The European Parliament,

–  having regard to Article 314 of the Treaty on the Functioning of the European Union,

–  having regard to Article 106a of the Treaty establishing the European Atomic Energy Community,

–  having regard to Council Decision 2014/335/EU, Euratom of 26 May 2014 on the system of own resources of the European Union(1),

–  having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002(2),

–  having regard to Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020(3) (the “MFF Regulation”),

–  having regard to the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management(4) (IIA),

–  having regard to the Communication from the Commission to the European Parliament and the Council on the Mid-term review/revision of the multiannual financial framework 2014-2020 (COM(2016)0603),

–  having regard to its resolution of 9 March 2016 on general guidelines for the preparation of the 2017 budget, Section III - Commission(5),

–  having regard to its resolution of 14 April 2016 on Parliament’s estimates of revenue and expenditure for the financial year 2017(6),

–  having regard to its resolution of 6 July 2016 on ''Preparation of the post-electoral revision of the MFF 2014-2020: Parliament's input ahead of the Commission's proposal''(7),

–  having regard to the draft general budget of the European Union for the financial year 2017, which the Commission adopted on 18 July 2016 (COM(2016)0300),

–  having regard to the position on the draft general budget of the European Union for the financial year 2017, which the Council adopted on 12 September 2016 and forwarded to Parliament on 14 September 2016 (11900/2016 – C8‑0373/2016),

–  having regard to Rule 88 of its Rules of Procedure,

–  having regard to the report of the Committee on Budgets and the opinions of the other committees concerned (A8-0287/2016),

A.  whereas in a situation of scarce resources, greater importance should be attached to the need to observe budgetary discipline and to use funds efficiently and effectively;

B.  whereas the dialogue between Parliament and the Commission provided for in Article 318 TFEU should stimulate a performance-oriented culture within the Commission, including increased transparency and enhanced accountability;

Section III

General overview

1.  Stresses that budget 2017 has to be considered in the wider context of the mid-term revision of the multiannual financial framework (MFF); stresses the need to ensure a balance between long-term priorities and new challenges and underlines therefore that budget 2017 has to be in line with the EU2020 targets, which represent its main orientation and overarching priority;

2.  Reiterates its firm conviction that, in the particular current context, initiatives such as the suspension of the ESI funds by the Commission, as provided for by Article 23(15) of Regulation (EU) No 1303/2013 (Common Provisions Regulation - CPR)(8), are not only unfair and disproportionate, but also politically unsustainable;

3.  Stresses that Parliament's reading of the 2017 budget fully reflects the political priorities adopted by an overwhelming majority in its abovementioned resolution of 9 March 2016 on general guidelines and its abovementioned resolution of 6 July 2016 on the “Preparation of the post-electoral revision of the MFF 2014-2020: Parliament’s input ahead of the Commission’s proposal”;

4.  Emphasises that peace and stability are core values that need to be maintained by the Union; considers that the Good Friday Agreement, which has proven vital to peace and reconciliation in Northern Ireland, must be protected; underlines the need for specific measures to ensure support for the regions which will be particularly affected in the case of a negotiated exit from the Union following the invocation by the United Kingdom of Article 50 TEU, in accordance with the expressed will of its citizens;

5.  Highlights that the Union is currently facing a number of serious emergencies and new challenges, which could not be foreseen at the time that the MFF 2014-2020 was set-up; is convinced that increased financial resources need to be deployed from the Union budget, in order to meet the political challenges and allow the Union to deliver answers and effectively respond to those crises as a matter of utmost urgency and priority; considers that a strong political commitment is needed to secure fresh appropriations in 2017 and until the end of the programming period for this purpose;

6.  Stresses the need for the 2017 budget to meet the needs of the migration challenge and slow economic growth following the economic crisis; notes that funding should be boosted for research and infrastructure projects as well as for fighting youth unemployment;

7.  Recalls that while Parliament immediately approved the additional financing needed for tackling the current refugee and migratory challenges while continuing with the support of sustainable development goals, it has always insisted that that challenge should not take precedence over other important Union policies, in particular the creation of decent and quality employment and the development of enterprises and entrepreneurship for smart, sustainable and inclusive growth; notes that the Heading 3 ceiling is vastly insufficient to provide for appropriate funding for the internal dimension of the current refugee and migratory challenges and insists on the need to adopt a comprehensive and human rights-based approach linking migration with development and guaranteeing the integration of migrant workers and asylum seekers and refugees as well as priority programmes, such as culture programmes; stresses that, in order to ensure the necessary additional funding in this field, an unprecedented resource to the MFF special instruments, including the full use of the Flexibility Instrument, as well as the substantial mobilisation of the "last resort" Contingency Margin, was proposed by the Commission in the 2017 Draft Budget (DB), and accepted by the Council;

8.  Reiterates its position that requests for additional funding needed for addressing the current refugee and migratory challenge should not be deployed to the detriment of the Union’s existing external action, including its development policy; repeats that the setting-up of the Facility for Refugees in Turkey (FRT), Trust Funds, and any other ad-hoc instruments cannot be financed by cuts to other existing instruments; is concerned that the establishment of ad-hoc instruments outside the Union budget could threaten the unity of the budget and circumvent the budgetary procedure, that requires the involvement and scrutiny of the European Parliament; strongly questions whether the Heading 4 ceiling (Global Europe) is sufficient to provide a sustainable and effective response to the current external challenges, including the current refugee and migratory challenges;

