Verbatim report of proceedings

Tuesday, 17 December 2002 - Strasbourg

5. Budget 2003 (as modified by the Council)

  President. – The next item is the report A5-0440/2002, on behalf of the Committee on Budgets, on the draft general budget of the European Union for the financial year 2003 as modified by the Council (all sections) [11138/2002 – C5-0600/2002 – 2002/2004(BUD)] and on Letters of Amendment No 2 (14847/2002 – C5-0571/2002) and No 3 (15169/2002 – C5-0595/2002) to the draft general budget of the European Union for the financial year 2003.

Rapporteurs:

- Mr Färm, in relation to Section III, and

- Mr Stenmarck, for the other sections.

Mr Färm will open the debate in his capacity as general rapporteur.

  Färm (PSE), rapporteur. (SV) Mr President, the annual budgetary procedure has passed off unusually smoothly. It is the first time in many years that it has not, for example, been necessary for us to hold a meeting of the Committee on Budgets during this last part-session in Strasbourg in order to deal with a whole lot of sticking points. The reason, of course, is that all the parties, no doubt partly because they all know how important it is for us to be able to demonstrate agreement prior to enlargement, have contributed to a businesslike and constructive process. I want to extend my thanks for the fact that this has happened, especially to the Danish Presidency and the Finance Minister, Mr Pedersen, whom I hope we shall get to see in this House on Thursday. He has helped guide the members of the Council to a very constructive settlement. I also wish to extend my thanks to the Commission and Mrs Schreyer, to my co-rapporteurs, Mr Stenmarck and Mr Colom I Naval, and to the budget rapporteurs from the other committees who have contributed very constructively to this process. Last but not least, I wish to thank my colleagues in the Committee on Budgets, the committee’s splendid secretariat and, especially, its splendid chairman, Mr Wynn, who has supported the work throughout.

When this process began just over a year ago, one of my objectives was to develop Parliament’s own procedures, and I think we have made some progress. We have established a dialogue concerning objectives and guidelines at an early stage. We have worked closely with the other specialised committees in order to get them actively involved in the budgetary process. We have developed the new budgetary debate in September, something which it will certainly be possible to develop further next year. These are things that have worked well.

Unfortunately, I also have to sound a critical note, not about our work on the budget but about the EU’s budgetary system. In my opinion, the problem is the long-term budget plan and the interinstitutional agreement that set sector-by-sector budget ceilings for seven years in a row. That is an entirely unreasonable model. Such long-term and detailed planning is not possible in a modern budgetary system. It is reminiscent, rather, of the Soviet Union. Certainly, I accept budgetary discipline. I am a keen adherent of budget ceilings, but that model is far too rigid. As long as we are governed by it, we shall all constantly be looking for ways of escaping from the straitjacket of the financial perspective. Since the advent of the budget plan in 1999, we have used the flexibility mechanism each year to a greater or lesser extent. We have also developed new, ever more creative methods of achieving flexibility. We have an emergency reserve of which we make ever more extensive use. We have added the new solidarity fund, which is also a flexibility instrument. This year, we ourselves have introduced the systematic use of what is termed frontloading, whereby we try to find unutilised resources in the current year’s budget in order to bring forward expenditure for next year and in that way give ourselves room for manoeuvre.

This creativity has been of great help, but it is not especially open or transparent. There is no sound long-term budgetary methodology. I would therefore call upon our colleagues in the Convention really to give some thought as to how, in future treaties, we can increase Parliament’s influence over the budget as a whole and, at the same time, create in the long term a less rigid model for budget ceilings which is less hostile to development.

I am also critical of the way in which the budget has been implemented, even though we can see improvements here and there, for example when it comes to aid policy. It is of course unreasonable that, in 2001, we should have received back 15% of the Member States’ contributions to the EU because we were unable to implement what we had decided in the budget. If the pace of implementation continues to be slow, there will be a risk in future years of a situation arising in which regions that have received promises of aid and candidate countries that have been given generous promises of pre-accession aid will, quite justifiably, protest when the promises are not fulfilled. If, however, the pace of implementation is improved and if, at a time when enlargement is making major new claims upon our resources, we are to honour the huge amount of payments that have been accumulating ahead of us, we shall instead be in danger, in future years, of encountering major problems in keeping to the budget.

In spite of these deficiencies, I think we have a lot to be satisfied with. Allow me to mention just a few of the most important areas including, of course, enlargement. By means of the developed frontloading model, we have been able to supply the Commission with those resources it needs, for example for the 500 new jobs required for enlargement. I am certain that my fellow MEP, Mr Stenmarck, will talk more about this as it relates to the budgets for Parliament and the other institutions. Enlargement has, however, also made its mark on other areas. The major new resources in terms of information will have bearing upon enlargement. A range of different bodies receiving aid from the EU are now investing those resources in integrating the new countries. We are concerned here with the social dialogue, youth cooperation, the combined fight against crime etc. We have also launched a new pilot project for cooperation between small companies and involving both the candidate countries and the countries along the EU’s new external border – Russia, the Balkan countries, North Africa etc. I believe that, of all that we have achieved, this is the most important.

