President. The next item is the joint debate on the reports:

- by Mr Elles and Mr Grech on behalf of the Committee on Budgets on the draft general budget of the European Union for 2007 amended by the Council (all sections) (15637/2006 – C6-0442/2006 – 2006/2018(BUD) – 2006/2018B(BUD))

- and letters of amendment 1/2007 (SEC(2006)0762), 2/2007 (13886/2006 - C6-0341/2006) and 3/2007 (15636/2006 - C6-0443/2006) to the draft general budget of the European Union for 2007

Section I – European Parliament,

Section II – Council,

Section III – Commission,

Section IV – Court of Justice,

Section V – Court of Auditors,

Section VI – Economic and Social Committee,

Section VII – Committee of the Regions,

Section VIII(A) – European Ombudsman,

Section VIII(B) – European Data Protection Supervisor [2006/2018(BUD)] (A6-0451/2006), and

- - by Mrs Gräßle, on behalf of the Committee on Budgets on the amended proposal for a Council regulation amending Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities [COM(2006)0213 – C6-0207/2006 – 2005/0090(CNS)] (A6-0447/2006), and

- - by Mr Pittella, on behalf of the Committee on Budgets, on draft amending budget No 6/2006 of the European Union for 2006, Section III – Commission [15635/2006 – C6-0441/2006 – 2006/2265(BUD)] (A6-0444/2006).

  James Elles (PPE-DE), rapporteur. – Mr President, I should like to draw the strands together as this will hopefully be our last debate on the 2007 budget. I should also like to welcome the Council and its representatives, who have been somewhat confused at some points in our procedure, which has led to misunderstandings that we hope will be clarified before we come to the final vote.

I should like to thank the Commissioner very much for all the support she has given to most of Parliament’s ideas. Her support has been very helpful during this procedure. I thank my colleagues on the Committee on Budgets for their support and input into this procedure, but above all I should like to thank the Committee on Budgets staff who have enabled all of this to be put together. Without them I do not think we would be at this stage in the proceedings.

At this juncture I should like to raise a couple of points as general rapporteur. Not only have we been able to achieve – I believe it will be clarified that we have achieved this – the substantive negotiation on the Financial Regulation, which my colleague Mrs Gräßle will deal with in a moment or two, but we have been able to establish in our way of doing things for the 2007 budget a very prudent approach on payments below the 1%, largely because we are at the stage of having new programmes for the Financial Perspective. There are no particular requests or demands from the groups or committees. That is something we can no doubt expect in future years. So basically we re-establish the PDB, but with emphasis on our political priorities concerning research innovation where we have had additional appropriations.

Secondly, we have taken what I would call a sensible approach to the use of the reserve. Often in this House we have been able to put particular funds on reserve at first reading, but perhaps the conditions for release or the way in which this has been approached have not been sensible or coherent. Here there are three examples that I would like to mention where I believe the conditions for release and the policy for reserve use have actually been helpful in strengthening Parliament’s position in the budget process.

Firstly, I would cite the common foreign and security policy where we have a much clearer definition of what we gained in the interinstitutional agreement. We would very much hope now that the Council will hold to this, as we have had a very clear exchange of letters and we should not then have the same misinterpretation in the 2008 budget.

Secondly, on the question of staff, here too Parliament has been able to provide a way of sensibly dealing with that process, rather than what might have been an immediate surge – as the Council wanted – of productivity gains but maybe not achieving very much. We have been able to ask the Commission – and it has agreed – for a proper screening process to be established by 30 April 2007 so that we can have a substantive justification for staff increases over the next few years. That will be very welcome as part of the conditions for release of the staff reserve will be a statement from the Commission in February next year. So we will know exactly what the legislative programme for the Union will be in February 2007.

Last but not least in the use of the reserve is the question of value for money. We had an excellent discussion and debate on 15 November at our last session with the Commissioner and the Secretary-General, who came to show exactly where we had taken lines in reserve and where we could now release them. We have very few of those lines left available now. That has been a very useful process in getting a much better perception as to where the lines are weak and where we have weak implementation. We welcome the Commission’s participation in that.

Looking ahead, it seems to me that we now have to implement this resolution on the proper implementation of the budget. Perhaps the Council could come along and sign the resolution on value for money. If it does not do it now, hopefully it will do so under the German Presidency.

We need to maintain our priorities. We have been very clear. We have taken on the priorities of the Financial Perspective. As we now look further forward to the 2008 and 2009 budget years, there is a lot of work to be done.

We are not going to escape from the speed of globalisation. That was the first point we made when we looked at the APS back in May. We are going to have to adjust the programmes for financing, looking forward to seeing where our money can be best spent.

(The President cut the speaker off)

  Louis Grech (PSE), rapporteur. - (MT) Mr President, this year budgetary requests were considered on their own merits, and the actual needs and priorities of the institutions were taken into consideration. At the same time, all forms of expenditure were critically examined in order to cut down on waste and bad practices. It was equally important, however, for me to ensure that the institutions were given the necessary tools and funds to function and operate efficiently.

One general observation I would like to make is that not enough efforts are being made by the institutions to present clearer, more accurate and more analytical estimates. Were this to happen, the amounts that are put in reserve would be markedly lower, and there would be no need to provide unduly inflated margins, with the result that we end up cancelling appropriations at the end of the year and carrying out last-minute transfers. Once again, I would like to emphasise the need for all the institutions to present more detailed and informative reports about their activities every year, stating whether their objectives have been achieved and how allocated funds have been utilised.

Another major point in this budgetary procedure was the policy related to the recruitment service, which must be improved. Both Parliament and the Council have, in principle, approved every request for posts related to enlargement of the Union. However, it is becoming increasingly difficult to understand or justify the delay in the process of staff selection related to the 2004 enlargement. This shortcoming should be remedied, and the institutions, together with EPSO, should solve this pressing problem of the filling of vacant posts. Hence, the decision taken by Parliament and the Council to monitor the recruitment process closely is a necessary one.