9.  Reiterates its conviction that the Union budget should find ways of financing new initiatives which are not to the detriment of existing Union programmes and policies and calls for the identification of sustainable means to finance new initiatives; is concerned that the Preparatory Action for defence research, which will amount to EUR 80 million over the next three years will be squeezed under the current budget of the MFF; is convinced that with an already underfinanced Union budget, additional efforts for operations, administrative costs, preparatory actions and pilot projects in relation to the common security and defence policy also need additional financial input from Member States; considers that the current MFF mid-term review/revision should be used by Member States in that respect; underlines the need to clarify the long-term funding of common defence research;

10.  Recalls that the Union ratified the COP 21 agreement and needs to dedicate part of its financial resources to respecting its international commitments; notes that, according to the Statement of Estimates for the financial year 2017, the budget is expected to allocate 19,2 % of expenditure to that aim; strongly encourages the Commission to pursue that track so to apply the 20 % target, in line with the Commission’s commitment to mainstream climate action in the current MFF;

11.  Calls on the Commission to present, under the 2017 budget and with adequate appropriations, an initiative aimed at providing public transport vouchers to young Europeans selected on the basis of a competition. A key objective of such an initiative would be to assess the feasibility and potential impact of a more generalised scheme in favour of, in particular, youth mobility, EU youth outreach and the promotion of equal opportunities;

12.  Reverses all cuts proposed by the Council to the DB; fails to understand the reasoning behind the proposed cuts and contests Council’s declared intention of recreating artificial margins in some headings such as subheading 1a (Competitiveness for Growth and Jobs) and Heading 4 (Global Europe), particularly considering that margins would in any way be too small to react to unforeseen circumstances or crises;

13.  Notes that the Council's reading failed to predict the actual execution of the Union budget for the last five years and that, taking all amending budgets into account, considerably more funds were needed in each of the final budgets; therefore calls on the Council to adjust its position in the conciliation committee in order to provide adequate funding for the 2017 budget immediately from the beginning;

14.  Announces that, for the purpose of adequately financing those pressing needs, and considering the very tight MFF margins in 2017, Parliament will finance the reinforcements above the DB by the exhaustion of all margins available and an increased recourse to the Contingency Margin;

15.  Compensates in full all cuts related to the European Fund for Strategic Investments (EFSI) in the Connecting Europe Facility (CEF) and Horizon 2020 for a total of EUR 1 240 million in commitments for 2017 via new appropriations to be obtained through the mid-term revision of the MFF; insists on the need to provide an effective response to youth unemployment across the Union; therefore increases the Youth Employment Initiative (YEI) by an additional EUR 1 500 million in commitment appropriations to enable its continuation; considers that the appropriate additional financing for these important Union programmes should be decided in the framework of the mid-term revision of the MFF;

16.  Expects that the Council will share this approach and that an agreement will easily be reached in conciliation, allowing the Union to rise to the occasion and effectively respond to the challenges ahead;

17.  Sets the overall level of appropriations for 2017 at EUR 160,7 billion and EUR 136,8 billion in commitment and payment appropriations respectively;

Subheading 1a – Competitiveness for growth and jobs

18.  Notes that subheading 1a is once again severely affected by the Council's reading with 52 % of the overall Council cuts in commitments falling within this heading; questions therefore how the Council's political priority on jobs and growth is reflected in this reading;

19.  Strongly disagrees with these cuts in a heading that symbolises the European added value and delivers more growth and jobs for citizens; consequently decides to reverse all cuts made by the Council;

20.  Delivering on the commitment taken in June 2015 to minimise to the maximum the budgetary impact of the creation of the EFSI on Horizon 2020 and CEF in the framework of the annual budgetary procedure, decides to fully restore the original pre-EFSI profile of the Horizon 2020 and CEF lines that were cut for the provisioning of the EFSI Guarantee Fund; stresses the importance of the Union's biggest research and innovation programme, Horizon 2020, which transforms great ideas into products and services, thus stimulating growth and jobs; demands the corresponding additional commitments appropriations of EUR 1,24 billion above the DB; expects an overall agreement on this pressing matter to be reached in the framework of the mid-term revision of the MFF; points out that EFSI should be improved in order to be fully efficient and effective by ensuring that the additionality principle is respected, by improving the geographical and sectorial balances and by improving transparency in the decision-making process;

21.  In line with its continued priorities for Jobs and Growth and after careful assessment of their absorption capacity so far, decides to propose some selective increases above the level of the DB for the COSME, Progress, Marie Curie, European Research Council, Eures and Erasmus+ programmes; notes that such increases can be financed within the available margin of this subheading;

22.  As a result, increases the level of commitment appropriations for subheading 1a above the DB by EUR 45 million (excluding EFSI, pilot projects and preparatory actions);

Subheading 1b – Economic, social and territorial cohesion

23.  Underlines that around one third of the annual Union budget is targeted at economic, social and territorial cohesion; underlines that cohesion policy is the Union’s main investment policy and a tool for reducing disparities between all regions of the Union, and that it plays an important role in the delivery of the Europe 2020 strategy for smart, sustainable and inclusive growth;

24.  Disapproves of Council's proposed cuts of EUR 3 million in commitments and, more importantly, EUR 199 million in payments under subheading 1b, including on support lines; calls on the Council to explain how those cuts are compatible with its objective of providing “necessary appropriations enabling the smooth implementation of the new programmes in the fourth year of the multiannual financial framework 2014-2020”; recalls that the level of payments proposed by the Commission under this heading is already 23,5 % lower than in the 2016 budget; stresses, in this respect, that any additional cuts in payments cannot be justified or accepted;

25.  Calls for an impact evaluation of Union policies based on impact assessment reports in order to determine to what extent they managed, inter alia, to reduce economic disparities, develop competitive and diversified regional economies and boost sustainable growth and jobs;

