The European Parliament,

–   having regard to the Lisbon Treaty amending the Treaty on European Union and the Treaty establishing the European Community, signed on 13 December 2007 ("the Lisbon Treaty"),

–   having regard to the Treaty on European Union and the Treaty establishing the European Community, as amended by the Single European Act and the Maastricht, Amsterdam and Nice Treaties,

–   having regard to the Interinstitutional Agreement 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 11 March 2003 on reform of the budgetary procedure: possible options in view of the revision of the treaties(2),

–   having regard to its resolution of 29 March 2007 on the future of the European Union's own resources(3),

–   having regard to its resolution of 8 June 2005 on Policy Challenges and Budgetary Means of the enlarged Union 2007-2013(4),

–   having regard to the conclusions of the European Council of 11 and 12 December 2008 on the approach to resuming work on the Treaty of Lisbon,

–   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 and the Committee on Agriculture and Rural Development (A6-0183/2009),

A.   whereas the Lisbon Treaty introduces major changes in the area of the Union's finances, in particular as regards interinstitutional relations and decision-making procedures,

B.   whereas it establishes a clear hierarchy among the basic acts governing the financial and budgetary life of the Union, thereby bringing about a much-needed clarification of the decision-making system,

C.   whereas the multiannual financial framework (MFF), which translates the Union's political priorities into expenditure programmed over a number of years and places a ceiling on Union expenditure over a given period, becomes in the Lisbon Treaty a legally binding act based on a new specific legal basis for the adoption of the regulation setting out the MFF,

D.   whereas the fact that the MFFs, on the one hand, and Parliament's parliamentary term and the Commission's term of office, on the other, do not coincide has thus far served to deprive Parliament of part of its budgetary powers, because it is often bound by a financial framework negotiated and adopted during the previous parliamentary term,

E.   whereas, if no change is made to the timetable, some Parliaments will never be able to take fundamental budgetary decisions, since the financial framework adopted by their predecessors covers the entire parliamentary term in question,

F.   whereas the current small margins available under each heading and the paltry sums allocated to the flexibility mechanisms which can be employed make it very difficult for the Union to respond appropriately to unexpected political events and may deprive the annual budgetary procedure of its substance,

G.   whereas the entry into force of the Lisbon Treaty makes it essential that the institutions responsible for the Union's financial and budgetary decision-making should reach an agreement on an optimum transition to the arrangements introduced by the new legal acts and the new decision-making procedures,

H.   whereas, in the interests of the smooth functioning of the Economic and Monetary Union, the EU budget must be taken into account when coordinating Member States" budgetary strategies,

I.   whereas the European Council of 11 and 12 December 2008 reaffirmed that the Lisbon Treaty is necessary in order to help the enlarged Union to function more efficiently, more democratically and more effectively, including in international affairs, and whereas it defined an approach and legal guarantees which meet the concerns expressed by the Irish electorate, with a view to enabling the Treaty to enter into force before the end of 2009, while respecting the aims and objectives of the Treaties,

Overall appraisal

1.  Welcomes the advances brought about by the Lisbon Treaty in the area of the democratic scrutiny and transparency of the Union's finances; draws attention to the need to enhance and adapt interinstitutional conciliation mechanisms and internal cooperation procedures in order to enable Parliament to exercise its new powers to the full;

Own resources

2.  Regrets that, as regards the Union's own resources, the Member States have failed to take the opportunity to establish a system of genuine own resources that is fairer, more transparent, more readily understandable to the public and subject to a more democratic decision-making procedure;

3.  Regrets, in particular, that no progress has been made in involving Parliament in the process of determining the limits to and the nature of the own resources available to the Union; points out that decision making on revenue and decision making on expenditure remain separate;

4.  Welcomes, however, the efforts made to ensure that measures implementing the decision on own resources can be adopted by means of a special legislative procedure under which the Council acts by a qualified majority only after securing Parliament's consent;

5.  Calls on the Council to employ that arrangement wherever possible in order to make the decision-making procedure more flexible;

Multiannual financial framework

6.  Welcomes the formal status granted in the Lisbon Treaty to the MFF, which becomes a legally binding act; points out that the MFF programmes EU expenditure and places a ceiling on Union spending over a given period, thereby helping to strengthen budgetary discipline;