The 2007 budget framework concentrates also on another important point, namely cooperation beween the Committee of the Regions and the Economic and Social Committee. In the coming budgetary year, a realistic analysis should be carried out to ensure that the agreement between them is renewed without other forms of cooperation being excluded. The point of departure of every exercise should be cooperation that respects separate identities. More equitable governance of the joint service must also be guaranteed. In view of this, it would be advisable to set up a working committee which would address this matter and which would examine the impact of the opinions issued by these two committees and of other work carried out by them. In 2007 we should have fewer problems with regard to assistance to Members and the Visitors Programme. I feel we have achieved tangible progress as regards these two services and that its impact should be felt in 2007 and 2008. It should, however, be stated that the information given to Members about the services available should be more effective.

Next year we expect an upgrade in the institutional structure in order to achieve a greater degree of streamlining, as well as a more determined implementation of the redeployment policy, which I believe will have a positive impact over the next few years. On the other hand, multilingualism has been disappointing. In this regard, we reiterate our support for the initiative taken by the Parliamentary Bureau to establish a good practice guide, which should include sanctions and penalties. Good management of this useful, though expensive, service next year should be on the agenda of all the institutions.

Mr President there is not enough time to speak about other priorities that have been addressed in this budget, such as the information policy, where we expect to observe further progress in 2007, and the acquisition of property – especially property held jointly with the Commission – in relation to which we expect a great deal of improvement, as well as information science, security, training, the simplification of legislation and so many other issues. It should be pointed out that, during the planning and development phases of this budget, we felt the need to maintain contact with all the institutions.

The last budget level obtained during the first reading was a result of this process. In fact, during the conciliation process with the Council and the Commission, the parliamentary representatives did their utmost to find a balanced formula, and we are assuming that all parties, including the Council, will honour the agreements reached during these meetings. The primary aim of these trialogues and reconciliation meetings would otherwise be lost. We could not accept a situation in which procedures no longer made sense or, worse still, were counterproductive for this Parliament. In these circumstances I feel that the Committee on Budgets should address these questions urgently over the next few months.

  Ingeborg Gräßle (PPE-DE), rapporteur. – (DE) Mr President, Madam President-in-Office of the Council, Commissioner, ladies and gentlemen, today is a great day for this House. For all of two years, we have been working together on the Financial Regulation, and have, most recently, been cooperating outstandingly well with the Commission in this.

This House has made it clear to all the importance that we attach to the legislative process associated with the Financial Regulation; what we were aiming for was better budgeting, the correction of the 2002 reform’s excesses, and the taking on board of justified criticisms of highly bureaucratic procedures and laborious ways of getting things done, and in that we have succeeded, with the help of the Members who sit on the Committee on Budgets and the Committee on Budgetary Control, primarily my good friend Mr Pahor, the members of our working party, the secretariats and my personal assistant, to all of whom I extend the warmest of thanks. The Budget DG, under Commissioner Grybauskaitė, has also played its part in a most felicitous and sympathetic way, so warm thanks go to them as well.

The Council, too, started off by playing the game, only then to suffer a failure of nerve; that was actually a shame, since that is no way to treat friends, so let us hope that they do not do the same with the implementing regulations. The improvement of monitoring quality in the Member States is a recurrent issue in this Europe of ours, and it calls for more commitment on the part of the Council; perhaps Mrs Wideroos, the minister, will be so good as to affirm that the Council accepts the result from conciliation with this House achieved on 21 November, for if she does not, this House will not be voting on the 2007 Budget on Thursday.

Having negligently and wilfully interfered in the interinstitutional balance, the Finnish Presidency of the Council leaves a truly bitter taste in this House’s collective mouth, and has denied itself the great success of its presidency that the achievement of real de-bureaucratisation in Europe – mainly on the basis of our amendments – would have represented, but we are very grateful that the Council has been supportive of this and has moved it forward, particularly in relation to the need for more customer-friendly administration, for more transparency, for improved monitoring to protect European funds and for a database listing those criminals who, having acted to the EU's detriment, are excluded from receiving EU funds for a period of ten years, all of which are milestones on the road to better management of EU funds, and in which you – like us – can in fact take pride.

We will give these things tangible form in the implementing regulations and make them usable; in doing this, we are guided by the Financial Regulation and by the need for these quite new items to be dealt with one by one. What I need to clarify is that the enactment of the implementing regulations is a matter for the Commission alone; Parliament and the Council can do no more than be consulted. We see it as unacceptable that the Commission should be as readily put under pressure as you have tried to do over recent days, for by doing so you will end up curtailing this House’s right to be consulted, and it is only because the monitoring of EU funds, the recovery of them and the enforcement of uniform transparency requirements are a problem that we have tabled amendments in relation to them to the Financial Regulation.

I urge the representatives of the Member States to once and for all come up with some answers to these problems, instead of imitating the three monkeys in hearing nothing, saying nothing, and seeing nothing. This House will not be denied its right to voice an opinion when what we are trying to do is to play a constructive role in the handling of the EU’s money. We have learned our lesson from the past and wish to forge an alliance with all those who want to show that they have learned it too.

  Ulla-Maj Wideroos, President-in-Office of the Council. (FI) Mr President, ladies and gentlemen, it is an honour for me to be here in Parliament discussing the 2007 budget, in a situation where the template for a very lengthy drafting process is clearly apparent. I am relieved that the budgetary authorities have reached agreement on the budget for 2007. That is the job of the Council and Parliament.

I would like to thank the Members of Parliament for their cooperation over the last six months. There has been more open dialogue among the budgetary authorities than before, and that makes it possible for us to reconcile our varying views more easily. My special thanks go to the Chairman of the Committee on Budgets, Mr Lewandowski, and to the rapporteurs, Mr Elles and Mr Grech.

That said, I think that it is only right that I should assess the package from the point of view of the Council.

The increase in the 2007 budget matches the objectives of the Member States fairly well and does not place too great a burden on the taxpayer. Fortunately, the Council and Parliament reached agreement on a realistic figure for payment appropriations. Strict budgetary discipline has therefore now been included as a key principle. This should continue to be the approach in the years to come.

Overall it has been a significant achievement to adopt the amendment to the Financial Regulation in a situation where there are ever-growing pressures on making financial administration more efficient. In connection with the Financial Regulation, I might say that the Council this morning began a written procedure. That way this Council Regulation can be passed this Wednesday, that is to say 13 December, after Parliament has delivered its opinion on it. Regarding that, I would have liked to hear the Commission’s commitment to the letter sent yesterday by the Director-General of the Directorate-General for Budget on the topic of the rules for the implementation of the Financial Regulation.