26.  Is alarmed by the significant delays in the implementation of the European Structural and Investment Fund cycle, which is likely to have a serious detrimental effect on the timely achievement of results on the ground but risks also to lead to the reconstitution of a new backlog of unpaid bills in the second half of the current MFF; urges the Member States concerned to promptly designate the remaining managing, paying and certifying authorities and tackle all other causes of delay in the implementation of the programmes; notes the Commission’s proposals for more simplification in this field and considers that every effort should urgently be made by Member States to ensure that the programmes reach full swing; calls consequently for more synergies and complementarity between public investment policies by the Member States budgets and the Union budget and those aimed at promoting the growth and sustainable employment creation which is the cornerstone for the Union;

27.  Takes note of the Commission’s proposal on the establishment of the Structural Reform Support Programme with a financial envelope of EUR 142 800 000 and underlines that this funding should be allocated with a view to strengthening economic, social and territorial cohesion;

28.  Regrets that the Commission has not proposed any commitment appropriations for the YEI in 2017 as a result of its frontloading in the years 2014-2015; reiterates its strong support for the continuation of the YEI; decides, as a first step and in line with the Regulation on the European Social Fund(9) which foresees the possibility of such a continuation, to increase the YEI by EUR 1 500 million in commitment appropriations and EUR 500 million in payment appropriations to provide an effective response to youth unemployment, drawing lessons from the results of the Commission's evaluation of the implementation of the YEI; notes that, in line with Parliament’s requests, an overall agreement on the appropriate additional financing of the YEI for the remainder of this programming period should be reached in the context of the upcoming mid-term revision of the MFF; urges Member States to do their utmost to speed up the implementation of the Initiative on the ground, for the direct benefit of young Europeans;

29.  Decides to restore the DB in both commitments and payments for the lines cut by the Council; increases commitment appropriations for subheading 1b by EUR 1 500 million and payment appropriations by EUR 500 million above the DB for the YEI, and by EUR 4 million for commitments and 2 EUR million for payments for the Fund for European Aid to the Most Deprived, thus exceeding the current ceiling for commitments by EUR 1,57 billion;

30.  Underlines that subheading 1b bears the biggest part of the current outstanding commitments (RAL), which stood at EUR 151 119 million at the beginning of September 2016, and risks jeopardizing the implementation of new programmes;

31.  Stresses the important contribution of cohesion policy with regard to the effective implementation of gender budgeting; calls on the Commission to support measures to establish appropriate tools in order to achieve gender equality, such as incentive structures using the Structural Funds to encourage gender budgeting at the national level;

Heading 2 – Sustainable growth: natural resources

32.  Notes that the Council reduced Heading 2 by EUR -179,5 million in commitment appropriations and EUR -198 million in payment appropriations, on administrative support lines, on operational technical assistance lines (such as the European Maritime and Fisheries Fund and the LIFE programme), on operational lines under the European Agricultural Guarantee Fund (EAGF), which is essential to maintain agriculture in living territories, and on decentralised agencies; notes that the biggest cuts in payments are borne by rural development; considers that the Amending Letter should remain the basis for any reliable revision of EAGF appropriations; restores the DB levels accordingly;

33.  Believes that the Union budget must prioritise initiatives that will facilitate a real greening of the economy;

34.  Anticipates the presentation of the Amending Letter for the emergency support package in particular for the dairy sector and decides to express its strong support for the agricultural sector in the Union; increases therefore the appropriations by EUR 600 million above the DB, in order to tackle the effects of the dairy sector crisis and the effects of the Russian embargo on the milk sector;

35.  Welcomes the allocations for research and innovation related to agriculture under Horizon 2020, to secure sufficient supplies of safe and high quality food and other bio-based products; underlines the need to prioritize projects that involve primary producers;

36.  Reiterates that CAP appropriations should not be used to support the breeding or rearing of bulls for lethal bull fighting activities; urges the Commission to submit without further delay the necessary legislative changes to give effect to this request, already stated in the general budget of the European Union for the financial year 2016;

37.  Emphasises that the implementation of the new Common Fisheries Policy entails a paradigm shift in fisheries management both for Member States and for fishermen and recalls, in this regard, the difficulties encountered in previous financial years when appropriations were reduced;

38.  Regrets, however, against this background and while welcoming the increase of EUR 30,9 million in commitments in the DB for the LIFE programme, that, this year again, the LIFE programme, with a total funding of EUR 493,7 million, constitutes a share of only 0,3 % of the whole DB;

39.  Highlights the previous problems entailed by the lack of payment appropriations for the LIFE programme, which impeded and delayed its proper implementation;

40.  In line with its EU2020 targets and with its international commitments to tackle the climate change, decides to propose an increase above the level of the DB for the LIFE + programme;

41.  Increases therefore commitment appropriations by EUR 619,8 million and payment appropriations by EUR 611,3 million (excluding pilot projects and preparatory actions), leaving a margin of EUR 19,4 million below the ceiling for commitments in Heading 2;

Heading 3 – Security and Citizenship

42.  Underlines that Parliament continues to put the current migration challenge at the top of its agenda; welcomes the Commission’s proposal of an additional EUR 1,8 billion above what had initially been programmed for 2017 to tackle the migration challenge in the Union; notes that the big deviation of the original programming advocates in favour of an upwards adjustment of the Heading 3 ceilings; stresses that the Commission proposes to finance those reinforcements largely through the mobilisation of the Flexibility Instrument (for EUR 530 million, thereby fully exhausting the funding available for this year) and the Contingency Margin (for EUR 1 160 million); given the unprecedented level of funding for migration-related expenditure (totalling EUR 5,2 billion in 2017 in Headings 3 and 4 and the mobilisation of the European Development Fund) and the proposals for applying flexibility on the table, does not request further reinforcements for migration-related policies; at the same time, will resist any attempts to reduce funding for Union actions in this field;

