REPORT on the 2004 budget in view of the conciliation procedure before the Council's first reading
(2003/2027(BUD))
18 June 2003
Committee on Budgets
Rapporteur: Jan Mulder
PROCEDURAL PAGE
For the 2004 budgetary procedure, the Committee on Budgets appointed Mr Jan Mulder general rapporteur for the 2004 budget, Section III - Commission, at its meeting of 2 December 2002.
At its meeting of 21 May 2003 it held an initial exchange of views on the 2004 budget (Section III - Commission) in view of the conciliation procedure before the Council's first reading and decided to present a report pursuant to Article 1(2) of Annex IV to the Rules of Procedure.
It considered the draft report at its meeting of 17 June 2003.
At that meeting it adopted the motion for a resolution unanimously.
The following were present for the vote: Terence Wynn, chairman; Anne Elisabet Jensen and Franz Turchi, vice-chairmen; Jan Mulder, rapporteur; Ioannis Averoff, Joan Colom i Naval, Gianfranco Dell'Alba (for Wolfgang Ilgenfritz), Manuel António dos Santos, Den Dover, Bárbara Dührkop Dührkop, James E.M. Elles, Markus Ferber, Salvador Garriga Polledo, Catherine Guy-Quint, María Esther Herranz García, Constanze Angela Krehl, Rosemarie Müller (for Göran Färm), Wilhelm Ernst Piecyk (for Jutta D. Haug), Joaquim Piscarreta, Giovanni Pittella, Esko Olavi Seppänen (for Chantal Cauquil), Per Stenmarck, Johan Van Hecke, Ralf Walter and Brigitte Wenzel-Perillo.
The explanatory statement will be presented orally in plenary sitting.
The opinions of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, the Committee on Agriculture and Rural Development and the Committee on Fisheries are attached.
The report was tabled on 18 June 2003.
MOTION FOR A RESOLUTION
European Parliament resolution on the 2004 budget in view of the conciliation procedure before the Council's first reading (2003/2027(BUD))
The European Parliament,
- having regard to Article 272 of the EC Treaty and Article 177 of the Euratom Treaty,
- having regard to the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council and the Commission on budgetary discipline and improvement of the budgetary procedure[1] and in particular Annex III thereof,
- having regard to the preliminary draft budget of the Commission for 2004,
- having regard to its resolution of 11 March 2003 on the guidelines for the 2004 budget procedure, Section III, Commission[2],
- having regard to Article 92 and Annex IV of its Rules of Procedure,
- having regard to the report of the Committee on Budgets and the opinions of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, the Committee on Agriculture and Rural Development, and the Committee on Fisheries (A5-0240/2003),
A. whereas the objective of the first reading conciliation between Parliament and Council is to evaluate the needs assessed by the Commission in the PDB and to secure an agreement on the level of expenditure for agriculture, international fisheries agreements and the common foreign and security policy, but it is also an opportunity to prepare an agreement on Parliament's priorities, including the pilot projects and preparatory actions, and an appropriate level of payments,
B. whereas the 2004 budget is essential for the successful integration of 10 new Member States in the financial system of the European Union and should thus contribute to the political aim of uniting Europe, and whereas it should promote economic, social and territorial cohesion, sustainable development, entrepreneurship and competitiveness and help improve the business climate and conditions for the creation of long term employment opportunities and sustainable economic growth, and strengthen the link between education and entrepreneurship,
C. whereas the financial perspective has been revised and adjusted in order to cater for the accession of 10 new Member States,
D. whereas the Commission has presented the preliminary draft budget (PDB) as a budget for 25 Member States, thus following Parliament's position,
E. whereas the 2004 PDB amounts to € 112.2 billion in appropriations for commitments and € 100.7 billion in appropriations for payments, which represents an increase of 12.6% in commitments and 3.3% in payments compared to the 2003 budget, which was adopted for an EU of 15 Member States, and whereas the increase for non-compulsory expenditure is 16.8% in commitments and only 0.8% in payments, while the increase for compulsory expenditure is 6.6% in commitments and 6.5% in payments,
F. whereas the projected figures for the 15 current Member States in the 2004 PDB are € 100.4 billion in commitments and € 95.6 billion in payments, representing an increase of 0.7% in commitments and a reduction of € 2.0% in payments, which are significantly lower than even the deflator of 1.7% used by the Commission for the annual technical adjustment of the financial perspective for the 2004 financial year, and whereas for EU-15 non-compulsory expenditure is reduced by 0.5% in commitments and by as much as 5.1% in payments, while the appropriations for compulsory expenditure increase by 2.4% in commitments and 2.3% in payments,
G. whereas appropriations for payments represent 0.99% of the Gross National Income (GNI) of the 25 Member States compared to 1.04% of GNI for the 2003 budget for 15 Member States, and representing the lowest share since 1987 (0.96% of GNP),
H. whereas the maximum rate of increase (MRI) for non-compulsory expenditure, established on the basis of Article 272(9) of the EC Treaty, is 8.0%, which combines an MRI of 2.7% for the current Member States and 5.3% due to the increase in EU GNI as a result of the accession of 10 new Member States in 2004,
General framework
1. Welcomes the fact that the Commission has presented the PDB for 25 Member States in accordance with the budgetary principles deriving from the Treaty, in particular the principle of unity as stated by Article 4 of the Financial Regulation, which provides that the budget must forecast and authorise all revenue and expenditure necessary for the European Union; underlines the fact that no discrimination must exist in the budget between the current 15 Member States and the 10 states that will accede to the European Union on 1 May 2004;
2. Considers that the 15 current Member States between January and April 2004 must only transfer the own resources to the EU budget that correspond to a budget for 15 Member States; intends to reach a political agreement with the Council in December 2003 on a budget for 25 Member States which respects the budgetary principles of unity, annuality and transparency, although the President of Parliament may only sign a budget for 15 Member States to respect the legal situation at 1 January 2004; notes that the Accession Treaty provides for the presentation of an Amending Budget before 1 May 2004 in order to adjust the budget to cope with 25 Member States; insists that the procedure be complemented by a firm commitment by the two arms of the budgetary authority to respect the figures for 25 Member States decided in the 2004 budgetary procedure;