On behalf of the Council, I wish to thank Parliament for allowing both budgetary powers to decide jointly now on pilot projects. The Council will act responsibly in the years to come. Similarly, compliance with the new interinstitutional agreement, especially with regard to the appropriations for the Common Foreign and Security Policy, is to be applauded.

The budgetary powers are showing a sense of responsibility and realism in not using the Flexible Instrument in 2007. This will provide a firm basis for budgetary practice in future years. Budgets need to be drafted within the context of frameworks.

The budget for 2007 contains clear priorities. The promotion of competitiveness, the introduction and monitoring of posts in association with enlargement, and the commencement of new generation programmes are practical examples of these.

This budget process also, however, contains some worrying prospects for the future. We did not make sufficient progress in making administration more efficient. The Commission and Parliament cannot ignore their responsibility for making the Union’s administration more efficient. If people in the Member States feel strongly about cuts in the number of posts, why are not the same measures, with nobody suffering personally, approved at Union level? This is a matter of the credibility of the work of the EU as a whole from the public’s point of view, and that means the budget, which the citizens of the Member States are responsible for financing.

Mr President, ladies and gentlemen, it is important that the Council and Parliament should have finalised this package adopted jointly within the framework of this budget process. I want to say again that I am glad that the budget approved for 2007 will contain adequate margins in almost all categories.

  Dalia Grybauskaitė, Member of the Commission. Mr President, today we are finalising our work and debates on the 2007 budget. This is very important for all of us because it is the first budget for the ‘new Europe’ of 27 Member States. It is the budget of a new financial framework; it is the budget of new Financial Regulation; it is the budget of a new financial legislative package, which we agreed to start fully from 1 January. So that means that this budget is not only a budget about figures, it is a budget of many things that we have achieved this year together with Parliament and the Council.

In our negotiations today’s budget required a huge effort from all sides and huge efforts of compromise. The result was achieved when we met on 21 November in conciliation and finalised in a week. For this package, the Commission always keeps its word and never changes the opinions reached in the conciliation negotiations.

I would like to thank the whole team that negotiated on Parliament’s side, as well as their staff, for helping us to find the solution, and all Members, especially the rapporteurs of the Committee on Budgets, for helping us to achieve this package. I am talking not only about the package for the 2007 budget, but also the Financial Regulation package. I also want to thank the rapporteur who is not here now, Mr Pittella, who also helped us go through the 2006 budget implementation.

I would like to say that today the discussion is very important as a final stage for Thursday’s vote and I am very grateful to all who made this day happen. I wish you a good debate and a very fruitful and positive vote on the 2007 budget on Thursday.

  Borut Pahor (PSE), draftsman of the opinion of the Committee on Budgetary Control. – (SL) Although I only have one brief minute at my disposal, I cannot but express my sincere admiration for the contribution made to the debate on the budget by Mrs Gräßle. Why?

There are, in my opinion, at least three major problems with the European budget. In the light of the Lisbon Strategy, the budget is: firstly, badly structured; secondly, too small; and thirdly, of too little practical effect. Mrs Gräßle’s contribution has done away with at least one of these problems, this being the third one, namely its minimal effectiveness.

The reform proposed by this report will make financial procedures less bureaucratic, more easily comprehensible, simpler and, above all, user–friendly. For these reasons, Mrs Gräßle deserves a great deal of gratitude for her contribution.

  Ville Itälä, on behalf of the PPE-DE Group. – (FI) Mr President, firstly I wish to thank both rapporteurs, Mr Elles and Mr Grech, for their excellent work and levels of cooperation. With regard to Mr Elles, I would just like to say in brief that I am especially pleased with his ‘value for money’ idea. It will also be an extremely important tool in the years to come and will help us when we are drafting the budget. With regard to Louis Grech, I want to say that his levels of cooperation were excellent and that we finally agreed on all the main budget lines.

I would just like to raise one issue, which concerns the report that we asked the Committee of the Regions and the European Economic and Social Committee for. There is no intention here to criticise them, but they must not ignore this ‘value for money’ notion. We will then see what the report brings when it eventually comes along.

What is particularly important about this package for the budget as a whole is that we can adopt the Financial Regulation which Ingeborg Grässle has worked so well to promote. It is really like she said: the prevention of criminal use of funds, transparency, and many other good things will ensue if this Financial Regulation can be jointly approved. It will be a major step forward in the decisions on this year’s budget.

Minister Lehtomäki, as has been mentioned here, this process has perhaps been somewhat confusing in Parliament. It is important now to find consensus so that the budget can be signed on Thursday. This proposal regarding staff cuts, however, was unrealistic. I myself always think it is advisable to question institutions and bureaucracy and what everyone is doing. The idea was not bad, but perhaps the proposal that Finland made was just too general in nature. The main thing, however, is that there have been good levels of cooperation and the budget will be signed on Thursday.

  Catherine Guy-Quint, on behalf of the PSE Group. – (FR) Mr President, Mrs Grybauskaitė, Mrs Wideroos, ladies and gentlemen, firstly, I should like to say a big thank you to all of those involved in this budgetary procedure and, in particular, to our rapporteurs, Mr Grech and Mr Elles, without forgetting Mrs Gräßle and Mr Pittella, and our secretariats. Thanks to them, we have been able to establish a budget that fully respects Parliament's budgetary powers.

This draft budget on the financial perspective is particularly sensitive. We have taken account of the time needed to launch the new programmes, while prioritising what are crucial actions for the Socialist Group in the European Parliament: policies on research, transport, innovation, social Europe, an environmental and knowledge-based Europe – in short, a People’s Europe. The budgetary instrument of the European Globalisation Adjustment Fund puts in place a new instrument of European solidarity.

As regards external affairs, we are following the guidelines of the specialised committees, which respect the balance between the thematic approach and the geographical approach. We hoped, thanks to the new financial perspective, to succeed in establishing better interinstitutional relations, and I will not hide from you my disappointment on this matter. Even our relations with the Council are deteriorating.

Firstly, Mrs Wideroos, you have just reassured us about the commitments made by the Council regarding the conciliation procedure: indeed, we value this agreement on the financial regulation. However, you have often lost sight of Parliament’s powers, and we have often had the impression that our rights were not being respected. Moreover, we take a very dim view of the contempt with which the new Member States are treated; you intended to deprive them of resources in terms of recruitment and structural policies. We have therefore faced difficulties, before coming up with an appropriate programme for 2007.