7.  Welcomes the fact that the regulation laying down the MFF will have to be jointly approved by Parliament and the Council, under a special procedure;

8.  Regrets, however, that the Lisbon Treaty has retained the requirement that the Council should act unanimously when adopting the MFF, rendering the decision-making procedure very difficult and encouraging negotiations on the basis of the "lowest common denominator"; urges the European Council, therefore, to make use as soon as possible of the provision which enables it, by means of a unanimous decision, to impose a switch to qualified-majority voting for the adoption of the MFF;

9.  Regrets, further, that under the new procedure Parliament has only a right of approval and no genuine power of codecision; however, emphasises the fact that the Lisbon Treaty stipulates that the institutions must take any measure necessary, throughout the procedure, to ensure that is ultimately successful; calls on the Council, therefore, to demonstrate its willingness, from the start of the procedure, to develop a structured political dialogue with Parliament in order to take full account of the latter's priorities;

10.  Notes that the Lisbon Treaty stipulates that the MFF will determine not only the "amounts" of the "annual ceilings on commitment appropriations by category of expenditure and of the annual ceiling on payment appropriations", but will also lay down "any other provisions required for the annual budgetary procedure to run smoothly'(5);

Duration of the MFF

11.  Welcomes the fact that the Lisbon Treaty provides for the possibility of financial programming over five years, so that, if the necessary changes are introduced, the MFF can be made to match, as far as possible, Parliament's parliamentary term and the Commission's term of office, as democratic logic requires; emphasises that particular arrangements to cope with the needs of specific policies for longer-term financial periods could be required;

12.  Supports, therefore, the switch to a five-year MFF, but is aware that a full coincidence between the MFF and the term of the European Parliament and the term of Office of the Commission might be difficult, as it considers that a negotiating period of at least one year may be necessary to allow each new Parliament and each new Commission to take fundamental financial policy decisions during their terms of office;

13.  Takes a very favourable view of the incorporation of the MFF into a comprehensive approach to interinstitutional strategic programming - one which, moreover, is consolidated in the Lisbon Treaty - as suggested in the report by the Committee on Constitutional Affairs on the institutional balance(6);

14.  Endorses the proposal made in that report that the new College of Commissioners, when presenting its "programme for its term of office", should submit proposals concerning the guidelines for the financial framework which it regards as necessary to achieve political priorities for its term of office - priorities which, once the programme for the parliamentary term has been agreed between the institutions, would be developed through its proposals in the MFF;

15.  Takes the view, moreover, that at debates in plenary and hearings before the parliamentary committees the nominee for the post of President of the Commission should already be in a position to provide an outline of the likely financial implications of the political objectives the new Commission intends to pursue;

16.  Emphasises that the switch to five-year financial programming, as referred to above, could necessitate the prolongation and adjustment of the current MFF to 2016 inclusive, so that the next five-year MFF can enter into force, at the latest, in early 2017(7); recommends that the negotiations for the next MFF be in any case concluded by the end of the first trimester of 2016, in order to allow for the budgetary procedure for 2017 to run already within the parameters of the framework that will be in force in 2017;

17.  Stresses that the negotiations should be conducted in such a way as to allow the institutions to envisage the entry into force of a new MFF already in 2016;

18.  Considers that the prolongation and adjustment of the current MFF should be considered when the next mid-term review is carried out in 2010;

Flexibility

19.  Emphasises that the legally binding nature of the MFF necessitates, even more than before, the introduction of more flexible implementing arrangements so that the Union can respond sufficiently flexibly and effectively to unforeseen challenges, both within and outside the Union;

20.  Draws attention to the fact that the Lisbon Treaty stipulates that the ceilings corresponding to the last year of the existing MFF and other provisions will be extended if the new MFF has not been adopted before the preceding MFF expires; regards this as a further argument in favour of increased flexibility;

21.  Emphasises, in that connection, the importance of strengthening flexibility mechanisms operating within and between each heading and through specific flexibility instruments which can be mobilised outside the margins;