43.  Reiterates that budgetary flexibility has its limits and can only be a short-term solution; is strongly convinced that a forward-looking and brave answer in the face of these long-term refugee and migratory challenges, that involves the entire continent and shows no signs of abating, points to an upwards adjustment of the ceiling of Heading 3; considers that all recent budgetary decisions to secure fresh appropriations in this field have actually shown the need for a revision of this ceiling;

44.  In the context of the current security and migration challenges, welcomes the increase in the funding of AMIF (EUR 1,6 billion) and ISF (EUR 0,7 billion); considers that the increase for AMIF increases the need to ensure a fair and transparent distribution of annual funding between the different programs and objectives of the fund and a better readability on how these financial resources will be spent;

45.  Notes that a new Instrument for emergency support within the Union was adopted on 15 March 2016, with an indicative envelope of EUR 700 million over three years (2016-2018), and has already led to immediate results on the ground in the form of emergency support measures in response to the humanitarian needs of a large number of refugees and migrants arriving in the Member States; however, reiterates its position that in the future a more sustainable legal and budgetary framework should be envisaged in order to allow for humanitarian aid to be mobilised within the Union; insists on holding a regular dialogue with the Commission on the functioning and financing, present and future, of this Instrument, based on full transparency of information and impact assessment reports;

46.  In the face of increased threat levels in several Member States, the concurrent challenges of migration management, the fight against terrorism and organised crime and the necessity for a coordinated European response, requests funding for additional staff for Europol, with the aim of establishing a 24/7 counter-terrorism cell providing Member States' competent authorities with intelligence responses; considers that such an increase would also improve the fight against human trafficking (with a special focus on unaccompanied minors), the fight against cybercrime (new EC 3 Staff) and reinforce the human resources at the Italian and Greek hotspots; recalls that Europol currently has only 3 staff members at their disposal to be deployed to 8 permanent and additional non-permanent Hot-Spots in Italy alone; considers this number to be too low for Europol to be able to fulfil their tasks in terms of fight against human trafficking, terrorism and other serious cross-border crime;

47.  Welcomes the creation of a new budget line to provide funding for the victims of terrorism; supports resources being made available to tackle the broad areas of need of victims, including physical treatments, psycho-social services and financial support; believes that too often the needs of innocent victims of terrorism are either forgotten, or considered secondary, when measures to tackle the terrorist threat are proposed;

48.  Condemns the Council’s cuts of a total of EUR 24,3 million in commitment appropriations to numerous programmes in the areas of culture, the media, citizenship, fundamental rights and public health ; considers the cutting of culture programmes in order to free funds for the current refugee and migratory challenges to be a detrimental sign by the Council; deplores that many of those cuts seem to have been applied in an arbitrary manner and disregard excellent implementation rates; is of the opinion that even small cuts risk jeopardising the achievement of programme outcomes and the smooth implementation of Union actions; therefore restores all lines to the level of the DB;

49.  Insists on the need to reinforce funding for a number of actions under the Creative Europe and Europe for Citizens programmes that have long been underfunded; strongly believes these programmes are more relevant than ever, both in terms of boosting the contribution of the cultural and creative industries to job creation and growth and encouraging citizens’ active participation in Union policy making and implementation; fails to understand how the Council can justify reducing funding for SMEs in the cultural and creative sectors, when the Cultural and Creative Sectors Guarantee Facility, for which funding had already been backloaded, has only just been launched in June 2016 and constitutes an excellent illustration of an innovative solution to a significant market failure by building capacity and offering credit risk protection to financial intermediaries building loans in the cultural and creative sectors;

50.  Highlights that the Union programmes in the field of culture, education, youth and citizenship present clear European added value, additionalities and synergies with integration policies for migrants and refugees; invites the Union institutions, therefore, to respond with the appropriate increases in funding of directly managed programmes, such as Creative Europe, as well as for the relevant budget lines in the Structural and Investment Funds;

51.  Notes that the necessary budgetary guarantees for the preparatory activities of the implementation of the 2018 European Year of Cultural Heritage must be provided for;

52.  Recalls that the Union Civil Protection Mechanism represents a cornerstone of Union solidarity; underlines that the Union plays an ‘enabling role’ to support, coordinate or supplement the actions of the Member States in the prevention of, preparedness for, and response to disasters; notes the slight increase in the commitments for this programme;

53.  Welcomes the creation of a budget line for an EU Search and Rescue Fund, which is to cover search and rescue activities carried out by the Member States and coordinated at the Union level, in particular in the Mediterranean; is of the opinion that creating a dedicated Fund constitutes a more adequate solution than continuously increasing the budgets of Frontex or the newly created European Border and Coast Guard;

54.  Welcomes the creation of a budget line for supporting the European Citizens' Initiative (ECI) which is a newly created instrument aiming at involving citizens in the Union decision-making process and deepening European democracy; is of the opinion that the level of commitment appropriations as proposed in the DB is too low; decides to increase that budget line;

55.  Welcomes the increase in funding for communication of the Commission Representations, Citizens’ dialogues and ‘Partnership’ actions with appropriations for 2017 amounting to EUR 17,036 million in commitment appropriations and EUR 14,6 million in payment appropriations, as these concern initiatives to reach out to European citizens, gain their trust and foster their understanding of Union politics and policies;

56.  Underlines the need to provide the Joint Transparency Register Secretariat with sufficient and adequate administrative and financial means in order to fulfil its tasks, following the adoption of the new Interinstitutional Agreement on the Transparency Register.