Commissioner, Parliament puts all of the resources that you requested at your disposal: reasonable commitment appropriations, a low level of payments – 0.99% of GNI – which you nonetheless regard as sufficient, and, above all, very few reserves. In return, we will watch over matters very closely to ensure that our vote is not distorted during implementation. Let me be clear: the global transfer votes or the SABs, which are as important now as they were in the past, are excluded. We will not stand in the way of the Commission’s exercising its prerogatives.

Instead, we should reconsider whether the resources, in terms of staff, are adequate for the implementation of the policies we are seeking to promote. In future, if we reduce the budget too much, we will no longer be able to develop any of these policies that the citizens expect. Disrupted, as it is, in its project, the Union is a seriously ailing body, and we are providing it with a particularly modest budget for 2007! For the forthcoming budgets, we need to adopt a constructive approach, which looks to the future, and no longer a defensive stance, aimed at containing national self-interest. For Parliament, for the Socialists, the European project consists of genuine, financial solidarity, which the Council sadly overlooks on a daily basis.

  Anne E. Jensen, on behalf of the ALDE Group. – (DA) Mr President, Commissioner, Madam President-in-Office of the Council, this budget process has been essentially uncomplicated. It is less than a year since we reached agreement on the budget for the next seven years, and the budget on which we will be voting on Thursday sticks within the agreed framework beautifully. Through this budget agreement we have achieved sound results. We have ensured a Financial Regulation with less bureaucracy, with more transparency about who receives agricultural aid and with a common blacklist of those companies that have fiddled EU funds. We have ensured a budget that fulfils our political desires within the framework drawn up.

The 2007 budget is the first within the new seven-year framework and it is characterised by the fact that many new programmes for, for example, structural funds, research and training and education are to get under way. This is the first budget where actual agricultural aid amounts to less than appropriations for the development of poor regions. Agricultural aid accounts for approximately one third of the nearly EUR 126 billion of the budget. Most of the 2007 budget is thus being spent on ensuring growth and solidarity within the EU. We have secured more resources for the Common Refugee Policy and for foreign policy and ensured more transparency in relation to the Common Foreign and Security Policy. As regards administration, Parliament was more willing to grant the necessary resources than the Council was, but we do, of course, agree that the administration of the EU needs to be flexible, more efficient and tailored to meet new needs.

I find it regrettable that we still have not had any statement from the Council and the Commission making it possible to remove the reserve on the appropriation for the development of rural districts. It must be stressed that voluntary modulation must not impinge on Parliament’s budgetary powers.

Finally, I would like to thank the rapporteurs, Mr Elles, Mr Grech, Mr Pittella and Mrs Gräßle for the substantial, constructive and serious work they have done - work that, I believe, has been topped off with positive results.

  Gérard Onesta, on behalf of the Verts/ALE Group. – (FR) Mr President, having heard the Commission and the Council, I am delighted that an agreement is in prospect. I would remind you that Parliament is prepared to increase funding for the CFSP from EUR 102 million to EUR 159 million, but it is prepared to do so because the Council accepts its amendments – at least a large part of them – on the financial regulation. This is an overall package that must not be undone at the last minute!

As far as the financial perspective is concerned, you know that our group voted against, because it felt that the framework was too tight: we are going to do our best now to make changes to it. Among the changes is support for studies on the added value of the programmes, but we, for our part, are already looking ahead to the thorough review announced for 2008 and 2009. Make no mistake – for us, doing better does not mean doing less! There is no question of our freeing ourselves of our obligations: that is why we declare ourselves in favour of doing away with the reserves.

As regards the financial regulation, we also agree on the need to simplify the procedures, so that everyone can get more involved in the European project, and we believe that we can simplify the procedures while maintaining their transparency and control with a great deal of rigour: both seem possible to us.

Finally, our group has presented an alternative package of increases for the external policy programmes because we believe that the instrument for stability, which includes a section on prevention, has suffered too much from the reductions imposed in the financial perspective. We must be careful not to focus our attention only on issues that are under the full glare of the media spotlight! It is true that the Middle East is very much affected at present but, in the Balkans, the fire is still smouldering …

I shall conclude by thanking the four musketeers from the Committee on Budgets –Mr Elles, Mr Grech, Mrs Gräßle and Mr Pittella – without whom nothing would have been possible.

  Esko Seppänen, on behalf of the GUE/NGL Group. – (FI) Mr President, Commissioner, Minister Lehtomäki, next year’s budget is less than 1% of combined GDP. The majority in our group are dissatisfied with this figure and with the fact that the Council does not want to build a more social Europe. Instead, it wants to militarise the EU and is proposing more expenditure for the Common Foreign and Security Policy. In negotiations on the budget, Parliament agreed to increase this militarisation expenditure when the Council agreed to compromise on the wording of the new Financial Regulation.

The Finnish Presidency showed a lack of skill in the conciliation process and harmony over the budget was only achieved after further talks. Hopefully, Parliament will not have to witness another failure on the part of the Presidency, as the outcome of conciliation has not yet been approved by the Council with regard to the Financial Regulation. It has remained unclear as to whether it will be approved. Given these circumstances, it would suit our group very well if Parliament were to use its budgetary powers and cut militarisation expenditure, which the Council has set as a priority area.

There are special circumstances prevailing next year. It is the first year of the new financial framework and not all the structural or other programmes are yet ready. The new Member States might not be ready either to utilise all the funds that have been allocated to them. If the low level of budgetary expenditure is approved, it will not be acceptable if again the Commission fails to spend EUR seven billion, as was the case this year. We hope for an improved implementation of the budget, Commission.

  Zbigniew Krzysztof Kuźmiuk, on behalf of the UEN Group. – (PL) Mr President, taking the floor in the debate on the 2007 budget on behalf of the UEN Group, I would like to remind you that this budget is an extremely important financial plan for the European Union for at least two reasons. First of all, it is the first budget of the Financial Perspective for the years 2007-2013, which is especially important to the new Member States. Secondly, it is the first budget of an enlarged European Union, a Union of the 27 Member States. These two facts alone mean that the level of spending proposed in the budget should be as high as possible.