Allow me also to mention the EU’s efforts in the fight against poverty and disease in the developing countries. Even if I personally am disappointed that we have not brought about clearer changes in agricultural policy, that being probably the most important thing we could have done in the fight against poverty, I am nonetheless pleased that we can make other sound contributions. I know that there is some criticism of the fact that we have reduced the appropriations to food aid and humanitarian aid. We have, however, done this partly in order to be able to bring forward aid to the famine-hit Horn of Africa, and partly in order to be able to free up resources for Afghanistan next year. That has been done only on condition that we and the Council promise to supply the extra resources that may be required for these purposes next year.

We have also been criticised for the way in which we deal with the EU’s contribution to the Global Health Fund. It is criticism that I consider to be unfair. We have prevailed upon the Council to more than double the amount it proposed in its first reading, from EUR 20 million to EUR 42 million. We have also got the Council to promise to try to produce a corresponding sum from the European Development Fund. We have, finally, a joint promise in any case to contribute those resources that are required if the EU is to be able to retain its place in the management of the fund. More than that I do not in actual fact think it is reasonable to demand. Finally, we have also achieved a very constructive settlement concerning Parliament’s future role in foreign and security policy, and that is something I believe we are all satisfied with.

Ladies and gentlemen, this budget will not be an historic one because of any dramatic conflicts or major new revolutionary budget initiatives. It will, however, be historic because it is the last budget with the old budgetary terminology. Next year, we shall all be forced to teach ourselves activity-based budgeting. It will also be historic because it is the last budget relating to an EU with 15 Member States. I am, above all, very pleased that we have, with such broad political agreement, in actual fact come up with those solutions required in order to prepare for enlargement. That, I believe, is the greatest success of this year.

(Applause)

  Stenmarck (PPE-DE), rapporteur. (SV) Mr President, we are now at the end of a comprehensive process of producing a budget for future budgetary years, and I should like to thank everyone who has contributed to this work. That applies, of course, to the Committee on Budgets and, especially, to its chairman, Mr Wynn, and to my Swedish co-rapporteur, Mr Färm, but it applies above all to the Committee on Budgets’ very competent secretariat. I also wish to extend a big thank you to both the Commission and the Council for their constructive cooperation, with special thanks also going to the Danish Presidency for having actively helped the EU’s two budgetary authorities jointly to arrive at the framework for category 5 at a conciliation on 19 July of this year, something I believe to have been very important.

Throughout the current year, the EU’s administrative budget, otherwise known as category 5, has been one of those areas that has posed genuine problems for the budget. We began the year with significant anticipated deficits for the 2003 budget. By various stages, these were subsequently reduced, giving us a manageable surplus and what I deem to be a wholly acceptable margin for the next budgetary year.

Within this budget, we have also managed to implement those priorities we set as early as when the guidelines were drawn up at the beginning of the year. The obvious top priority of all at that time was enlargement. Through the decisions subsequently made, we know that the Member States, notably through the positive decision taken at the Copenhagen Summit, are complying with their commitments regarding ten new Member States. If the agreement is signed in March, we shall be able to have 147 observers from all these countries in place by no later than April. The necessary decisions will have been taken and implemented by then. What we have also been concerned with is giving each institution the opportunity to complete its preparations for enlargement. This issue acquires further significance when we now consider the fortunate decision from Copenhagen.

Allow me to extend my thanks to all the institutions for having actively participated in this work and, especially, for the great loyalty they have all shown towards enlargement and the European project within the framework of the frontloading operation we have conducted together.

The second priority was to implement necessary reforms. These were necessary with or without enlargement, especially for the European Parliament. The main concern was with those key areas on which every parliament, be it national or European, must stand firm. For the European Parliament, it was a question of strengthening the budgetary structure, meaning, in the main, not the Committee on Budgets but, rather, the other committees in the extraordinarily important budgetary work they do. Parliament’s legislative function must also be strengthened. In a very short time, Parliament has been given significant legislative power, meaning that the basic conditions under which Parliament operates within this area must also be strengthened. These are key areas for the European Parliament, and it is precisely in these areas that we must stand especially firm.