3. Stresses that in parallel with the budgetary procedure the multi-annual financial frameworks of the codecision programmes under heading 3 must be revised in order to include the needs of the new Member States from 1 May 2004 onwards, as agreed in the Declaration on Article 32 and Annex XV of the Accession Treaty of April 2003, and will undertake all efforts to reach an agreement with Council in the July conciliation;
4. Welcomes the introduction of Activity-Based Budgeting (ABB) in the 2004 budget nomenclature in line with the entry into force of the new Financial Regulation; regrets that the Commission did not enter the human resources under each policy area and that the administrative costs entered in the PDB do not reflect the real costs by policy area; intends to evaluate on the basis of ABB the costs of the different policy areas in line with its political priorities;
5. Will examine the ratio between administrative and operational expenditure, and reaffirms its position that 'expenditure on administrative management' (former BA lines) has to be limited as far as possible in order to maintain the level of operational expenditure in the budget, but without neglecting the level of RAL;
6. Intends to further examine the level of payments, given that there is a significant imbalance between increases in commitments and in payments for EU-25, while payments for non-compulsory expenditure for EU-15 are reduced by € 2.9 billion compared to the 2003 budget;
7. Notes that the margin for payment appropriations left by the 2004 PDB amounts to € 10.9 billion;
Agriculture
8. Notes that the total amount of heading 1 for EU-25 (€ 47.9 billion) increases by 6.9% compared to the 2003 budget, corresponding to an increase of 39.1%, or € 1.8 billion, for heading 1b (Rural development), and only 3.1% (€ 1.3 billion) for heading 1a (Common agricultural policy, not including rural development), because direct income payments will not have an impact on the budget until 2005;
9. Notes that the margin for heading 1a in the 2004 PDB is € 1.4 billion, while no margin is left under heading 1b, and that the estimated agricultural budget is based on a euro exchange rate of 1.07 to the US dollar;
10. Deplores the fact that the common agricultural policy's share of total compulsory expenditure is increased from 40.2% in the 2003 budget to 40.8% in the 2004 PDB, which is in contradiction to Parliament's request to increase the global ratio of non-compulsory expenditure;
11. Seeks clarification on the inclusion of the Commission proposal for the mid-term review in the PDB, given that no decision has yet been taken by the Council, and asks the Commission to detail and possibly adjust the budgetary impact in its Letter of Amendment, taking account of Parliament’s position;
12. Welcomes the large increase of 31% for health and consumer protection included under heading 1a (Food safety, animal health, animal welfare and plant health, Articles 17 04 01 to 17 04 05, former Chapter B1-33), which should allow sufficient funding to be set aside for the development of better vaccines and testing methods and for health checks at the enlarged Union's borders;
13. Is considering creating a special item for insurance schemes for farmers in connection with emergencies and calamities such as foot-and-mouth disease, classical swine fever and avian influenza and other similar diseases;
14. Is considering providing extra resources for further development and implementation of environmental indicators and for the promotion of quality schemes in agriculture;
15. Expresses its concern about the 8.3% and 6.4% cuts in the 2004 PDB for promotion measures (05 08 05 01) and the audit of agriculture expenditure (Chapter 05 07) respectively;
16. Underlines the fact that the global increase of 29% in appropriations for rural development (as defined in the ABB, Chapter 05 04; heading 1b and EAGGF Guidance Section under heading 2) reflects one of the calls made in Parliament's guidelines for 2004; notes that the increase for heading 1b is basically due to the impact of enlargement while the increase for EU-15 for this chapter amounts to 8.8%;
Fisheries
17. Notes that the Commission has created under ABB nomenclature a policy area comprising all expenditure related to EU fisheries policy (Policy area 11: Fisheries), such as fishery markets (heading 1a), structural interventions for fisheries (heading 2), actions concerning control, conservation, data collection and research (heading 3), international fisheries agreements and organisations (heading 4), and - as in each policy area - administrative expenditure under heading 5 (internal and external staff, management support and buildings) and expenditure on administrative management (headings 2, 3 and 4);
18. Notes that, for the fisheries policy area in 2004, the Commission projects appropriations of € 972.1 million in commitments and € 983.3 million in payments, which is an increase of € 46.9 million (5.1%) in commitments and a reduction of € 15.2 million (1.5%) in payments, while of fisheries policy area appropriations € 73.0 million in commitments and € 34.7 million in payments are earmarked for the new Member States;
19. Intends to further examine the significant reductions made by the Commission for fisheries policy under heading 3, in particular in research and under the Structural Funds; considers that monitoring and control of the use of quotas must be improved and that better co-operation between the Commission's and Member States' activities is a priority in this respect;
20. Intends to examine the need for payment appropriations for the 'scrapping fund' (Article 11 06 10), given that the Council has not yet agreed on financing the fund under the 2003 budget; urges the Council to establish its position on the financing of the reform of the common fisheries policy;
21. Notes that the appropriations for international fisheries agreements (Article 11 03 01) have been slightly increased by € 1.6 million (0.9%) in commitments and € 1.9 million (1.0%) in payments; states that more detailed information is needed on the ongoing negotiations for renewal of agreements and protocols before Parliament's first reading in order to allocate the necessary resources; invites the Council to agree with Parliament to make a distinction within this article between the part that is related to the development of the third country’s fisheries industry (the so-called targeted measures) and the Community’s financial compensation in exchange for fishing rights so as to enhance transparency and control over implementation of the EU budget;
22. Takes note that the Commission has not included appropriations in the 2004 PDB for new fisheries agreements which are under negotiation without a clear indication about their conclusion during 2003 or 2004;
Common foreign and security policy