57.  Notes that its reading (excluding pilot projects and preparatory actions) exceeds the ceiling of Heading 3 by EUR 71,28 million in commitment appropriations, while increasing payment appropriations by EUR 1 857,7 million; given the absence of a margin already at the DB level, proposes to finance these reinforcements under the ceiling, while at the same time mobilising the Contingency Margin for a number of essential migration-related expenditure items;

Heading 4 – Global Europe

58.  Notes that, in light of the ongoing refugee and migratory challenges, the Union’s external action is faced with ever growing funding needs which greatly exceed the current size of Heading 4; therefore, strongly questions whether Heading 4 ceilings are sufficient to provide for appropriate funding for the external dimension of the refugee and migratory challenges; deplores, that in order to fund new initiatives such as the FRT, the Commission chose in its DB to cut other programmes such as the Development Cooperation Instrument (DCI) and the Instrument contributing to Stability and Peace (IcSP); stresses that this should not come at the cost of policies in other areas; therefore, decides to mitigate, to a great extent, a shift of important financial resources from two instruments which amongst other things address the root causes of migratory flows; recalls that the primary objective of the Union's development policy must remain the reduction of poverty; regrets that appropriations for humanitarian aid and for the Mediterranean strand of the European Neighbourhood Instrument (ENI) are below those approved in the 2016 budget, despite their obvious relevance in tackling the large number of external challenges; deplores the unjustified cuts made by the Council;

59.  Decides, therefore, to reverse all Council’s cuts in Heading 4; decides also to reinstate the 2016 levels for the ENI Mediterranean lines and for humanitarian aid; furthermore decides to mitigate the cuts made by the Commission in the DCI and the IcSP; considers it essential to maintain the Union’s pivotal role and the level of financial support in supporting the Middle East Peace Process, the Palestinian Authority and UNRWA as well as ENI Eastern Partnership lines; underlines the importance of the European Instrument for Democracy and Human Rights;

60.  Decides to increase macro-financial assistance which had been significantly cut compared to 2016; believes that a higher funding level than proposed will be required to ensure that all future requests for loans can be accommodated;

61.  Lends its full support to the FRT and proposes to frontload to 2016 part of the Union budget contribution planned in 2017 due to its good implementation record and the large margins still available in the 2016 budget; calls, therefore, for reinforcing IPA II by EUR 400 million via an amending budget for 2016 and to mobilise the Contingency Margin accordingly; puts the same amount in reserve in the 2017 budget pending a comprehensive agreement on an alternative financing for the FRT, which would alleviate the unprecedented pressure put on other external financing instruments;

62.  Notes with concern that, despite their topical nature and significant size, EU Trust Funds as well as the FRT are virtually invisible in the Union budget; calls for them to be incorporated in a way that is more transparent and more respectful of the unity of the Union budget and of the prerogatives of the budgetary authority, and creates new budget lines to that end; also calls on the Commission to provide evidence that the use of financial instruments under the Trusts Funds does not result in diverting appropriations from the objectives under their initial legal bases; notes that the objective of leveraging national contributions on top of the Union budget has so far notoriously failed; highlights in that respect that, in future calls for a Union budget contribution to the Trust Funds, the Parliament will only agree to them once a comparable amount of Member States’ contributions has been delivered; invites, therefore, Member States to live up to their commitments as soon as possible;

63.  Notes that the guarantee fund for external actions, which covers defaults on loans and loan guarantees granted to non-Member States or for projects in non-Member States, has, according to the Commission report on guarantees covered by the general budget (COM(2016)0576), additional financial needs in order to reach the target amount, which consequently led to a provisioning of EUR 228,04 million being inserted in the DB; is concerned that these requirements put additional pressure on the already very tight ceilings in Heading 4;

64.  Welcomes the Commission’s budgetary proposals in relation to the new Migration Partnership Framework and the External Investment Plan; expresses its concerns, however, about the creation of potential new 'satellites' outside the Union budget; reiterates the need to keep full parliamentary scrutiny over the Union budget; strongly insists on the respect of the principle of the unity of the budget; is convinced that the new priority should not be financed to the detriment of existing Union projects; believes that additional flexibility should be mobilised in order to provide an ambitious framework to promote investment in Africa and the EU Neighbourhood equipped with adequate, fresh appropriations;

65.  Reiterates its request that the budget line for EU Special Representatives be transferred, in a budget-neutral manner, from the CFSP budget to the administrative budget of the EEAS in order to further consolidate the Union's diplomatic activities;

66.  As a result, increases the level of commitment appropriations for Heading 4 above the DB by EUR 499,67 million in commitment appropriations and by EUR 493,2 million in payment appropriations (excluding pilot projects and preparatory actions and including the transfer of EU Special Representatives to the EEAS budget);

67.  Deems it necessary to increase appropriations for the Turkish Cypriot Community budget line (+EUR 3 million) for the purpose of contributing decisively to the continuation and intensification of the mission of the Committee on Missing Persons in Cyprus and of supporting the bicommunal Technical Committee on Cultural Heritage, thus promoting trust and reconciliation between the two communities;

Heading 5 - Administration; Other headings - administrative and research support expenditure

68.  Considers that Council’s cuts are unjustified and harmful and restores the DB for all Commission administrative expenditure, including administrative and research support expenditure in Headings 1 to 4;

69.  Decides, in the light of recent revelations and in order to regain the confidence of Union citizens and the credibility of the Union institutions, to hold 20 % of appropriations of the Temporary Allowances for former Members in reserve until the Commission enforces a stricter Code of conduct for Commissioners to prevent conflict of interests and the revolving doors;

70.  Considers that interinstitutional administrative cooperation is a source of efficiency as know-how, capacities and resources developed for an institution can be made available to others; therefore asks to establish a system which limits administrative burdens to the necessary minimum, ensures the appropriate quality of services, provides the main responsible institution with the necessary budgetary means and incentivises the cooperation of the other institutions by limiting their share to the marginal costs caused by the cooperation and as such aligning sound financial management decisions on level of the institutions with the overall sound financial management of the budget;