The third priority is to tackle all this successfully. It is a question of coping both with the preparations prior to enlargement and with the commitment to the necessary reforms and of doing these things within the stated budgetary framework. We have succeeded in doing this. It means that we are now entering a new budget year with a fairly broad margin which will hopefully amount to slightly more than EUR 20 million. That applies on condition that Parliament approve the oral amendment which I know my fellow MEP, Mr Färm will table and to which I would in this way like to give my support. Allow me to point out that I am conscious of the fact that the Council wishes to see a still greater margin. I fully understand why that is so, and I promised at a conciliation to see what I could do to bring about a still greater margin. I subsequently went through the whole budget again, and we have now got this far but, unfortunately, no farther.

Allow me to conclude by observing that this is the last budget the European Parliament will adopt before enlargement to include ten new Member States. It has been important to implement all this in a way that means that the preparations for enlargement can be made in all the institutions. In my judgment, this is possible. It has also been important to make a number of decisions during the year to cope with long-term problems in category 5. It is my judgment that we have done this, moreover, but it is important for this work to be followed up. Further decisions along these lines will be necessary during the forthcoming budget year.

(Applause)

  Schreyer, Commission. – (DE) Mr President, ladies and gentlemen, the EU's budget for 2003 is indeed a presentable one. It is a shining example of how a budget can be successfully drawn up in such a way as to make the greatest possible savings whilst at the same time allocating sufficient funds to priority areas and to new tasks. This frugal and forward-looking budget has resulted from good cooperation such as one can only dream of – with Parliament, and with the rapporteurs. I can do no other than express my utmost appreciation to Mr Färm and Mr Stenmarck. My warm thanks, on behalf of the Commission, for this terrific cooperation go also to Mr Colom i Naval and of course to Mr Wynn, the committee's chairman, as well as to the Committee on Budgets as a whole. I am, naturally, also grateful to the Council. In saying this, I want to highlight the purposeful way in which negotiations were handled, preventing us from being bogged down in any single area, or even in what might have been matters of merely secondary importance, so that, on the contrary, we always proceeded with negotiations with their ultimate purpose in mind.

The appropriations for commitments in the 2003 Budget amount to EUR 99.69 billion, which can be used in entering into new commitments on the EU's behalf. That adds up to an increase of only 0.26% over against this year. I would like to see anyone else do the same! EUR 97.5 billion have been allocated to payments for the coming year, representing an increase of 1.9% over the current year, and thus below the rate of inflation. Expressed as a percentage of the EU's gross domestic product, only 1.02% is being spent on the EU Budget for 2003 – the lowest it has been for ten years. The financial planning voted in 1999 provided EUR 103 billion for 2003, that being EUR 5 billion more than the 2003 Budget has now actually required.

It is now a matter of certainty, ladies and gentlemen, that the 2003 Budget will be the last EU Budget for an EU of 15 Member States. I would like to congratulate the Danish Presidency of the Council on the result achieved at Copenhagen, but I must also take this opportunity to thank Mr Böge, Parliament's rapporteur on the financing of enlargement, for his support over the past year and a half. The financial package did indeed take a long time to prepare, and, as Commissioner for the Budget, I am proud and, of course, glad that what was concluded at Copenhagen is so close to what the Commission proposed in January.

Copenhagen really has now sent out the message that it is time for all the EU's institutions to roll their sleeves up. Now is the time to reach all the interinstitutional agreements, so that our institutions can make these changes effectively.

Of the new posts, 236 will be allocated to the Council for the purpose of this preparation, whilst 500 will be allocated to the Commission. On the Commission's behalf, I want to thank the budgetary authority for this decision. As regards where the Commission will be allocating these posts, 59 of them will be in the area of competition, 53 in agriculture, 56 in the Structural Funds, 10 in OLAF, 69 in the languages service and 60 in the Publications Office. All of these are areas in which it is clear that the acquis must be applied from day one, and preparations must be made for this.

It has also finally been decided how much by way of funds will be allocated to the new States in the years from 2004 to 2006; these will amount to EUR 10 billion for agricultural policy and EUR 21 billion for structural aid. These are large sums of money, and their implementation must of course be well prepared.

Parliament and the Council have welcomed the further policy priorities for the 2003 Budget, which are ‘stability and security’ and ‘sustainable and inclusive economic development’. These priorities are reflected in the 2003 Budget, in that the budget for DG Environment increases by 14%, and resources are allocated specifically to enhancing the competitiveness of small and medium-sized enterprises in border regions. The budget for DG Research and the Joint Research Centre totals EUR 3 billion for 2003, which underlines the importance of sustainable and inclusive economic development.

The ‘stability and security’ priority has to do with measures in the area of justice and home affairs – my fellow-Commissioner Mr Vitorino's budget is increasing by 11% – and in the area of foreign policy. The EU Budget will, in the coming year, bear the joint costs of the Police Mission in Bosnia. This is an important step towards a common foreign and security policy.