23. Recalls the agreement reached during the 2003 budgetary procedure on the provision of information to, and consultation of, Parliament on the common foreign and security policy (CFSP), including European security and defence policy (ESDP); deplores the fact that the Council did not respect this agreement as regards financial information and consultation of Parliament on the ESDP action in FYROM ('Mission Concordia'); therefore urges the Council to deliver this information, and henceforth to respect the agreement;
24. Notes the proposal in the PDB to increase the appropriations for CFSP by a further € 4 million (8.4%) in commitments compared to the 2003 budget;
25. Expects further justification for the need to increase CFSP expenditure in 2004, following the increase by € 17.5 million (58.3%) in the 2003 budget, on the basis of political dialogue and immediate and detailed information on financing and implementation in order to identify the real needs for CFSP Joint Actions, given the restrictions on funding for external actions; will in the meantime abstain from taking a final decision on the 2004 CFSP expenditure;
26. Is aware that the EU Police Mission (EUPM) to Bosnia and Herzegovina appears to be operating efficiently despite its late start; nevertheless draws attention to delays in providing essential equipment;
External actions
27. Notes that the deepening of relations with the neighbours of the enlarged Union currently under discussion (Wider Europe/New Neighbours Initiative) will entail additional budgetary needs; points to the need to ensure that adequate funds will be available in the TACIS, CARDS and MEDA programmes and possibly also in a new Neighbourhood Instrument; asks the Commission to look into the possibilities of using resources in the external action heading, complemented with resources from the revised pre-accession strategy heading, if and when appropriate;
28. Asks for further clarification of the announcement on funding for South Eastern Europe for 2004-2006 made by the Commission at the 4th Stability Pact Parliamentary Conference held at the European Parliament on 21-22 May 2003;
29. Underlines its support, in the light of the projected cuts, for measures to prevent and resolve conflicts and for actions on anti-personnel mines;
Pilot projects and preparatory actions
30. Notes that the margin of € 82.5 million left by the Commission under heading 3 for an EU with 25 Member States is not significantly higher than the margin left in previous years for an EU with 15 Member States; underlines the fact that the increase in other actions, including the codecision programmes, should leave sufficient scope for new programmes, pilot projects and preparatory actions;
31. Confirms the need to consider the continuation of existing pilot projects and preparatory actions based on their implementation; reminds the Council and Commission at this stage of the procedure of its intention to examine the introduction of new actions in the field of agriculture in heading 1a on an insurance scheme for farmers, the implementation of environmental indicators, and a quality scheme for food production; asks the Council to take a position on this; will consider the introduction of new actions in other policy areas at its first reading;
Structural operations
32. Expresses concern at the fact that the payment appropriations for the Structural Funds for the current 15 Member States have been reduced by € 4.2 billion, or 13.9%, compared to the 2003 budget; stresses that their volume should be assessed on the basis of not just the Member States' forecasts, but also the level of outstanding commitments and payments for the current financial year, and that the closure of programmes from the previous period (1994-1999) does not in any way justify any cuts in appropriations; notes that the payment appropriations for the Structural Funds and the Cohesion Fund for the new Member States amount to € 1.8 billion compared to commitment appropriations of € 6.7 billion;
33. Urges the Commission to effectively implement Article 31 of the Structural Funds Regulation 1260/99 ('N+2 rule') and to refrain from any lenient approach towards application of the N+2 rule;
34. Asks the Commission to inform Parliament on Member States' forecasts for Structural Funds payments for 2004 in order to assess the appropriate level of payments;
Small and medium-sized enterprises
35. Stresses the importance of promoting SMEs at EU level, too; deplores the fact that, in spite of the priority given to promoting entrepreneurship and the challenges of enlargement, the commitment appropriations in the PDB for 2004 as regards some specific budget lines for SMEs either remain at the 2003 level (e.g. improving the financial environment for SMEs - Article 01 04 05) or even decrease (e.g. Chapter 02 02, Encouraging entrepreneurship, decreases by 21.7% compared to the 2003 budget); intends to make additional resources available for developing an ambitious SME assistance policy in an enlarged Europe; takes the view that greater emphasis should be given to the social dimension, employment and vocational training;
Subsidies
36. Takes note of the adoption by the Commission of its communication containing the different legal basis for the activities financed under former Chapter A-30, as a result of the ABB nomenclature; urges the Council to co-operate closely with Parliament to adopt the legal basis before the end of the 2004 budgetary procedure; recalls that Parliament had expressed its preference for a framework regulation in order to avoid the rigidity of specific requirements imposed by various legal bases, depending on the Treaty article concerned; reminds the Commission that the legal aspects should not undermine the principles agreed in Article 107 of the Financial Regulation concerning the implementation of Parliament's priorities; will ensure that none of Parliament's political priorities are lost after the change in the system of subsidies; intends to examine all proposals together so as to ensure a coherent legislative framework for all activities under former Chapter A-30 in accordance with the new Financial Regulation;
Agencies
37. Notes that the amount given over to the agencies in the PDB for 2004 is € 212 million, under heading 3, as a result of the significant increase for the newly created agencies following adoption of their respective legal bases, the establishment of two new agencies and, lastly, what all of them need for enlargement; believes that, particularly given the increasing trend towards decentralisation of EU activities, the rigour imposed on the institutions should similarly apply to the agencies; points out that, according to the joint statement agreed in the context of the revision of the regulations establishing the agencies, the competent bodies should endeavour to settle the question of the agencies' final locations as early as possible;
38. Instructs its President to forward this resolution to the Council, the Commission, the Court of Auditors and the EU agencies.