The European Parliament has proved itself up to the task and has proposed spending of 122 billion euros, in other words 1.04 of the GNP of the European Union. Unfortunately, despite long negotiations with the Commission and the Council, the latter agreed to a figure of only 115.5 billion, that is, 0.99 of the GNP of the European Union. In this way the wishes of the wealthiest Member States, the so-called ‘one per cent club, have been fulfilled. This Group did not want budget spending to exceed 1% of the GNP of the European Union.

Fortunately, the unavoidable financial cuts resulting from the Council lowering the level of spending have only affected the new Member States to a limited extent. I would like to take this opportunity to express my hope that the solution proposed by the European Parliament which involves moving 30% of the funding for many budget lines, 400 million euros in total, will significantly contribute to rationalising budgetary spending. The European Parliament's agreement to return the funding for the Common Foreign and Security Policy to a level of nearly 160 million euros should mean that the Council and Commission will, more than they have so far, take into account the suggestions of Parliament regarding the direction and implementation of foreign policy.

  Nils Lundgren, on behalf of the IND/DEM Group. – (SV) Mr President, there is a copious stream of exhortations from various EU institutions to the Member States about how important it is for them to reduce their public expenditure. At the same time, this House constantly demands increased expenditure at EU level. The whole thing is absurd. The Member States spend public money on schools, health care, research, infrastructure and support for vulnerable groups in society, while most of the EU’s expenditure goes on a lunatic agricultural policy, misdirected Structural Funds and the financing of EU institutions that should have been closed down a long time ago.

The Member States’ expenditure is subject to continuous democratic scrutiny. Officials who are guilty of inefficiency, negligence, fraud or corruption are not granted discharge and are in many cases dismissed. Politicians who are not as honest and effective as voters demand are replaced in democratic elections. The EU’s expenditure is scrutinised by the Court of Auditors, which has still not, however, been able to issue a clean auditor’s report. When OLAF uncovers crimes, these do not go to court. Essentially, this House grants discharge irrespective of what emerges about the way in which the EU’s budget resources are used, and politicians never lose elections in their own countries because they have mismanaged EU funds. In brief, the Member States have some effective democratic control over the way in which taxpayers’ money is used, while the EU institutions and this House have not.

  Sergej Kozlík (NI). – (SK) It is generally true that what is approved by democratic agreement with a large majority of votes tends to be good. I assume that this premise will also apply after the voting next Thursday on the European Union’s general budget for 2007. In this context I would like to congratulate in advance the rapporteurs and the entire team, which has been negotiating the budget.

On the other hand, the budget parameters suggest that there are continuing problems. The gap between commitments and payment allocations, as well as, the relationship between the available funds and envisaged spending is still too great. This suggests that the arrangements for the draw-down and use of funds leave much room for improvement and, paradoxically, this is particularly true of countries that require the most development funding. This also applies to the new EU Member States, where actual drawdowns are now ranging between 20% – 30%.

As countries report that the funding available to them fully matches approved projects, it would appear that the basic problem at the moment is the implementation of those projects and the payment of their costs. The governments of EU Member States hold the key instruments necessary for dealing with the situation. Unless a turnaround is achieved, they will limit their potential for economic development and the aims of the long-term financial framework will remain nothing more than scraps of paper.

  Giovanni Pittella (PSE), rapporteur. – (IT) Mr President, ladies and gentlemen, thank you for allowing me to take the floor, despite my absence at the start of the debate. I should like to thank the Commissioner and my fellow Members, Mrs Guy-Quint and Mrs Jensen, for their words of appreciation to me, as well as Mr Elles and Mr Grech, for the positive way in which they carried out this budget procedure.

With this amending budget, we are giving the Member States back more than EUR 7 billion. This amount is partly due to the inclusion in the budget of a substantial increase in estimated revenue, and is partly attributable to a high level of under-utilisation of the appropriations voted on and available in the budget, in particular EUR 4 billion. This under-utilisation mainly affects the expenditure headings for agriculture, the structural funds and the pre-accession strategy.

We wanted to incorporate this debate in the one on the general budget precisely because the return of EUR 7 billion is not a trivial matter, but one that ought to worry us.

There are two aspects to the problem: on the one hand, the Member States constantly undervalue revenue, and this distorts people’s ideas about the percentage of wealth set aside by the Member States for Europe – in the light of these data and of the previous amending budgets, it is in fact quite clear that the amount of resources set aside by the Member States for the European purse is still less than the 1% prized out of the miserly national accountants. It is like me agreeing to allocate 1% of EUR 100 each year to a good cause and then, in fact, invariably earning more at the end of the year. Therefore, even you will admit that this operation by the Member States is not as generous as it appears.

On the other hand, even the resources that are actually available are not being fully used: if we analyse the typology of the under-utilised resources, we realise that the ones responsible for the under-utilisation are always the Member States, and not the Commission. I am not particularly generous towards Mr Barroso’s Commission but, in fairness, I must say that, where this issue is concerned, there is no direct responsibility on the part of the Commission, but rather that the main burden of responsibility lies with the Member States. We must take the opportunity afforded by this debate to encourage the Member States to be more effective in their monitoring and their controls and to be more vigilant so that allocated and appropriated funds are properly utilised.

Thus, instead of limiting ourselves to what is, by now, the tiresome exercise of blaming the European bureaucratic machine – the so-called Brussels eurocracy – let us also take a little look at our national situations, because if we more closely analyse the way in which our national public apparatus works, and if we call on the governments to work together in improving their administrative performance, then we might not have this figure of a EUR 7 billion return next year.

  Salvador Garriga Polledo (PPE-DE). – (ES) Mr President, I have been taking part in budgetary debates for twelve years and I have never seen a President of Parliament withdraw the microphone from the main rapporteur. I believe that your manner of presiding in this case has been rather unfortunate.

I would like to congratulate the four rapporteurs on their reports and on the consensuses that they have achieved under particularly difficult conditions.

My political group placed particular emphasis on the quality of spending – value for money – and on the parallel negotiation of a review of the Financial Regulation. In both cases we hope for a satisfactory resolution following the vote on Thursday.

At a time of great budgetary restriction, with budgets of around 1%, the only way this Parliament can improve the efficiency of Community policies is to set up an in-depth assessment of the resources applied and the results achieved.