We are continuing to stand by our promises and by the policy commitments we have made in the Balkan region. I believe it has to be emphasised that a large budget has been proposed, standing at over EUR 680 million in 2003, and this is for the fourth time running. Afghanistan can count on a high level of support from the EU, and the Global Health Fund will again receive substantial resources for its fight against Aids, tuberculosis and malaria. In these areas, Europe is indeed the largest donor.

This year, ladies and gentlemen, we have set up the new Solidarity Fund for aid in cases of major natural catastrophes in the Member States and in the candidate countries. In future, it will be funded to the tune of EUR 1 billion every year, and that includes 2003.

As a whole, the balance sheet for work on budget policy in 2002 is an extremely favourable one. A completely new Financial Regulation covers the EU's Budget, as also the European Development Fund and the other facilities. Today, the Commission adopted in its entirety the rules for implementing this Financial Regulation. This means that the reform of financial management exists not only on paper; it governs the activities of all those who work with European resources, so that the 2003 Budget will be the first to be implemented according to the new rules of the new Financial Regulation.

As I have already emphasised, the 2003 Budget is the last for an EU of 15 Member States. We now have to adapt the Financial Perspective to the Copenhagen conclusions, in order to draw up the 2004 Budget for an EU of 25 Member States. As early as February, we will be holding a trialogue to discuss the ongoing adaptations, and by then, it is to be hoped that there will be greater clarity about the future of Northern Cyprus. Pre-accession aid for Bulgaria and Romania is then to be replenished, and the budget for pre-accession aid is then to include Turkey. That is what the Copenhagen Council decided. So it is that the budget reflects the dynamics of European development. I look forward to cooperating on these issues for the future, being sure that we will find good solutions to them, as we found the right solutions for the budget for 2003.

  Ferber (PPE-DE). – (DE) Mr President, Mr President-in-Office of the Council, Commissioner, ladies and gentlemen, compared with those we had to handle in previous years, the budget procedure for 2003 was indeed a very pleasant one, for which I would like to express warm thanks to both the rapporteurs, Mr Färm and Mr Stenmarck. It has thus become established practice for us to favour Scandinavian earnestness in the budget procedure, and the fact that we additionally had the Danes presiding over the Council, meant that we could find our way around many cliffs at an early stage and make the procedure very harmonious, especially at second reading stage. I believe that to be deserving of particular mention.

In the PPE-DE Group, we are very proud of the way we were able to join with our colleagues from the other groups in putting across a multitude of our concerns, and it goes without saying that we are asking you, Commissioner, to support us accordingly. I will say, very clearly, here and now, that there is little point in this Parliament, with the Council, laboriously drawing up a budget, only for many things of particular importance to both parts of the budgetary authority not to be reflected in daily life when the budget ends up being passed into law.

If you are talking about the budget figures for 2003, with the minimal increase that we all greatly welcome and support, then honesty requires of us that we add that it took a large number of measures on our part in order for these slight growth rates to be made possible, as the 2002 Budget was not passed in the form in which it was drawn up.

Here I am thinking of what our technical jargon so splendidly terms frontloading measures, that is, the use of funds from 2002 to discharge commitments which will be incumbent on us only in the coming year, hence the transfer of resources allocated by way of the Solidarity Fund, from the 2002 Budget to 2003. Add all that together, plus the expected supplementary budget, and it all amounts to a tidy few billions. Honesty demands that we say that. What helps to finance next year's low level of increase is the fact that we are transferring funds from the 2002 Budget that were used either wrongly or irregularly.

We in the PPE-DE Group would like to expressly call upon the Commission not to let up in the area of its own reform. We look forward with eager anticipation to the reports we have been promised by Commissioner Neil Kinnock, who is responsible for these matters, which we will examine in very great depth in order, of course, to consider what further measures we can derive from them.

One thing I consider to have been a great success – something that the PPE-DE played a part in initiating, and which, thankfully, was taken up by other Members of this House – is the marked improvement on the question of cooperation between the Council and Parliament in defining foreign policy measures. I think that the procedure we came up with here is suited to overcoming the democratic deficit that we find in the Council's intergovernmental relations due to the national parliaments no longer being responsible and the European Parliament not yet being involved. The dialogue procedure that we have agreed on with the Council builds a bridge leading to greater democracy in the definition of Europe's foreign policy objectives.

I consider it a great success on our part to have succeeded in securing the promises of aid for Afghanistan for 2003 as well, but I do think – and this has been discussed here on many occasions – that it is not acceptable for Europe's foreign ministers to keep on coming up with new things to focus on, so that the old priorities suddenly become redundant, and we have the laborious task of setting it all out in figures. We have had a quite respectable success in combining new challenges and old commitments in a good compromise for 2003, for which a heartfelt thank-you to all who helped to make that possible!