OPINION OF THE COMMITTEE ON FOREIGN AFFAIRS, HUMAN RIGHTS, COMMON SECURITY AND DEFENCE POLICY
11 June 2003
for the Committee on Budgets
on the 2004 budget in view of the conciliation procedure before the Council's first reading
(2003/2027(BUD))
Draftsman: Johan Van Hecke
PROCEDURE
The Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy appointed Johan Van Hecke draftsman at its meeting of 5 November 2002.
It considered the draft opinion at its meeting of 11 June 2003.
At the last meeting it adopted the following conclusions by 19 votes in favour, 1 against and 1 abstention.
The following were present for the vote: Baroness Nicholson of Winterbourne, acting chairman, Geoffrey Van Orden, vice-chairman, Johan Van Hecke, draftsman, Ole Andreasen, Olivier Dupuis, Giovanni Claudio Fava, Efstratios Korakas, Catherine Lalumière, Nelly Maes, Hugues Martin, Edward H.C. McMillan-Scott (for Charles Tannock), Emilio Menéndez del Valle, Pasqualina Napoletano, Jean-Thomas Nordmann, Raimon Obiols i Germà, Arie M. Oostlander, Doris Pack (for Michael Gahler), The Earl of Stockton (for David Sumberg), Gary Titley, Joan Vallvé, Bob van den Bos.
SHORT JUSTIFICATION
1. The budgetary procedure is now well underway. It may be useful to recall some of the major milestones. In February 2003, the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy adopted a number of guidelines for the 2004 budget procedure Section III - Commission[1], many of which were integrated into the Report of the Committee on Budgets adopted in plenary on 11 March 2003[2].
On 30 April, the Commission adopted its Preliminary Draft Budget (PDB) and, in view of the conciliation procedure with the Council which is scheduled to begin in July, the Committee on Budgets will be adopting the Mulder Report[3]on 16-17 June 2003. At the same meeting - and of particular interest to this Committee - is the hearing being organised by the Committee on Budgets on NGOs.
The Council will adopt the draft budget on 16 July (in parallel with the start of the 2004 budgetary conciliation procedure, which will be preceded by a Trilogue on 2 July). The Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy will then start preparing the amendments to the draft budget with a view to adoption in early September.
(A note on administrative procedure in relation to this and a detailed calendar to Members will be distributed in due time.)
2. With regard to the conciliation procedure, the draftsman believes that the guidelines proposed in the AFET opinion of 18 February 2003 are as valid as ever and that as such it is worth restating the main points here:
- -the need for the European Union to be able to respond to worsening crises in the world as well as to unforeseen events through a more flexible budget procedure;
- -the need to give serious consideration to raising the annual ceiling to cope with new demands for financing arising from new responsibilities on unforeseen events;
- -no shifting in funding to provide for increases in one area to the detriment of another;
- -the need to maintain support for all regions now benefiting from the EU budget;
- -the need to at the very least maintain funding for Afghanistan, on human rights in general, and on landmines, at its present level;
- -the need to ensure appropriate financial assistance for the coming multi-annual programming period (2004-2006) for the Stabilisation and Association Process (SAP);
- -appropriate financial resources needed to help the countries of the former Soviet Union deal with nuclear hazards;
- -the need to have (and, by definition, to fund) adequate Commission representation all over the world;
- -the importance of transparency and the effective implementation of the budget, including an examination of the role of NGOs in the field of external policy;
- -the likely scenario, following future Treaty changes, whereby the common costs of military crisis operations will also be borne by the Community budget;
3. The draftsman is fully cognisant of the fact that the budget conciliation procedure traditionally focuses on three specific areas: agriculture, fisheries, and CFSP. With regard to CFSP, he endorses the three points made in the Mulder report. In particular, he draws attention to the flouting by the Council of its commitment to provide financial information and to consult the Parliament as regards ESDP action in FYROM, and restates Parliament's position that it expects to be kept fully informed not only about actions already undertaken but also about intended actions in this area, and for the Council to honour the November 2002 agreement (Joint Declaration of the Commission, Parliament, the Council) in full.
4. Given that the budget for external policy is approximately 1,000 times that for CFSP, the draftsman considers it important to draw attention to a number of points relating to external policy. Regarding aid to Afghanistan - and, latterly, Iraq - the points made are self-explanatory. At the Tokyo Donors' Conference on aid for the reconstruction of Afghanistan, the EU pledged a total of 1 billion dollars over 5 years, and is the largest single donor. However, the country is still desperately in need of more aid. (On 4 June 2003, the Finance Minister, Mr Ashaff Ghani, said that Afghanistan needed at least US$15 billion over the next 5 years as opposed to the $4-5 billion pledged in Tokyo). While an increase in EU funding is not foreseen at present, what will help is a better co-ordination between the various NGOs working in the field, something which Parliament and, in particular, the Foreign Affairs Committee, has repeatedly called for.