Agencies

71.  Endorses, as a general rule, the Commission's estimates of the budgetary needs of agencies; notes that the Commission has already considerably reduced the initial requests of most agencies; Considers, therefore, that any further cuts proposed by the Council would endanger the proper functioning of the agencies and would not allow them to fulfil the tasks they have been assigned;

72.  Welcomes the budget increase for the efficient JHA agencies, especially those involved with migration and security; stresses that these agencies must be sufficiently resourced (including for investing in new technologies) and staffed when their mandates are increased;

73.  In the context of the current security challenges, and, bearing in mind the necessity for a coordinated European response, considers that some of these increases are not sufficient and decides to reinforce the appropriations for the European Police Office (Europol), the European Union’s Judicial Cooperation Unit, the European Agency for the operational management of large-scale IT systems (EU-LISA) and the European Union Agency for Network and Information Security (ENISA);

74.  In detail, stresses the need for sufficient human and material resources for Europol's newly established European Counter Terrorism Center, EC3 and IRU, including with regards to joint operational planning and threat assessment in order to strengthen a coordinated approach between the Member States to fight organised crime, cybercrime and internet related crime, terrorism and other serious crime; asks for additional funding for joint investigation teams;

75.  Recalls the planned improvement and interoperability of the different JHA information systems announced by the Commission in its communication of 6 April 2016 on "the future framework for stronger and smarter information systems for border management and internal security"; urges to foresee the need for appropriate resources for those technical solutions to be implemented swiftly and efficiently;

76.  Welcomes the inclusion in the 2017 budget of the adequate resources to support the long term transformation of Frontex into a European Border and Coast Guard agency and the transformation of EASO into a fully-fledged asylum agency; stresses that, while the resources for the European Border and Coast Guard seem adequate for now, the future needs of the agency in terms of operational resources and staff will have to be closely monitored so that the agency does not lag behind reality;

77.  In view of the deteriorating humanitarian situation in Europe’s southern neighbourhood, the increased number of asylum seekers, and mainly the intention to reinforce its mandate further than the Commission's proposal, decides furthermore to increase the 2016 budget appropriations for the European Asylum Support Office;

78.  Reiterates its disagreement with the Commission's and the Council's approach to staffing of the agencies, and therefore modifies a substantial number of establishment plans; underlines once more that each agency should cut 5 % of posts over 5 years as agreed in the IIA, but that new posts that are needed to fulfil additional tasks due to new policy developments and new legislation since 2013 have to be accompanied by additional resources and need to be counted outside the IIA staff reduction target; emphasises therefore again its opposition to the concept of a redeployment pool amongst agencies, but reaffirms its openness to free posts by means of achieving efficiency gains between agencies through increased administrative cooperation or even mergers where appropriate and through pooling certain functions with either the Commission or another agency;

79.  Stresses that substantial operational and personnel savings could be achieved if agencies operating from more than one place (ENISA, eu-LISA, ERA) were limited to one seat only; is of the opinion that current operational needs of those agencies make such change feasible; underlines that moving the European Banking Authority (EBA) away from London and merging it with at least one of the two other Supervisory Authorities could lead to considerable savings in the costs of the two agencies; invites the Commission to put forward a proposal in this respect;

Pilot projects and preparatory actions (PP-PAs)

80.  Having carried out a careful analysis of the pilot projects and preparatory actions submitted as regards the rate of success of the on-going ones, excluding initiatives already covered by existing legal bases and taking fully into account the Commission's assessment of the projects' implementability, decides to adopt a compromise package made up of a limited number of PP-PAs, also in view of the limited margins available and the ceilings for PP-PAs;

Special instruments

81.  Recalls the importance of the Emergency Aid Reserve (EAR) in providing a rapid response to specific aid requirements for third countries for unforeseen events and its earlier call for a substantial increase in its financial envelope, as part of the revision of the MFF; notes that its very quick consumption in 2016, likely to use up all possibilities of carry-over, is an indication that this special instrument will prove to be insufficient to address all additional needs in 2017; increases therefore its appropriations to reach an annual allocation of EUR 1 billion, pending a decision on the annual allocation of the EAR to be taken in the context of the mid-term revision of the MFF;

82.  Restores the DB for Reserves for the European Globalisation Adjustment Fund and the European Union Solidarity Fund in order to ease the mobilisation of these special instruments;

Payments

83.  Voices concern over the significant decrease in payments appropriations in the DB as compared with the 2016 budget; notes that this reveals implementation delays which are not only worrying for the delivery of Union policies but also entail the risk of rebuilding a backlog of unpaid bills at the end of the current programming period; considers that this matter should be tackled as part of the revision of the MFF; regrets, furthermore, the Council’s cuts in payments, despite the comfortable margins available below the ceilings;

84.  Stresses that, at the request of Parliament, a payment plan has been agreed with the aim of reducing the backlog of outstanding cohesion policy-related payment claims for 2007-2013 to a 'normal' level of EUR 2 billion by the end of 2016; points out that at least EUR 8,2 billion of unpaid bills were identified at the end of 2015 for 2007-2013 in the field of cohesion policy, a figure which is expected to fall below EUR 2 billion by the end of 2016; believes that a joint payment plan for 2016-2020 should be binding, developed and agreed between the three institutions; insists that such a new payment plan should be based on sound financial management and provide for a clear strategy to meet all payment needs in all headings until the end of the current MFF, and to avoid a 'hidden backlog' caused by an artificial slowdown in the implementation of certain multiannual programmes and other mitigating measures, such as the reduction of pre-financing rates;

85.  Decides to restore the DB in payments on all lines cut by the Council and reinforces payment appropriations on all those lines which are amended in commitment appropriations;