22.  Points out that the Committee on Budgets will give its views on these matters when adopting its report on the mid-term review of the 2007-2013 MFF;

Transition from the interinstitutional agreement to the MFF

23.  Draws attention to the need, in good time prior to the entry into force of the Lisbon Treaty, for the institutions to reach agreement on the arrangements for making the transition from the current interinstitutional agreement to an MFF contained in a legislative act, as provided for by the Lisbon Treaty; recalls that a period of eight weeks is required for scrutiny by national parliaments of draft legislative acts;

24.  Takes the view, in that connection, that agreement will have to be reached as to which of the provisions that currently form part of the interinstitutional agreement should be switched to the MFF, which should be incorporated into the future Financial Regulation and which might justify the retention of an interinstitutional agreement - possibly incorporating new provisions - on budgetary cooperation; points out that this process of dividing up the provisions of the current interinstitutional agreement will have to take account of the criteria laid down in the Lisbon Treaty itself;

Annual budgetary procedure

25.  Warmly welcomes the abolition of the distinction between compulsory expenditure (CE) and non-compulsory expenditure (NCE), as a result of which Parliament now has the right to take decisions concerning all Union expenditure on an equal footing with the Council;

26.  Emphasises that the abolition of the distinction between CE and NCE is not at odds with the Union's obligation to honour its financial commitments, and welcomes the fact that the Lisbon Treaty acknowledges that it is for Parliament, the Council and the Commission to ensure "that the financial means are made available to allow the Union to fulfil its legal obligations in respect of third parties"(8);

27.  Notes that the changes to the annual budgetary procedure should serve to make it more simple by laying down the principle of a single reading for each institution and by introducing a number of mechanisms designed to help the two arms of the budgetary authority reach agreement; emphasises that these changes should lead to less bureaucracy;

Role of the Commission

28.  Emphasises the strengthening of the role conferred on the Commission, which acquires a right of initiative in the budgetary sphere and may amend its draft budget until such time as the Conciliation Committee is convened;

29.  Welcomes the fact that the Treaty also acknowledges that it is for the Commission to take all the necessary initiatives with a view to reconciling the positions of Parliament and the Council during the proceedings of the Conciliation Committee, thus inviting it to play to the full its role of mediator between Parliament and the Council with a view to securing an agreement;

A completely new approach

30.  Draws attention to the fact that the new procedure provides for only a single reading of the draft budget by each institution; emphasises that the new procedure and the single reading will no longer make it possible in de facto terms for the institutions to adjust their standpoints at second reading, as they were able to hitherto; is convinced, therefore, that this procedure will require Parliament to fine-tune its political priorities at an earlier stage and adapt accordingly its operational approach and organisational arrangements so as to enable it to achieve all the objectives set;

31.  Points out that this single reading must be used to assert Parliament's political priorities, but must also enable it to reach agreement with the Council by the time the Conciliation Committee has completed its work (or enable it to adopt its amendments again by a large majority, in the event of approval by Parliament and rejection by the Council of the text drawn up by the Conciliation Committee);

32.  Emphasises, in that connection, the importance of retaining a pragmatic timetable similar to the current one, whilst calling for conciliation to be initiated in good time; points out, moreover, that the introduction of informal arrangements for dialogue between the institutions is crucial to facilitating agreement before the procedure starts and then throughout its duration;

33.  Is convinced that the Lisbon Treaty will strengthen Parliament's powers, provided that it equips itself with the means to manage effectively both the tighter timetable and the greater need to plan ahead thoroughly which will result from the introduction of the new procedure;

34.  Takes the view that in future its resolution before the first conciliation meeting will take on increased importance, since it will enable Parliament formally to set out its budgetary priorities for the coming financial year, unencumbered by tactical considerations linked to the Council's position on the draft budget; takes the view that that resolution will thus give the other institutions a clear picture of Parliament's priorities before the interinstitutional negotiations start; adds that this will also provide Parliament with an opportunity to set out some initial guidelines concerning pilot projects and preparatory actions;

35.  Points out that these priorities will also be of great value to Parliament both as guidelines for its reading of the draft budget and as a negotiating mandate for its delegation to the Conciliation Committee;