5. With regard to the reconstruction of Iraq, the EU's role is still unclear. However, in view of possible EU involvement, it is imperative for the Commission to consider the use of all available flexibility instruments/emergency aid reserve in accordance with the IIA (Inter-Institutional Agreement). While there is much work to be done in all areas, immediate and in the longer term, an obvious way of helping the people of Iraq is to work to improve the healthcare system. We urge the Council and the Commission to convey to the occupying powers the urgent need for reform in this sector, as well as for the provision of clean, running water and sewage disposal. As with Afghanistan, the message must be conveyed to contributing NGOS that they need to do their utmost to avoid fragmentation or unnecessary duplication of activities.
6. In conclusion, further clarification from the Commission is needed with regard to the total amount of funding foreseen by the Commission for South Eastern Europe.
CONCLUSIONS
The Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy calls on the Committee on Budgets, as the committee responsible, to incorporate the following points in its motion for a resolution:
1. Notes that humanitarian aid - to Afghanistan and now Iraq - has to remain a priority for the international community; notes that in 2003 the Commission has requested additional funds (€79 million) from the emergency aid reserve for humanitarian aid to Iraq, in addition to the €21 million already adopted for 2003; draws attention to the international pledges made regarding aid to Afghanistan and the need for these to be fully respected;
2. Points out the urgent need for further clarification on the conditions and issues surrounding the reconstruction of Iraq; underlines the fact that now that the UN is involved in reconstruction, the EU should consider the possibility of actively participating in partnership with the UN given the fact that the EU has committed itself to playing a significant role in the political and economic reconstruction of Iraq; stresses the importance of the EU's Member States reaching common objectives as to what is to be done in Iraq and, in particular, to focus on specific weaknesses such as the democratic deficit, the health system, the media, and civil society; with regard to possible future EU financing for the reconstruction of Iraq, urges the Commission to consider the use of all the available flexibility instruments/the emergency aid reserve in accordance with the IIA (Inter-Institutional Agreement);
3. Asks that the multi-annual financial framework for South Eastern Europe be reinforced; in this context, asks for further clarification of the announcement on funding for South Eastern Europe for 2004-2006 made by the Commission at the 4th Stability Pact Parliamentary Conference held at the European Parliament on 21-22 May 2003;
4. Highlights the imperative need for parliamentary co-operation projects for South Eastern Europe promoting an active civil society, fair and independent media, and a reform of the educational system, to be developed as key instruments within the contribution of CARDS to institution-building; calls on the Commission to report on progress in this area by the end of 2004;
5. Encourages the Commission to consider progressively opening up Community exchange programmes (such as Socrates and Leonardo de Vinci) for students and young professionals to SAP (Stability and Association Process) countries; in this context, invites the Commission to examine the financial implications for the CARDS programme;
6. Is aware that the EU Police Mission (EUPM) to Bosnia and Herzegovina appears to be operating efficiently despite its late start; nevertheless, draws attention to delays in providing essential equipment such as a helicopter for the EUPM, and asks for urgent rectification;
7. Notes that the deepening of relations with the neighbours of the enlarged Union currently under discussion (Wider Europe/New Neighbours Initiative) will entail additional budgetary needs; points to the need to ensure that adequate funds will be available in the TACIS and MEDA programmes and possibly also in a new Neighbourhood Instrument, using resources in the external action heading, complemented with resources from the revised pre-accession strategy heading, if and when appropriate;
8. Recognises that the performance of MEDA has improved, both as regards the level of commitments and the backlog in payments; notes that for the period 2004-2006, the Commission has proposed increasing funds for the Mediterranean region;
9. Is seriously concerned by reports that the EU's Special Envoy to the Middle East, Miguel Angel Moratinos, and his staff are experiencing major delays in receiving the necessary funding for their work on the ground; points out that not only is this hampering the day-to-day effectiveness of EU operations and the ability of its staff to respond quickly and flexibly to events but it is also sending out the wrong signals about the EU's commitment to resolving the Israeli-Palestinian dispute; recommends that the Council seriously considers ways of improving management of funds in this and similar cases;
10. Notes the fact that the EU has approved (and ratified) a plan to send a French-led peacekeeping force to the Democratic Republic of Congo, the first such force to be deployed outside of Europe; recognises that the question of part-financing, through the EU budget, of missions with defence implications still needs to be settled;
11. With regard to the legislative framework for the EU's development co-operation with Asia and Latin America, reiterates its call for the financial regulation applying to both Asia and Latin America to be divided into two separate financial regulations, as adopted by the European Parliament in its Resolution of 15 November 2001; considers the total amount proposed for the two regions in the Commission's proposal for 2003-2006 (COM(2002)340) to be adequate; however, the distribution by region should bear in mind that the resulting annual appropriations must, at the very least, maintain expenditure in both regions at the level of the annual commitments for 2002 and that the approximate 60:40 ratio between Asia and Latin America is to be maintained in the future financial framework; without implying any increase in the total funding and on the basis of budgetary neutrality, recommends the setting-up of the "Bi-regional Solidarity Fund" proposed by the European Parliament in the above-mentioned resolution;
12. Welcomes the budgetary authority's joint decision to review the title of heading 7 (pre-accession strategy); hopes that, in future, appropriate measures can be taken; welcomes the promise of significantly increased pre-accession funding for Bulgaria and Romania but points out that this increase must be accompanied by further efforts to improve the absorption capacity; urges the Commission to continue to pursue the process of helping the countries concerned to strengthen their administrative and absorption capacity.