I believe that this ‘value for money’ approach will be widely applied in the future. As a complement to this approach, we have the review of the Financial Regulation, which we need in order to increase the spending discipline of the Member States and of the Commission itself.

With regard to payments, I must point out that this is a budget that has been very cheap for the Council and that may be insufficient for the European Union, but it is the case that in the years to come Parliament will be much more demanding in terms of obtaining a sufficient level of payments to meet our commitments.

I shall end by considering what the President-in-Office of the Council has said about the effectiveness and the responsibilities of each of the institutions: we are demonstrating them. We are a particularly responsible institution and therefore from the outset we have supported the posts in the Commission and we have rejected the Presidency’s approach.

  President. I also regret having to chair this debate under these restrictive conditions. Let me state that, should there be time at the end of the debate, Mr Elles may ask to take the floor again.

I am aware that I made my interruption at the end of the speech and do not think Mr Elles had anything else of substance to say.

  Jutta Haug (PSE). – (DE) Mr President, before I deliver my speech, I would just like to say to Mr Garriga Polledo that I, too, can look back on 12 years of budget debates in this House and in those 12 years I have never before seen a rapporteur on the Budget, once his own speech was over, simply get up and not listen to what the Members of this House had to say.

In the course of a Budget procedure, the European Parliament, being an assembly of politically thinking heads, engages in a certain number of internal debates, but, when it came to the subject of agencies, there were no differences between the various groups; we agreed that cooperation with the agencies had been improved over the last three years, although that does not mean that the good cannot be made better. It is for that reason that we gave the agencies some homework to do before they could make use of all the money allocated to them. They have to send us their work programme with a list of tasks and information as to what has changed since the previous year and why. They are also required to implement the personnel policy guidelines already agreed to. Such are the tasks for the agencies, which they are able to deal with themselves.

Others, too, however, need to take action, the Commission for a start, whose function is to promptly – and I emphasise ‘promptly’ – coordinate their personnel plans and put them before us, but also those of us who sit on the specialised committees, who are called upon to evaluate the work of each individual agency by reference to the work programmes, and that has to be done in pretty short order too if the agencies are not to be penalised for something for which they are not responsible, so please let there be no cliquery, and when I say ‘prompt’, I mean that everything has to be sorted out in the first quarter of the following year.

  Kyösti Virrankoski (ALDE). – (FI) Mr President, Commissioner, Minister Lehtomäki, firstly I would like to thank the general rapporteurs, James Elles and Louis Grech, for a job well done. Next year’s budget shows budgetary discipline; its expenditure levels are less than 1% of GDP and clearly below the financial perspectives. This year the debate was overshadowed by certain difficulties with the Council. There was no great difference of opinion on budgetary expenditure. It was not so much about money as procedure. The Council reopened the debate on the agreed details a couple of times. At the moment, the decision on the new Financial Regulation is still open. At one time it was agreed on to the letter, but the Council has not as yet confirmed it. The written procedure to adopt it that has begun will salvage the situation tomorrow.

It is important that the Council should do all it can to allow Parliament to approve next year’s budget in its negotiated format on Thursday.

  Hans-Peter Martin (NI). – (DE) Mr President, I can go along entirely with what Mr Virrankoski has just said, in that I see the Budget Regulation as a really important matter, and would also like to reiterate my thanks to the Finnish Presidency of the Council for having picked up a really live issue by at least proposing that we might take a look at what posts might be saved in the Brussels institutions by reason of the changes this European Union of ours has undergone. Your inability to get this through is a lamentable sign of just how resistant to change everything here is, but you are passing on the baton to the German Presidency of the Council, and so one can indeed hope that it may be enabled to make headway against the red tape that it has announced its intention of doing something about – ‘red tape’ being understood to mean bureaucracy, unnecessary regulations and the difficulty of getting one’s hands on grants – while at the same time reducing the numbers of civil servants. That would be a way of saving a lot of money, and would also do something to restore the credibility of the institutions.

  Janusz Lewandowski (PPE-DE). – (PL) Mr President, last year, when we were concluding the annual procedure, we were uncertain about the fate of the multiannual Financial Perspective. This year, some uncertainty has re-emerged as to whether all the elements of our agreement with the Council will be fulfilled. Of course, I am referring here to the financial regulations and would like to clearly state, on behalf of the Committee on Budgets and in the presence of the Minister, that we need a guarantee and that the approval of the budget next Thursday is conditional on receiving this guarantee.

In 2007 we will have a new generation of multiannual European programmes for the twenty-seven Member States and this budget will have a number of specific characteristics. The first is the importance given to financial regulations, which are supposed to be more ‘user-friendly’ and, at the same time, more transparent. The second characteristic involves the exploitation of ever richer sources of information on the use of particular budget lines in order to ensure better planning and achieve what James Ellis calls ‘value for money’ in the future.

The third feature involves the careful planning of spending over the next year, bearing in mind possible delays. Fourthly, there is an effort to achieve greater democratic control within the scope of the Common Foreign and Security Policy, whilst still respecting the specific nature of this field. In fifth place, there is a move to end the argument regarding employment in the Commission. Having been provided with additional information, we agree to free up the reserves for Commission salaries, but still insist on a staff review. We expect that this will facilitate the recruitment of staff from new Member States in particular. These are the main points of the strategy for 2007.

I sincerely hope for a successful conclusion to this procedure, which will end the uncertainty regarding the financial regulations. I would like to sincerely thank the rapporteurs, the coordinators of the political groups and the Secretariat. I would like to thank Mrs Grybauskaité for her cooperation with the Commission which, in our view, has been better than it was last year, and I would also like to thank Minister Wideroos. I am sure that a successful end to this procedure on Thursday will compensate for certain understandable tensions.

  Neena Gill (PSE). – Mr President, I would like to congratulate both the rapporteurs on their work. Despite this effort, however, it cannot be said that Parliament has achieved much as a result of this year’s budgetary procedure. I deplore the fact that the Council has shown a worrying lack of respect for the views of Parliament throughout. We are the only democratically elected institution tasked with promoting the views of EU citizens, so I wonder whether the Council will even bother to respect its commitment to the agreement finally reached with the secondary budgetary arm. I sincerely hope so. I would like very briefly to make a few comments, not just in respect of the 2007 budget, but also bearing in mind the 2008 review.