Performance-based budgeting

86.  Recalls that in its resolution of 3 July 2013 on the Integrated Internal Control Framework(10) Parliament shared the view expressed by the Court of Auditors that it makes no sense to attempt to measure performance without having budgeted on the basis of performance indicators(11), and calls for the establishment of a performance-based public budgeting model in which each budget line is accompanied by objectives and outputs measured by performance indicators;

87.  Welcomes the Programme Statements of operational expenditures attached to the DB as they partially respond to the request made by Parliament concerning objectives, outputs and indicators; notes that such statements complement the usual activity-based budgeting method with some performance data;

88.  Insists that with a view to simplifying the internal management tools of the Commission, Directors-General should stick to the political objectives and indicators contained in the Programme Statements of operational expenditure when adopting their management plans and annual activity reports, and that the Commission should draft its Article 318 TFEU evaluation report on this basis;

Other sections

Section I – European Parliament

89.  Maintains unchanged the overall level of its budget for 2017, as adopted by the plenary on 14 April 2016 at EUR 1 900 873 000; incorporates the budgetary neutral technical adjustments to reflect into the budget its recent decisions and releases the reserve on the transport of Members, persons and goods budget line;

90.  Approves the changes in its establishment plan and corresponding budgetary appropriations to respond to additional needs of the political groups; fully compensates these reinforcements by reducing the appropriations in the contingency reserve and fitting out of premises budget line;

91.  Recalls its political decision to exempt the political groups from the 5 % staff reduction target, as underlined it its resolutions on the budgets 2014(12), 2015(13) and 2016(14);

92.  Reduces the establishment plan of its General Secretariat(15) for 2017 by 60 posts (1 % staff reduction target), in accordance with the agreement of 14 November 2015 reached with the Council on the general budget of the European Union for the financial year 2016; recalls that the budgetary impact of this measure was already taken into account in the estimates;

93.  Reduces further its establishment plan by 20 posts to reflect the end of the transfer of posts foreseen in the cooperation agreement with the European Economic and Social Committee and the Committee of the Regions; stresses that as these posts were not budgeted, no appropriations need to be reduced on Parliament’s side;

94.  Encourages the Secretaries-General of the European Parliament, the Committee of the Regions and the European Economic and Social Committee to work together on possible further arrangements for the sharing of back office functions and services between the three institutions; calls on the Secretaries-General to also undertake a study on whether synergies in back office functions and services can also be made between the Parliament, the Commission and the Council;

95.  Maintains in its establishment plan for 2017 the new 35 posts, as requested in the DAB 3/2016 for the reinforcement of the security of the institutions; exempts these posts from the 5 % staff reduction target as they corresponds to new activities for the Parliament;

96.  Reiterates that the implementation of the staff reduction target should not jeopardize the proper functioning of the Institution and the exercise by the Parliament of its core powers, nor alter its legislative excellence, or the quality of the working conditions for members and staff;

97.  In light of the multiple problems encountered in this year's internal budgetary procedure, concludes that the overhaul of Chapter 9 and relevant parts of other chapters of its Rules of Procedure is inevitable in order to achieve what Parliament called for in its resolution of 14 April 2016 on Parliament's estimates of revenue and expenditure for the financial year 2017, i.e. that "any relevant information should be presented to Members of the Bureau and the Committee on Budgets at every stage of the procedure in a timely and intelligible manner and with the necessary level of detail and breakdowns in order to enable the Bureau, the Committee on Budgets and the political groups to conduct proper deliberations and base decisions on a comprehensive picture of the state and needs of Parliament's budget";

98.  Pursuant to paragraph 15 of its abovementioned resolution of 14 April 2016 on Parliament's estimates of revenue and expenditure for the financial year 2017, requires that the method of establishment of the budget of the Parliament on the basis of the current needs and not on the basis of a system of coefficients is used for the first time during the budgetary procedure for the financial year 2018;

99.  Recalls that the administration committed to submit a medium- and long term budgetary planning, including a clear distinction between investments and operating expenditure relating to the functioning of the institution, including the compulsory statutory obligations; expects therefore that 2018 preliminary draft estimates would be presented in the same format;

100.  Recalls the 2013 Fox-Häfner report(16), which estimated the costs of the geographic dispersion of the Parliament to be between EUR 156 million and EUR 204 million and equivalent to 10 % of the Parliament's budget; notes the finding that 78 % of all missions by Parliament statutory staff arise as a direct result of the Parliament's geographic dispersion; emphasises that the report also estimates the environmental impact of the geographic dispersion to be between 11,000 to 19,000 tonnes of CO2 emissions; reiterates the negative public perception caused by this dispersion and calls therefore for a roadmap to a single seat and a reduction in the relevant budget lines;

101.  Regrets that, despite numerous calls by the Committee on Budgets, the mid-term and long-term strategy for Parliament buildings is not available for informed committee deliberations;

Section IV - Court of Justice

102.  Regrets that the Council raises the standard abatement rate from 2,5 % to 3,8 % which is equivalent to a reduction of -EUR 3,4 million and in contradiction with the extremely high rate of occupation of posts of the Court (98 % at the end of 2015); readjusts therefore the standard abatement rate to the DB level allowing the Court to accomplish its mission in a context of the continuous increase in the judicial caseload;

103.  Decides furthermore to restore the DB regarding an additional six budget items cut by the Council across Titles I and II of the Court’s budget which would impact particularly strongly the priorities of the Court in the linguistic and security fields;