OPINION OF THE COMMITTEE ON AGRICULTURE AND RURAL DEVELOPMENT
11 June 2003
for the Committee on Budgets
on the 2004 budget in view of the conciliation procedure before the Council's first reading
(2003/2027(BUD))
Draftsman: Albert Jan Maat
PROCEDURE
The Committee on Agriculture and Rural Development appointed Albert Jan Maat draftsman at its meeting of 3 December 2002.
It considered the draft opinion at its meeting of 11 June 2003.
At the latter meeting it adopted the following conclusions unanimously.
The following were present for the vote: Joseph Daul (chairman), Elisabeth Jeggle for Albert Jan Maat (draftsman), María del Pilar Ayuso González (for Arlindo Cunha), Christel Fiebiger, Georges Garot, Lutz Goepel, María Esther Herranz García (for Encarnación Redondo Jiménez), María Izquierdo Rojo, Salvador Jové Peres, Heinz Kindermann, Dimitrios Koulourianos, Astrid Lulling (for Michl Ebner), Xaver Mayer, James Nicholson (for Francesco Fiori), Karl Erik Olsson, Mikko Pesälä and Agnes Schierhuber.
SHORT JUSTIFICATION
The budget for 2004 is in many ways an exceptional one. First of all, it is the first budget to be drawn up on the basis of the “Activity-Based Budgeting” (ABB) system. Secondly, from 1 January 2004 to 30 April 2004 the budget will apply to 15 Member States; as of 1 May 2004, when 10 new countries join the Union, it will apply to 25 Member States.
In accordance with the ABB system, the budget is subdivided into 31 policy areas. Agriculture and rural development fall under budget area 5. In 2004 budget area 5 – ‘agriculture and rural development’ – includes:
- ∙most of the expenditure that was previously in chapter 1, representing a total value of €47.874 million, with the exception of €249 million for veterinary measures, €14.4 million for public health measures and €18 million for market measures in the fisheries sector. With this €47.874 million the Commission is still €1.431 under the Financial Perspectives established for the EU-25 in 2004;
- ∙the title also includes the appropriations earmarked for rural development. These include the amounts under title 1b, representing a total of €4 803 million, as well as the structural measures under the EAGGF guidance section. Title 5 also covers appropriations for external relations, mainly those allocated to SAPARD (Special Accession Programme for Agriculture and Rural Development) (€225.2 million).
In all, budget area 5 represents €51.572 million.
CONCLUSIONS
The Committee on Agriculture and Rural Development calls on the Committee on Budgets, as the committee responsible, to incorporate the following points in its motion for a resolution:
1. Notes the preliminary draft budget (PDB) for 2004 and is pleased to see that this draft places the Union in a position to welcome 10 new Member States on 1 May 2004 under the conditions laid down by the Berlin and Copenhagen European Councils;
2. Points out that the planned payments for 25 Member States represent only 0.99% of the EU’s gross domestic income and that, at €112.2 billion, the commitments are still €3.4 billion under the margin;
3. Welcomes the increase of 29.12% as against 2003 in the commitment appropriations for rural development (by ABB activity, this covers mainly the appropriations under the EAGGF Guarantee Section and those relating to structural measures under EAGGF Guidance). The commitment appropriations for rural development taken as a whole (€10 095.2 million) represent 19.57% of the whole of title 5, as against only 16.15% in 2003. This trend is in line with the wishes of the European Parliament;
4. Notes, however, that this increase is essentially due to the amounts allocated to rural development in the candidate countries (€1.733 million), whereas the rise in appropriations for EU-15 is 2.2% for both category 1a and category 1b;
5. Notes that for the 2004 budget the European Commission, on the basis of Regulation 2040/2000 on budgetary discipline, is using a dollar exchange rate of €1 = $1.07, based on the average rate for the first three months of 2003. Points out that the dollar exchange rate in the past few months has been higher than $1.07, and that it is currently about $1.15. Variations in the dollar in the order of 0.1 can, in the cereals sector alone, mean increased expenditure of several hundred million euro;
6. Calls on the Council to implement the margin, inter alia, in order to cover the additional needs arising from the higher euro-dollar exchange rate;
7. Notes that the Commission is already anticipating the outcome of the CAP mid-term review in counting on a reduction in aid for the dried fodder sector and lower support in the dairy sector as of 2004. However, the European Parliament, in adopting its draft reports on these two sectors, has called for the dried fodder regime to be maintained and does not wish to bring forward to 2004 the measures for the dairy sector scheduled for 2005 in Agenda 2000;
8. Welcomes the additional resources set aside for veterinary measures. Points out, however, that expenditure for the benefit of the existing Member States is not increased. Calls on the Council and Commission also to budget for additional resources for the EU-15 for veterinary diseases, inter alia for research into marker vaccines and differential tests;
9. Calls also on the Council and Commission to create a new budget item in the area of infectious diseases to support Member States that opt for protective emergency vaccination in the event of an outbreak. Protective vaccination obviates the need for slaughter operations at the expense of the European budget, since animals can be kept alive after vaccination, although serious market disruptions may occur. The new budget item would serve to support Member States in setting up emergency funds to counteract disruptions of this kind;
10. Welcomes the 18.4% increase in commitments for the benefit of young farmers;
11. Deplores the fact that fewer resources are set aside for promotion measures (05 08 05 01) and calls on the Council and Commission to provide for at least as many resources in 2004 as in 2003 (12 million);
12. Calls on the Commission to ensure that funding allocated in 1999 under the pre-accession programme SAPARD (05 05 01) to the countries joining the EU in 2004 is not lost after accession, so that the aims of socially sustainable adaptation of the agricultural sector and a raising of production standards in those countries may be achieved in the near future;
13. Welcomes the more than 50% increase in payments for the Community Initiative LEADER+ (05 04 02 06) envisaged in the PDV for 2004, compared with the 2003 budget, and the fact that it will facilitate implementation of integrated and high-quality new strategies for the lasting development of rural areas in Europe;
14. Calls on the Council and the Commission to create a special budget line for insurance schemes for the benefit of farmers in the event of emergencies and disasters such as foot-and-mouth disease, classic swine fever and avian flu, other similar diseases and extreme climatic conditions.
