the EU. Constitutional rules are not so important for the average EU citizens but we have to get all EU citizens engaged in the reform agenda. 60 years after the end of the Second World War, countries now exchanged verbal blows around the table, and this achievement should be recognised.
President Barroso's response to the debate
Answering questions on the four "statistical effect" regions, Mr Barroso pointed out that they would still receive 50% of the rate they received under Objective 1 and the Commission would "remain attentive" to their situation.
Turning to the immediate future, the Commission President stressed the element of flexibility allowed under the financial framework and the Commission's readiness to work closely with Parliament and Council on this. And he said "the real meaning" of the review clause was that if Member States agreed the budget could be altered even in the period 2007-2013, for example to take account of new needs which might arise such as the accession of Croatia or other external policy issues.
He then urged MEPs to put more pressure on the governments of their home countries over the EU budget, pointing out "you often say one thing here but your parties in their governments say something else".
Mr Barroso wound up by saying that provided the Interinstitutional Agreement can be finalised, "we can conclude 2005 on a positive note".