36.  Stresses the importance of organising a trialogue in July of each year in order to enable each institution to gain a clear insight into the priorities of the other parties and to enable Parliament to apprise the other institutions of the substance of the resolution on the draft budget to be adopted in July;

37.  Highlights the political value of the establishment – in keeping with each body's respective powers – of in-depth dialogue with the counterpart committees from the national parliaments on the draft budget and Parliament's priorities for the annual budgetary procedure;

Conciliation Committee

38.  Emphasises the importance which the Conciliation Committee will have in the future as the body in which political disagreements between the two arms of the budgetary authority are resolved; points out that this committee will have the task of finding, within 21 days, an agreement on a compromise text which will enter into force if it is not rejected by the budgetary authority; takes the view that the members of this committee must be drawn from the very highest political level;

39.  Welcomes the fact that the Lisbon Treaty confers a decisive role on Parliament at the end of the procedure; points out that:

40.  Emphasises that it would be desirable for Parliament's delegation to the Conciliation Committee to be headed by the chair of the Committee on Budgets and for it to incorporate, if required and without prejudice to the political nature of the procedure for the appointment of its members by the political groups, in addition to the members of that committee, members of specialist parliamentary committees in cases where the negotiations concern a specific issue within their policy area;

41.  Calls on the Council to reach agreement with Parliament quickly on the Conciliation Committee's working arrangements;

42.  Takes the view, for its part, that the Conciliation Committee should be able to meet at least twice at the highest political level, if that is necessary for agreement to be reached, its meetings to be preceded by a preparatory political trialogue, in keeping with the traditional arrangement; reiterates the need for the Council's representatives at these meetings to be issued with a political negotiating mandate;

43.  Proposes that these proceedings should be prepared by an interinstitutional preparatory working party comprising the general rapporteur and representatives of the political groups, for Parliament, and the Permanent Representative of the country holding the EU Presidency, who may be accompanied by representatives of the two other Presidencies in the troïka;

44.  Points out, further, that the institutions must reach agreement on the composition of the Conciliation Committee secretariat, which should probably consist of officials from the two arms of the budgetary authority, assisted by the Commission;

Agricultural matters

45.  Draws attention to the fact that the rule stipulating that the Commission may no longer amend its draft budget once the Conciliation Committee has been convened will preclude the use of the traditional autumn letter of amendment to take account of the updated forecasts for agricultural policy and their budgetary implications; takes the view that, if these circumstances arise, the most appropriate procedure would involve the submission by the Commission – if necessary – of a specific draft amending budget (an "agricultural AB") once all the agricultural data have been finalised;

Relations with the legislative authority

46.  Emphasises that the parallelism between the extension of Parliament's budgetary powers to cover all Union expenditure and the widening of the codecision procedure to encompass almost all legislation calls for greater account to be taken of the budgetary dimension to legislative activity; with that aim in view, regards it as essential that cooperation between the Committee on Budgets and the sectoral committees should be stepped up in order to take due account of the financial impact of Parliament's legislative activity, in particular its impact on the MFF and the annual budget; proposes, accordingly, that the legislative conciliation committees on matters with financial implications should include a member of the Committee on Budgets; to that end, draws attention to the work of the Working Party on Parliamentary Reform, not least as regards the specific forms of cooperation between parliamentary committees set out in the third interim report;

47.  Points out, moreover, that the Lisbon Treaty extends to all Union institutions the obligation to enforce budgetary discipline; points out that Parliament's Rules of Procedure already lay down a specific procedure designed to ensure that that principle is observed; takes the view that this procedure will have to be made more workable and effective;

Financial Regulation

48.  Welcomes the fact that the Financial Regulation becomes a regulation adopted under the ordinary legislative procedure (codecision) by Parliament and the Council, after consulting the Court of Auditors;

49.  Points out that the Lisbon Treaty contains the main provisions to be used to identify those provisions of the current interinstitutional agreement which should be retained in the future agreement and those which should instead be incorporated into the MFF;