First, our key ambition for the EU budget is that it must focus on priorities that deliver on the objectives set by us and our leaders. So it is with regret that I note that, although there has been some increase in the programmes, such as the Seventh Framework Research Programme, it is nowhere near the amount requested by the Commission and Parliament.

This is an extremely important policy area with a direct impact on the way the EU develops its global economy and how we are seen by the rest of the world. The Council knows this and has very vociferously tried to push the need for an increase in R[amp]D spending. However, we are still at 1.5%. It really is time for the Council to put their money where their mouth is.

Secondly, if the EU is to be taken seriously as a global player, it must back up its position with the funding necessary to play its role – for example in Asia, which is the largest and most populous continent, with 60% of the global population in some of the world’s poorest countries. Therefore, the continuing trend of reducing resources to that region is a disastrous policy.

  Markus Ferber (PPE-DE). – (DE) Mr President, Madam President-in-Office of the Council, Commissioner, ladies and gentlemen, let me say just a few words about the key points of the 2007 Budget, which will be the first under the new Financial Perspective. I think we have to very seriously ask ourselves whether it makes sense to first, through a laborious and bureaucratic process, extract money from the pockets of citizens and businesses, expend a lot of bureaucratic effort on transporting it to Brussels and then expend even more of the same on distributing it among the Member States.

This is where a great opportunity was missed by reason of the curtailment of the Financial Perspective and the failure to reformulate a plethora of legal bases, so that practically all the multiannual programmes had to be adopted afresh. In particular, Commissioner Grybauskaitė, I can only urge the Commission to seize the initiative for 2008 and 2009, when we will have to give some thought to the preparatory work for the next Financial Perspective.

The second key point I would like to mention is that the Commission is delegating more and more of its functions to agencies and to executive agencies. I look forward to the day when the Commission will submit proposals indicating its willingness to take staff back. We have just completed the biggest round of enlargement in the European Union’s history; by 1 January 2007, twelve new Member States will have joined it. Since many of the tasks it used to perform have been handed over to agencies, the Commission needs fewer staff, and I am waiting for it to produce very definite proposals as to how it is going to make Europe less bureaucratic, something that is not accomplished by what Commissioner Verheugen is doing, namely looking at laws, but by making cuts in personnel so that red tape is not generated in the first place.

I would like to close on a self-critical note with a thought that we might well take away with us, namely that we ourselves need to give rather more thought to our own strategy too. I think it highly regrettable that we have not done this as much as might be desirable when debates in this House are in the offing.

  Paulo Casaca (PSE). – (PT) I wish to thank Mrs Gräßle, Mrs Grybauskaitė and, of course, the Council on the success of negotiations on the new financial regulation. Congratulations are due in particular to our rapporteur for her hard work, persistence and tenacity. I must say, though, that in the years ahead we will have to carry out a thorough assessment of the effectiveness of this financial regulation in order to gauge the extent to which the rules contained therein may or may not be excessive and whether or not they are the cause of the abnormally large number of material errors detected every year by the Court of Auditors.

What we need is a financial regulation that naturally imposes budgetary discipline and the effective use of budgetary resources. We cannot, however, have a regulation that causes endless errors and puts us in our current, extremely embarrassing, position as regards the discharge, with the Court of Auditors systematically refusing to approve our accounts.

I shall finish, however, by simply expressing the hope that the Commission and our rapporteur will build on the work they have done thus far.

  Antonis Samaras (PPE-DE). – (EL) Mr President, ladies and gentlemen, I am a firm believer in development. In 2007 the cost of the Community budget will be less than 1% of the Community’s GNP. Is this an achievement for which we must be proud? Some of my colleagues are. ‘At least we managed to enforce budgetary discipline’ they say. I am sorry if I cannot share their feeling of high achievement that has engulfed them. While the European Union is expanding we, at the same time, limit our community budget, which does not make us more financially disciplined but less visible in the eyes of the European citizens.

I do not wish to be misunderstood, I believe deeply in the concept of financial discipline. If pointless expenses are being made then we should stop them. However, pointless expenses only exist in national budgets of Member States, not in our tiny community budget. Nevertheless, national expenses are outside the European Parliament’s jurisdiction and because we cannot make expense cuts on national budgets we are forced to make cuts on necessary expenses of our community budget.

However, we will not be taken seriously on matters of discipline and neither will we be taken seriously on matters of European integration. How are we supposed to go to Lisbon like this? The USA spends more than 20% of its GNP on its federal budget. We spend less than 1%! How are we supposed to compete with them? The truth is that we cannot compete with them. A continuously shrinking European budget seriously undermines our status, our credibility and our capacity to impose any changes.

The inadequacies of the Finnish Presidency, which we all viewed in the Committee on Budgets, only made things worse. Therefore, I fear that on a collective basis we are well below 1% of our capabilities as Europeans. I am sorry to say this, but I think we are heading towards the wrong direction.

IN THE CHAIR: MRS KAUFMANN
Vice-President

  Vladimír Maňka (PSE). – (SK) The 2007 budget is the first in a seven-year programming period and as such has undeniable strategic significance for the years ahead. It is extremely important that we step into the new financial period resolutely and sensibly.

I would like to thank the rapporteurs, the members of the Committee on Budgets, and all negotiators for their work in negotiating the European Union’s budget for 2007. In particular, I appreciate the support of the Socialist Group in the European Parliament for the effort made by the new Member States in reducing the administrative reserve by EUR 50 million. This issue is especially important to the new Member States. The essence of the problem is that keeping a large financial reserve would seriously jeopardise the recruitment of new staff. This is particularly true of the new Member States, as their quotas are far from being exhausted.

During their meetings with MEPs in the Committee on Budgets your officials, Commissioner, repeatedly drew attention to the problems that put the selection of staff for European Union institutions at risk. Thanks to their warnings and to the united stance of the Socialist Group in the European Parliament, things have moved ahead and we are now close to substantially slashing this unnecessary reserve. The common achievement of this objective will be an excellent gesture vis—à-vis the new Member States of the European Union, which now include Romania and Bulgaria.

The citizens of our countries are watching closely the interplay of words and deeds within European institutions. May I therefore urge your support for our efforts in achieving this common objective?