OPINION OF THE COMMITTEE ON FISHERIES
10 June 2003
for the Committee on Budgets
on the 2004 budget in view of the conciliation procedure before the Council's first reading
(2003/2027 (INI))
Draftsman: Brigitte Langenhagen
PROCEDURE
The Committee on Fisheries appointed Brigitte Langenhagen draftsman at its meeting of 23 January 2003.
It considered the draft opinion at its meetings of 20 February, 23 April, 19 May and 10 June 2003.
At the last meeting it adopted the following conclusions by 11 votes to 1 , with 0 abstention .
The following were present for the vote Struan Stevenson (chairman), Rosa Miguélez Ramos (vice-chairman), Brigitte Langenhagen (vice-chairman and draftsman), Hugues Martin (vice-chairman), Elspeth Attwooll, Nigel Paul Farage, Ian Stewart Hudghton, Heinz Kindermann, John Joseph McCartin (for Daniel Varela Suanzes-Carpegna), Patricia McKenna, Manuel Pérez Álvarez and Catherine Stihler .
SHORT JUSTIFICATION
Although, in the framework of the budgetary conciliation procedure, the discussions with the Council and the Commission essentially relate to compulsory expenditure, this opinion will also reflect the priorities that the fisheries Committee would like to see in next year's budget.
As far as the Fisheries Chapter is concerned, the 2004 Budget will be influenced by three major developments:
- Enlargement of the EU with 10 new Member States as from 1 May 2004 will have substantial consequences for the budget lines related to fisheries items;
- The reform of the Common Fisheries Policy will have an impact on next year's budget;
- The recovery plans for certain fish stocks will seriously affect fisheries communities in various regions of the EU.
Enlargement
Although in countries like Malta and Cyprus the sector is of high cultural importance, from the new Member States only Poland and the three Baltic States have a substantial fisheries industry.
In Poland, the largest of the acceding countries, the fishing industry as a whole employs about 40 000 people.
Latvia, with a coastline of 475 km in length and an estimated 12 000 people (that is 1% of the total working population) employed in the fisheries sector (6000 in both the primary and secondary sectors), is an important fishing nation with a significant export sector. The processing industry, consists of 34 enterprises, it is a major export orientated industry representing 3.4% of GDP in 1996 and employing an estimated 6000 people in total.
In Lithuania, the fisheries sector employed 3 510 people in 1996 as opposed to 10 261 in 1992. About 40% of the fleet are at least 20 years old. Lithuania has concluded agreements with Canada, the USA and the Faeroe Islands.
Estonia has the second most important fishing industry of the first phase countries of EU enlargement to the East. In fact, Estonia has a longer coastline than that of Poland (3780 km compared to 524km.) The fisheries sector accounted for 2.6% of Estonia's GDP and 10 470 people are currently employed in the fisheries sector.
In most of the new Member States, the aquaculture industry is a promising a rapidly growing sector, which creates an important number of new jobs.
Heading 1 Agriculture and Common Markets
Additional budgetary requirements: € 3 million
In view of the requirements of the functioning of the markets system in the new Member States, the consequences on the fisheries part under this heading will be relatively small. An estimated minimum adjustment of about €3 million will be necessary to guarantee the functioning of the market system and the intervention of fisheries products after EU enlargement.
Heading 2 Structural Actions
Additional budgetary requirements: 1.8 % of additional funding for enlargement under this Heading (€ 6.7 billion)
In order to bring the fisheries sector in the new Member States to the level of the EU-15 will require a substantial effort in the years to come. Both the processing and ancillary industries as well as the fleet will need massive structural assistance to achieve to the level required to operate adequately in the EU. The Financial Instrument for Fisheries Guidance (FIFG) equals to some 2% of the total amount available for Structural Funds. According to the Commission's Annual Policy Strategy for 2004, € 6.7 billion will be added to Heading 2 as a result of Enlargement. A proportionate share of 1.8 % would be sufficient for the needs of structural adjustment.
Heading 3 Internal Policy
Additional budgetary requirements: € 8.5 million
Pollution is one of the most serious problems affecting the fishing industry in the Baltic as much of its waters in both inland and coastal areas, are severely polluted and the fish stocks have already been damaged. The problem of overfishing in the Baltic further aggravates this sensitive situation, and stocks there appear to be in a state of permanent decline. More research funds will be needed to monitor the effects of pollution and to from the basis for an approach to tackle the existing problems.
Furthermore, inspection activities have to be increased as a result of the extension of the EU waters (Titles 11 07 02 (Financial contribution to Member States for expenses in the field of control) and 11 07 03 (Inspection in EC waters and elsewhere)).