I do think that this is, as a whole, a respectable Budget, and I again ask the Commission to see to it that what was decided by the Council and Parliament is also implemented in 2003.

(Applause)

  Walter (PSE). – (DE) Mr President, Mr President-in-Office of the Council, Commissioner, ladies and gentlemen, it is these speeches that remind us how close together we have been this year when dealing with specialised issues, as I believe that we are almost always discussing the same topics in this House, the very same ones that we are outlining now. I cannot, of course, stay out of this either, but I want to say something now, something to which the European public might perhaps be more determined to pay attention than it has been on repeated occasions over the past few years. Commissioner Schreyer referred to the rate of increase in the budget's commitments, which stands at 0.26%. Our budget does not show the rates of increase – let alone the rates of inflation – that were provided for in Berlin. We are well below them. In Berlin, the precaution was taken of creating a margin in order to make enlargement possible and easier. With a 0.26% increase, our present budgetary conduct brings us another step closer to that.

Take a look at payments, and the figure of 1.9% does not, at first sight, appear to be very much. It is substantially less than what would be needed to reduce the debts that are still outstanding. Despite that, 1.9% is more than what is currently available to many national Finance Ministers to draw up their own budgets. Nonetheless, we stick with this 1.9%, because it is important. We have to consider this budget, and what it covers, as a whole. We have a budget of less than EUR 100 billion! That is 25% less than what the fifteen States of the European Union spend on defence. What we get for 25% less – in other words, for EUR 100 billion – is cooperation across Europe on environmental matters, in the field of research and development, and on cohesion, so that we do not leave the more vulnerable in the lurch. Agriculture is wholly europeanised, and preparations are being made for youth exchange activities. We are preparing for enlargement, we have a common foreign and security policy, and we collaborate on justice and home affairs. I believe that it has to be said loud and clear that we spend substantially less on all of these things, so as to give Europe a viable and peaceful future, than is spent at national level in the area of defence policy alone.

Even though we have this tight budget and even though we have to take on new things with every passing year – as has already been said, there are new tasks in category IV almost every year – we nevertheless manage to set priorities that advance the economic development of the continent of Europe. Not only do we maintain and sustain a continent full of large corporations, but also the small and medium-sized enterprises on this European continent can make use of the opportunities offered by a shared internal market. They do not have their own departments to deal with tax or legal matters; what they need, in order to make the best use of this European internal market, with all its advantages, is help, and that is what we give.

We respond to the ageing of society in the European Union. Our own financial planning still needs to take this more into account. I have already made repeated reference to pensions, but we want in future to respond to the ageing of European society as a whole.

One very major priority has been and still is category IV. I read a newspaper report today, which stated that the European Parliament did not regard the fight against Aids as important. Let me point out now that Parliament has quadrupled the sum of money originally proposed to be allocated for this purpose. Anyone who claims that we do not attach enough importance to this has no idea what he is talking about.

I would like again to emphatically underline the great progress that this year's budget procedure has enabled us to make. I can follow on seamlessly from where Mr Ferber left off. There are parliamentary gaps that we need to close in this area, gaps that have to do with the monitoring of policies that are being moved from the national to the European level, and we are finding out where they are. We have managed to achieve a joint declaration with the Council, which makes considerable progress precisely in the area of security and defence policy, making it clear to the public that the European Parliament has no room for manoeuvre on European policies at European level. These are matters that will have to be resolved in the Convention, that really need to be organised elsewhere. Even so, we have already tackled them.

Mrs Schreyer, you have already acted as if all of this were already in the bag. We will of course scrutinise the Copenhagen conclusions, but what is in any case clear is that this is not just an issue to be resolved in Copenhagen by the Council, but one that we should be discussing among ourselves in this House. Although our attitude is very positive, your dogmatic ‘and so it was decided’ is something I cannot leave unchallenged. That can only be said when discussions have gone well and been concluded.

I wish to thank all of my fellow Members of this House, especially the two rapporteurs and the President, who has been patient enough to allow me an extra thirty seconds.

(Applause)

  Virrankoski (ELDR). – (FI) Mr President, Commissioner, firstly, I should like to congratulate the rapporteurs for the budget, Göran Färm and Per Stenmarck, for their excellent work, as well as Terence Wynn, Chairman of the Committee on Budgets, for his leadership on that committee. I also want to thank Denmark’s chairmen in the Council for their cooperation, which was excellent, and Commissioner Michaele Schreyer for her excellent input.

Next year’s European Union budget is a disciplined budget. The increase in expenditure is below inflation, at just 1.9%. This represents an outstanding gesture of support by the European Parliament to help Member States balance their national budgets. It also demonstrates responsibility on the part of the EU, while Member States try to meet the requirements of its Stability and Growth Pact.