104.  Expresses its dissatisfaction with the unilateral statement of the Council and the related appendix on the 5 % staff reduction in the Council’s position on the 2017 DB according to which the Court still needs to reduce its establishment plan by 19 posts; underlines that those 19 posts correspond to the 12 and 7 posts duly granted by Parliament and the Council in the 2015 and 2016 budgetary procedures respectively to address additional needs and insists therefore that those 19 posts should not be given back, the Court having already duly achieved its 5 % staff reduction requirement by suppressing 98 posts during the period 2013-2017;

Section V - Court of Auditors

105.  Restores the standard abatement rate to its initial level of 2,6 % in order to allow the Court of Auditors to meet its needs in respect of the establishment plan;

106.  Restores an additional five budget items cut by Council for the Court of Auditors to implement its work programme and deliver the planned Audit Reports;

107.  Partially restores the DB regarding three budget items in line with proposals for savings identified by the Court of Auditors itself;

Section VI - European Economic and Social Committee

108.  Restores the standard abatement rate to its initial level of 4,5 % in order to allow the European Economic and Social Committee to meet its needs and cope with the continued reduction of staff in the context of the cooperation agreement between Parliament and the European Economic and Social Committee and the Committee of the Regions of February 2014;

109.  Reinstates the 12 posts and related appropriations cut by the Commission in the DB in accordance with the abovementioned cooperation agreement , thus reflecting the actual number of posts transferred from the European Economic and Social Committee to Parliament;

110.  Decides further to adjust the item concerning the supplementary services for the translation services to the level estimated by the institution itself and thereby partially compensating for the transfer of 36 posts from the European Economic and Social Committee to Parliament in line with the abovementioned cooperation agreement;

Section VII - Committee of the Regions

111.  Reinstates the eight posts and related appropriations cut by the Commission in the DB in accordance with the abovementioned cooperation agreement, thus reflecting the actual number of posts transferred from the Committee of the Regions to Parliament;

112.  Furthermore reinstates the appropriations cut by the Commission in its DB related to the office expenses and IT allowances of the Members of the Committee to the level estimated by the Committee to ensure sufficient financing for the office expenses and IT allowances of the Members of the Committee of the Regions;

113.  Regrets the cuts on the budget item “fitting-out premises” by the Commission in its DB and decides to restores the item to the level estimated by the Committee itself to respond to increased security needs, to keep the buildings in good shape and in compliance with legal obligations and to improve energy efficiency;

114.  Finally reinstates the appropriations related to the communication activities of the political groups revised down by the Commission in the DB to ensure adequate funding of the communication activities of the Committee’s political groups;

Section VIII - European Ombudsman

115.  Notes that the Council has decreased the DB of the Ombudsman by -EUR 195 000; underlines that this reduction would impose a disproportionate burden on the very limited budget of the Ombudsman and would have major impact on the institution's capacity to serve the European citizens effectively; restores therefore all the budget lines cut by Council in order to enable the Ombudsman to fulfil her mandate and commitments;

Section IX - European Data Protection Supervisor

116.  Notes with regret that the Council has decreased the DB of the European Data Protection Supervisor by -EUR 395 000; points out that this is in sharp contrast with the additional task conferred upon the institution by Parliament and the Council and would jeopardise the institution’s capacity to serve the European institutions effectively; restores therefore all the budget lines cut by Council to enable the European Data Protection Supervisor to fulfil his obligations and commitments;

Section X- European External Action Service

117.  Restores all lines cut by the Council;

118.  Decides furthermore to create a Strategic Communication Capacity budget item in line with the European Council conclusions of March 2015 and equip the EEAS with adequate staff and tools to face the challenge of disinformation from third states and non-state actors;

119.  Welcomes the written commitments of the High Representative of the Union for Foreign Affairs and Security Policy to address the existing imbalances in the EEAS staffing in terms of share of Member States diplomats and EU statutory staff in certain positions and to present a review of the EEAS human resources policy in the course of 2017; calls on the High Representative of the Union for Foreign Affairs and Security Policy to inform Parliament of the steps taken by spring 2017 at the latest, in advance of the start of the next budgetary procedure;

o
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120.  Is convinced that the Union budget can contribute to addressing effectively not only the consequences but also the root causes of the crises that the Union is currently facing; takes the view, however, that unforeseen events with a Union-wide dimension should be tackled by pooling efforts and putting additional means at Union level rather than by calling past commitments into question or reverting to the illusion of purely national solutions; stresses, therefore, that flexibility provisions are there to enable such a joint and speedy response and should be used to the full in order to make up for the tight constraints of the MFF ceilings;

121.  Instructs its President to forward this resolution, together with the amendments to the draft general budget, to the Council, the Commission, the other institutions and bodies concerned and the national parliaments.

(1) OJ L 168, 7.6.2014, p. 105. (2) OJ L 298, 26.10.2012, p. 1. (3) OJ L 347, 20.12.2013, p. 884. (4) OJ C 373, 20.12.2013, p. 1. (5) Texts adopted, P8_TA(2016)0080. (6) Texts adopted, P8_TA(2016)0132. (7) Texts adopted, P8_TA(2016)0309. (8) Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320). (9) Regulation (EU) No 1304/2013 of the European Parliament and of the Council of 17 December 2013 on the European Social Fund and repealing Council Regulation (EC) No 1081/2006 (OJ L 347, 20.12.2013, p. 470). (10) OJ C 75, 26.2.2016, p. 100. (11) Contribution of Kersti Kaljulaid at the hearing on the integrated internal control framework organised by CONT on 22 April 2013. (12) Texts adopted, P7_TA(2013)0437. (13) Texts adopted, P8_TA(2014)0036. (14) Texts adopted, P8_TA(2015)0376. (15) As a political decision on excluding the political groups from this calculation has been taken, this reduction is being applied to the Secretariat-General's part of the establishment plan. (16) Texts adopted, P7_TA(2013)0498.