50.  Notes, however, that the Financial Regulation should incorporate all the provisions needed to define the budgetary procedure, in accordance with the provisions of the Treaty(9); takes the view that such provisions would cover the functioning of the Conciliation Committee, the mechanism triggering conciliation, and, naturally enough, the updating of the provisions of the Financial Regulation directly affected by the changes introduced by the Lisbon Treaty (i.e. the abolition of the distinction between CE and NCE, a new codecision procedure for transfers, etc.);

51.  Regards it as vital that the institutions should reach a political agreement on these matters in due time so that, once the Lisbon Treaty has entered into force, the requisite changes to the Financial Regulation can quickly be made using the new procedure and, if needed, provide for provisional agreements to allow the smooth continuation of the budgetary procedure;

52.  Calls on the Commission to put forward in due time a proposal which enables Parliament and the Council to reach agreement on the application of the identification criteria referred to in paragraph 49 to the substance of the current interinstitutional agreement;

53.  Argues that these changes to the Financial Regulation must be kept strictly separate from the three-yearly review of that document scheduled for 2010;

Budgetary impact of the interinstitutional changes and the Union's new competences

54.  Notes that the entry into force of the Lisbon Treaty will also have an impact on the Union budget through the institutional innovations it contains, in particular the elevation of the European Council to the status of institution, accompanied by the establishment of a fixed Presidency, and the creation of the post of High Representative and of the European External Action Service, whose task will be to support the High Representative in his or her work;

55.  Reiterates, as of now, its intention of exercising its budgetary powers to the full in connection with these institutional innovations and emphasises the importance of reaching a political agreement with the Council in due time on funding arrangements for the European Council, and, in particular, its fixed Presidency, and for the future European External Action Service; emphasises that all aspects of the funding arrangements for that service must remain under the supervision of the budgetary authority;

56.  Points out that in the framework of the CFSP and the common security and defence policy the Lisbon Treaty provides for the establishment of new procedures to grant rapid access to the Union budget and to create a start-up fund of Member State contributions; stresses, however, that all external actions of the Union should as a rule be financed from Community appropriations, and only exceptionally – in the event of an emergency – on the basis of contributions outside the Union budget;

57.  Notes that the Lisbon Treaty will also have a financial impact, however limited, by virtue of the new specific competences conferred on the Union; states its willingness to analyse, at the appropriate juncture, the practical implications of the exercise of these new competences; takes the view that these competences will certainly not be implemented en bloc immediately after the entry into force of the Lisbon Treaty, but rather gradually as the relevant legislative proposals are drawn up; takes the view, however, that they must not be funded to the detriment of the Union's current activities;

Coordination with national budgets

58.  Wishes to invite the national parliaments to take part, each year, in a joint public debate on national and Community budgetary policy guidelines, prior to consideration of the respective draft budgets, in order to establish from the outset a common framework for coordination of Member States" national policies, while also taking into account the Community contribution;

59.  Points out that the decision on the apportionment of EU budget expenditure in the light of the Union's major objectives would be usefully informed by the annual publication, by each Member State, of the appropriations under national and, where applicable, regional budgets that contribute to achieving those objectives;

o
o   o

60.  Instructs its President to forward this resolution to the Council, the Commission and the parliaments of the Member States.

(1) OJ C 139, 14.6.2006, p. 1. (2) OJ C 61 E, 10.3.2004, p. 143. (3) OJ C 27 E, 31.1.2008, p. 214. (4) OJ C 124 E, 25.5.2006, p. 373. (5) Article 312(3) of the Treaty on the Functioning of the European Union. (6) Dehaene report of 18 March 2009 on the impact of the Lisbon Treaty on the development of the institutional balance of the European Union (A6-0142/2009). (7) In keeping with the model described in the following table taken from the Committee on Budgets" report of 26 February 2009 on the mid-term review of the financial framework 2007-2013 (A6-0110/2009):___________________________________________________________________________________Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019budget prep 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Parliamentary term 2004 / 2009 2009 / 2014 2014 / 2019MFF Review 2007 / 2013 2013 / 2016 2017 / 2021 (8) Article 323 of the Treaty on the Functioning of the European Union. (9) According to Article 322(1)(a) of the Treaty on the Functioning of the European Union, it must include 'the financial rules which determine in particular the procedure to be adopted for establishing and implementing the budget'.