The Group of the European Liberal, Democrat and Reform Party supports this aim, although it partly undermines the EU’s long-term attempt to balance its economy, as the EU’s biggest budget worry this time is outstanding commitments. At present these stand at EUR 103 billion, which is to say, more than the entire budget for one year. There has been an increase in arrears of EUR 17 billion since the start of the year, with no limit to this in sight. The situation is at its most wretched in the area of structural operations, where outstanding commitments have grown over the year by EUR 13 billion. The most difficult situation, relatively speaking, however, is in the area of pre-accession aid, where EUR 8.5 billion in outstanding commitments has accrued in three years, with just under EUR 2 billion being paid out in actual aid.

What is most vexing is that there would have been funds available for payment in respect of these commitments, but they were not used. Consequently, the situation betrays administrative inefficiency, with the Commission and the Member States as the guilty parties. That is why Commission reform is extremely important. At the moment the Commission is very conservative and shirks its responsibilities. We should also simplify legal instruments and procedures, as was agreed in conciliation with the Council in the summer.

Enlargement is the hallmark of next year’s budget. This budget is the last to be drafted for an EU consisting of 15 Member States. Parliament safeguarded the posts needed in the Commission for enlargement by amassing resources partly out of this year’s budget. In this way we were able to meet next year’s expenditure in advance and fit administrative expenditure into the tight framework in place for heading 5. My group supports this.

Otherwise, we could say of the budget’s content that the EU’s functions are adequately financed. Agricultural expenditure is under control, so there is no need for significant reforms for budgetary reasons. External actions were able to be partly financed in advance out of this year’s budget, and there was no need to look again at Parliament’s priorities. In addition to other actions, we were able to improve the financing of the Northern Dimension a little, which has to be considered a good thing.

  Seppänen (GUE/NGL). – (FI) Mr President, the grand total for next year’s budget compared to Member States’ GNP is a record low. Our group is worried about the low level of payment appropriations. It is feared they do not correspond to the commitments made earlier and that there will be new RALs as a result, which is to say, unpaid appropriations will pile up. It is feared that, on account of a new rule, a ‘sunset clause’, Member States will lose the payments they are due. The problem has been mainly only theoretical while the Commission has not forwarded appropriations in the budget for payment and while Member States have been able to get back billions of euros of unused own resources, or contributions. If next year payment appropriations do not meet payment needs, the sunset clause will cause a new kind of problem.

Our group would like to focus on the interinstitutional agreement the previous Parliament made on our behalf. New needs have come into being, especially under headings 3 and 4, which cannot be covered by the current maximum amounts. Nobody could have predicted in May 1999 that there would be a need for reconstruction in Yugoslavia and Afghanistan in a situation in which the EU seems to have committed itself to the economic alleviation of the consequences of a US policy of aggression. The share of responsibility would seem to be one where the USA does the attacking and the EU pays for the clean-up operation and reconstruction in the aftermath of war. A new Iraq war might increase the pressure on next year’s foreign aid programme, so there are no margins under that heading for initiating new actions.

In the opinion of our group the ceilings in the interinstitutional agreement should be re-estimated. Let us please make this stupid Stability and Growth Pact more flexible. The budget has a special flexible instrument, but it would appear that the Council misuses it for payments that can be predicted instead. The failure of the Moroccan fishing agreement was not an unforeseeable piece of expenditure for which the flexible instrument was really needed. The breaking-up of the Spanish and Portuguese fishing fleets should have been totally financed next year in some way other than partially by means of the flexible instrument.

Our group thinks a positive step has been taken in commencing serious discussions about reducing the transportation of live animals for slaughter and calling into question the treatment of animals in the primate research centre at Rijswijk in Holland. We are, however, critical of the fact that the ball has been set rolling for the EU budget to be used to finance the common foreign and security policy. This time round we will be financing civil crisis management: next time it will perhaps be war. It has not become clear to me during the debate on the budget how it is intended to organise the auditing of funds that are the Council’s responsibility nor how nor to whom discharge is to be granted in respect of the use of these funds. Perhaps the Commissioner knows.

  Buitenweg (Verts/ALE). – (NL) Mr President, personally and on behalf of my group, I should like to thank both rapporteurs, Mr Färm and Mr Stenmarck, very much for their work and congratulate them on the final result. For the sake of balance, I should like to mention a number of positive and a number of negative points, but I shall begin with the negative ones. For me, these are the payments, and I fully support what Mr Virrankoski has said about them. Parliament usually fights the battle over final allocations, that is, over promises, while the Council is mainly interested in keeping payments as low as possible and hence rather less in keeping promises.