  Jean-Claude Martinez (NI). – (FR) Madam President, at the beginning of December, NASA announced that a budget had been adopted with a view to the installation of a space station on the Moon in 2020.

We, for our part, have a draft budget in 2020 that is designed to allow a train to make the journey from Hendaye in France to Irún in Spain. Thus, the United States have a budget to go to the Moon in a rocket and we, we have a budget to cross the Pyrenees by train! How can we explain this difference? The United States provides itself with a budgetary policy equal to USD 2 500 billion per year, while we, we toy with a budget of EUR 122 billion. We toy with 1 260 amendments, we toy with partnerships at international level, with Europalia, with Daphne, with Plan D – in short, we spread ourselves too thinly.

We have only two serious budgetary policies: agricultural policy and regional policy. The remaining budgetary headings, in particular heading 3 'Citizenship', represent a communication budget, for women, young people, consumers, the unemployed, people who have been made redundant, people who have been assaulted …

The real cause of this situation is not the lack of own resources: while there is indeed a real standstill, it is due to the ideology of balanced budgets, which prevents exceptional costs from being funded by exceptional resources, that is to say the loan, the loan intended for the major European networks, the rail network, for example. The real budgetary debate, ladies and gentlemen, does not consist in coming out for or against a European tax in 2014, but in coming out for or against a European loan to fund the future of research, of transport, of health care and of education.

  Ingeborg Gräßle (PPE-DE), rapporteur. – (DE) Madam President, I must now, so to speak, ‘avenge’ our Mr Elles, and so I am happy to accept the speaking time and would like, speaking on my behalf and his, to thank the House for its praise and its suggestions. As regards the Financial Regulation, and the completion of reforms, I would ask that we should present every bit as united a front as we have done to date. Mr Casaca has bidden me keep to the subject, and that I am happy to do. There is, in fact, a homepage – set up by me – on the subject of our experience with the Financial Regulation, on which the EU institutions or their advisors can provide us with information on how things are working out with the changed Financial Regulation. I believe that we have, for the first time with this Budget, succeeded – and this is Mr Elles’ great achievement as rapporteur – in bringing planning, implementation and monitoring closer together, and these are tasks that we will have to take very seriously in future.

  President. Before the Commissioner takes the floor, I will ask once more if there are perhaps any other questions that she might be able to help answer.

  Catherine Guy-Quint (PSE). – (FR) Madam President, I should simply like to say that we deplore the organisation of the debate on second reading in its current form. Indeed, every time, the Committee on Budgets does a huge amount of work, and we find ourselves penalised by the time allotted to us to present our work and to explain the way in which we have worked and the outcome we have achieved.

It would have been extremely interesting to have seen other Members take part in this debate and to have heard the Commissioner's and, perhaps, the Council's, response. All too often, we are overlooked when it comes to organising plenary sessions. We note, once again, that more than ten minutes remain, which several of our fellow Members could have used in order to outline the work they have done this year.

  Paul Rübig (PPE-DE). – (DE) Madam President, since the Finnish Presidency has shown that the Budget Regulation can work with the seventh research programme, I would like to ask our Commissioner to again enlarge upon the rules applicable to the Budget, which we regard as being of particular importance. The European Union comes in for much justified criticism, and this is where we want to see really visible progress within a short period of time, so I ask that these issues be taken seriously, particularly as regards their technical aspects, for they strike us as particularly urgent in political terms.

  Richard Corbett (PSE). – Madam President, this is not on the substance, but may I just congratulate you on putting into practice exactly what I suggested at voting time this morning, namely, to take catch-the-eye speakers at the end of a debate. I think we should do this for a short period at the end of every debate, but certainly when there is time available, as there is now. That is an excellent initiative, well done!

  President. You will be aware that that actually works only if there is a little time left over. It is not actually possible to plan plenary debates down to the last minute.

  Dalia Grybauskaitė, Member of the Commission. (LT) I would like to thank all participants in the debate for today’s discussions. Truly, a very large job has been completed – all political groups and the Committee on Budgets have really worked quite intensively, so I would like to thank them too, because it was a task involving political responsibility. Political opportunism was avoided and all the decisions were adopted with regard to the interests of Europe and all the people of Europe.

I would also like to thank my people, my Directorate, who is sitting here and who put in a lot of effort so that we could discuss this today, that is, what we are now doing. In addition, I would like to thank the Secretariat, both the Committee on Budgets (in French COBU) as well as the Council personnel, who equally managed to see beyond their personal ambitions and overcome their errors so that in the end we could obtain the solution that we now have on the table.

Therefore, I urge you all, including Europe’s budget and finance leaders who have spoken here today, to try and, as always, to impress on your colleagues in the European Parliament to vote positively and, on Thursday, to approve the budget of the new Europe, the expanded Europe of 27 countries.

  President. That brings the joint debate to a close.

The vote on the Elles and Grech reports will take place on Thursday. The Gräßle and Pittella reports will be voted on tomorrow.

Written statement (Rule 142)

  László Surján (PPE-DE). – (HU) It seems that we have prepared the 2007 Union budget without any fierce clashes, even though in July there had been no agreement reached on financial regulation, for instance. The budget will not work without valid regulations. This is why Parliament will not sign it, unless the new financial regulation comes into force.

In the 2007 budget, Parliament has, in accordance with the Council, increased disbursements, in return for which expenditure will not exceed 1% of the Union's GNI. Why did we not put up a harder fight? A new financial framework plan will come into force in 2007, various programmes will be relaunched, which is why only a small disbursement will be required. It has now also transpired that Member States have not used six billion euros of the total resources which were increased last year following some hard battles.

This year a new element has been introduced by Parliament in the form of a ‘value for money’ analysis, proving that the Union is putting the money to good use. Unfortunately, the solidarity between Member States is decreasing from one year to the next, with contributors citing difficulties with their national budgets for this, while failing to mention the benefits they have gained from the market opening up. We should not chip away at the budget, but what we need to do is allocate more resources where cooperation goes hand in hand with added value. Such areas include research and development, as well as cohesion. We can only win in the global competitive environment if we work together. But the will of Parliament is not enough for the European Union to grow to its potential. What we need is to have statesmen at the helm of our Member States and not politicians who only live for the moment.