Heading 4 External Policies
Budgetary requirements: € 15 million (Title 11 01 04 )
The 36 strong Polish deep-sea factory fishing vessels (1997 figures) seldom dock in Polish harbours as they fish the Okhotsk and Bering Seas, the Falklands, the Antarctic and New Zealand basing themselves in local ports. The fleet is also increasing its coverage in the Atlantic and might in the future be interested in participating in fisheries agreements. Also the fleets of the Baltic States operate outside the Baltic and the EU waters. Currently, vessels of the three Baltic States are active under a fisheries agreement with Russia. As was the case in 1986 when Spain and Portugal joined the EU, and the Community took over the bilateral fisheries agreements of these countries, there are negotiations going on with a number of third countries, including Russia, to conclude new fisheries agreements. Although it remains uncertain to what extent new Member States will take part in existing and new fisheries agreements, it is expected that for 2004 €15 million will be required to face up with the financial requirements involved in the conclusion of new fisheries agreements.
In order to respond to the requirements of budgetary transparency, it could be argued that the current budget line B7-8000 should be split up to better distinguish between the money for 'targeted measures' that is allocated for the development of the local fisheries industry and the financial contribution that can be spent at the discretion of the third country. However, it should be well understood that both parts together represent the commercial value of the obtained fisheries rights.
Heading 5 Administration
Additional budgetary requirements: 16 extra staff for inspection purposes; 14 extra staff for administrative duties.
As for the employment of additional staff from the new Member States, the Commission applies a so-called phase-in approach. This means that gradually, over a period of nearly a decade, the extra staff will be employed. However, in fisheries this approach very clearly is inadequate in the Inspection and Control regime. As from the date of the accession of the new countries two inspectors per new Member State that borders the sea will have to be employed. Therefore, in 2004 additional budgetary requirements under Title 11 Chapter 11 01 01 (Expenditure related to staff in active employment) would be needed. But also in other areas this phasing-in approach does not work. With regard to the workload at DG Fisheries of the Commission there will be a substantial increase in the sectors dealing with fleet management, management of the fleet register, collection and analysing scientific data, communication with the sector, international fisheries, fisheries markets and regional advisory bodies. In order to fulfil these tasks, 14 additional posts are required.
Reform of the CFP
This year, in the framework of the reform of the CFP, the European Commission has brought forward a number of important Communications, which will have budgetary consequences for next year. Three Communications that emerge from the long list of Commission proposals concern the improvement of Scientific and Technical Advice for Community Fisheries management (OJ C 47 of 27/02/2003, p. 5), the Communication concerning uniform and effective implementation of the CFP (COM (2003) 130) and the Communication concerning fisheries relations with third countries (COM (2002) 637). According to your draftsman, an appropriate follow-up and implementation will require additional financial resources.
In its report with regard to the socio-economic aspects of the reform, Parliament calls upon the Commission to introduce accompanying welfare measures for those who are most affected by the consequences of the reform.
In the future setting of European Fisheries, Producers' Organisations should play a more prominent role. In some Member States the system of self-management by these organisations has shown to be very successful which might be an example of how future European fisheries should be shaped.
Recovery Plans
At the Plenary session of March 1, Parliament adopted, with an overwhelming majority, a resolution on the current crisis in the so-called white fish sector, which mainly affects the countries bordering the North Sea. In Parliament's resolution, the Budgetary Authority is requested to make available this year aid funds for fishermen affected by this crisis. It has been requested that the flexibility instrument be used for this purpose. Since more recovery plans are expected and with the establishment of emergency recovery measures in the Baltic Sea, the draftsman urges the Commission to include a financial paragraph in each of these plans which should comprise compensation schemes for the losses incurred by coastal communities as a result of the proposed conservation measures.
CONCLUSIONS
The Committee on Fisheries calls on the Committee on Budgets, as the committee responsible, to incorporate the following points in its motion for a resolution:
Enlargement
1. The Common Markets Regime under Heading 1 will require a limited upward budgetary adjustment;
2. In view of the state of the fisheries sector in the new Member States, substantial structural adjustments will be required (Heading 2);
3. In Heading 3 in particular extra requirements will be needed in the field of scientific research and to implement the Community's inspection and control regime;
4. In order to cope with the obligations arising from enlargement with regard to fisheries agreements with third countries additional funding will be necessary (Heading 4);
5. In order to be able to perform its duties in the field of fisheries in an expanding Union, the European Commission's staff will have to be increased considerably (Heading 5);
Reform
6. In the view of the lack of sufficient high-quality scientific advice that should be the point of departure for management decisions within the framework of the CFP, appropriate funding should be made available;
7. In order to arrive at a truly effective inspection and control regime in the European waters, taking into account the Fisheries Committee's demands in previous budgetary years, additional financial resources should be allocated to the budget lines concerned;
8. Even if the Community wishes to continue its distant water fleet to be operating in third countries at the current level, additional budget is needed because of the tendency of increasing financial contributions when renewing existing fisheries protocols. If the Community wishes to extend the current number of agreements it would have budgetary consequences;
9. It should be considered to distinguish within Budget line B7-8000 (International Fisheries Agreements) between the part that is related to the development of the third country's fisheries industry (the so-called targeted measures) and the Community's financial contribution in exchange of fishing rights
10. Producers' organisations play a pivotal role for the future of sustainable fisheries. Their role should, therefore, be enhanced and for this purpose additional budgetary means should be made available;
Recovery Plans
11. There should be sufficient funds available to compensate communities affected by the recovery plans and emergency measures. For this purpose all recovery plans should include a financial chapter describing the accompanying measures which are foreseen to offset negative consequences of the mentioned plans.