During the arbitration process, Parliament agreed to the reduction of the budgeted payments. I understand why but I am not happy about it. We run the risk of the waiting time becoming longer, of organisations and other recipients of what we might call ‘cash in hand’ having to wait longer for their money, which surely cannot be the intention. This diminishes the credibility of the institutions, but perhaps the Council or the Member States feel they cannot agonise too much about this.

Another problem I have relates to the reduction in loans for food and humanitarian aid by EUR 55 million. Of course I am aware that those in favour say that this is just a simple accounting device and that the total numbers remain the same. But that is exactly my problem, because loans are remaining the same, though we already know that extra funds will be required, namely for the Horn of Africa. The funds remain the same, but the number of people requiring money from the budget line is increasing.

Then, by way of adjusting the balance: three positive points: my group is very pleased about the freezing of the funds of KEDO. We have always found it regrettable that we have never opted for a lasting solution to the North-Korean energy question, namely investment in energy-efficient and renewable sources of energy. Thanks to the European Union, about a thousand North Koreans are being trained in modern nuclear technology. Now it emerges that North Korea is not keeping to its part of the agreements and is after all investing in its own nuclear weapons programme. That is why we must now once again re-examine KEDO carefully, and as we see it wind it up. We can easily find an alternative use for that twenty million.

Then there are the posts for the Commission: surely that must be seen as an important achievement in this set of budgetary negotiations. Through yet another odd accounting operation we have created scope in next year’s budget for five hundred new posts in the Commission. And that is good news. But if I have just heard the Commissioner correctly, none of those five hundred posts is going to DG Environment, and I find that regrettable because it is of course also very important that environmental regulations should also be complied with and monitored in the candidate states. Therefore they might wish to re-examine this, since we have after all agreed collectively that the European Union has three priorities, one of which is sustainable development. Hence, it would make very good sense if a substantial number of those five hundred posts were to go to strengthening DG Environment.

My final point, Mr President, concerns the animal experimentation centre at Rijswijk. I can already hear honourable Members sighing that this story has dragged on and on, but it is now on the point of resolution. We must apply clear, ethical preconditions to the experiments on monkeys that are carried out there. If there is an alternative available or the tests are not objectively necessary, the European Union should no longer subsidise these tests. In any case, an end should be put to tests on hominids. They are ethically unacceptable and I hope I can count on your support.

  Turchi (UEN). – (IT) Mr President, ladies and gentlemen, I would like to start, if I may, by congratulating this year’s two rapporteurs, Mr Färm and Mr Stenmarck, on their excellent work. The 2003 budget has not been a simple budget, nor has it been easy in political terms. Indeed, it is a budget in which there is tension between demands which absolutely have to be met now, such as the financing of the administrative expenditure to prepare for enlargement, and political priorities such as support for Afghanistan. There is tension between commitments which must be made good, such as the funding of the restructuring of the Portuguese and Spanish fleets – on which, at last, we appear to have reached agreement – and new urgent measures, such as the need to fund the European Union’s participation in the Global Health Fund. It is a budget which, in my view, suffers throughout from the failure to revise the Financial Perspective established in 1999 at Berlin: a Financial Perspective which I believe is now inadequate and can only become politically more unacceptable in the coming years. Nor can the – albeit significant – results achieved in conciliation in November lead to any lasting change in the situation. For example, the joint declaration whereby the Council undertakes to consult Parliament before taking any decision which might involve financial commitments in the field of common foreign and security policy is, over and above any possible objections, an important milestone, a further step towards the full involvement of the European Parliament in a strategic sector, towards the development of a more powerful, more secure Union.

That, however, does not change the fact that the Heading 4 ceiling is still too low, not to say stiflingly low. What will we do when the Council asks us to authorise it to make a financial commitment because of new international political developments? Will we refuse to give it the authorisation on the grounds that there are not enough funds or will we accept the challenge and undertake to find the money, somehow, somewhere? Now, for example, we have to find funds for the problems in Galicia. What would we have done, for example, in the case of Afghanistan? What would we have done in the case of the Balkans?

Not to mention Heading 3. Indeed, the European Union’s commitments increase every year in the field of internal policy too. With every passing year, there are new, costly multiannual programmes of huge political import which, as such, must be processed and adhered to. What, however, will we do when there is no longer a margin for any political initiative that Parliament might want to set in motion? What will we do when the distinction between compulsory expenditure and non-compulsory expenditure is reduced to a distinction between expenditure on which Parliament does not have the ultimate say and expenditure which Parliament cannot alter for fear that the European institutions will lose face? And that is just to mention two headings.

I therefore call upon all the Members to make representations to their delegations and to their governments to ensure that the situation is avoided where, subsequently, when all is said and done, everything we have planned for in this budget, in this conciliation, is frustrated because of lack of resources, and to ensure that it becomes the joint objective of each one of us, irrespective of our political affiliation.

  van Dam (EDD). – (NL) With thrift and hard work you can build a palace. This ancient Dutch proverb is only partly applicable to the European Union budget for 2003, which will be set this week. I have no criticism to make of the hard work. The well thought-out result of the joint efforts of the Commission, the Council and this Parliament is commendable. No, I am more concerned with the first-mentioned virtue: thrift. In the resolution before us, Parliament appeals to the Commission to continue to pursue actively the reduction of arrears in payments, the improvement of programming through quarterly implementation and reporting plans, etc. All well and good. Time and again, an important question is overlooked, however. Namely the question of the effectiveness of the many lines where there are payment problems. We are convinced that the Commission is biting off much more than it can chew, actively encouraged by Parliament. The resolution talks of 'excessive surpluses'. Surely that must give us pause for thought. We are therefore gratified that in this case a start has at any rate been made on the reduction of set allocations and payments relating to structural measures. The high level of arrears, particularly in the field of the structural funds, must lead to a thorough pruning of unprofitable budget lines. That would be a real contribution to a more credible European Union financial policy.

In other policy fields, too, a substantial pruning of budget lines would be welcome, however. Particularly in the field of external operations many lines could be scrapped. Only if the European Union has added value in the foreign policy field is an operation worth considering. What, for example, is one to make of Amendment No 139 to line B7-6000? It argues for an earmarking of no less than EUR 20 million for autonomous and independent foundations in the European Union. In the justification, there is the coy remark that political foundations are ideally qualified for the activities mentioned. But in that case what do concepts like independence and autonomy mean? Other examples abound.

We shall single out here only Amendment No 147 to line B7-6312. After a previous discussion on embryos in the research framework programme, I must again broach an ethical question. This time it relates to abortion in the context of a programme for the promotion of sexual and so-called reproductive health and rights in developing countries. Officially the European Commission says that abortion cannot be financed as a method of family planning.

In practice, however, we find that things are not so clear-cut, for the European Commission cooperates with, and contributes to, the funds of organisations that include abortion among reproductive rights. Not to put too fine a point on it: abortion is being co-financed. I therefore appeal to you to decisively reject Amendment No 147.

This matter shows yet again that the financing of ethically controversial activities leads to problems. The European Commission should exercise more restraint in such questions.

In addition, the way in which the EU’s development policy complements that of the Member States is put into a new perspective. Surely it cannot be acceptable for the European Union to supplement the development cooperation of the Member States with activities not supported by the Member States themselves because they do not consider them responsible. Complementarity in this form leaves a nasty taste in my mouth. I am interested to hear the arguments of the European Commission justifying its indirect involvement in abortion.

Mr President, let us be thrifty, following the trust placed in us by our citizens, and apply thrift as well as hard work. After all, the citizen foots the bill.

  Turco (NI). – (IT) Mr President, I too, like Mr van Dam, would like to focus on a specific budget line, not least because, as a member of the Committee on Citizens’ Freedoms and Rights, Justice and Home Affairs, I have been able to follow the matter closely. The line in question is line B7-6310: ‘North-South cooperation schemes in the campaign against drug abuse’. First the Committee on Citizens’ Freedoms and Rights, then the Committee on Budgets and, finally, the plenary, by a unanimous vote, decided to block the new appropriations and place the payment appropriations in the reserve because, in Parliament’s opinion, this budget line did not have a legal basis. It did not have a legal basis because the Commission should have presented to Parliament an evaluation of the measures financed by the Community under this line as far back as October 2000 and proposed a new regulation. Instead, for at least two financial years, this line has been financed with no legal basis.

Immediately after the vote in plenary, the Commission told the Chairman of the Committee on Budgets that, in effect, this line did not have a legal basis, which was the opposite of what the Commissioner had repeatedly stated in response to Parliamentary questions, to the effect that it was a line financed according to a quite precise legal basis and that the fact that the evaluation had not taken place did not mean that it could not continue to be financed. We were then told that there had actually been an evaluation. This evaluation, which ought to have concerned the Regulation of 21 October 1997 and would have been submitted to Parliament in July 2002, certainly never reached the Secretariat of the Committee on Citizens’ Freedoms and Rights. I succeeded, with some difficulty, in unearthing it. It is a final report of 9 May 2002, which, if we had had the time, the Committee on Citizens’ Freedoms and Rights could indeed have assessed, possibly avoiding this situation, avoiding what is happening now with the new budget, which has led the Commission, Parliament and the Council jointly to release the appropriations in reserve now that there does appear to be an evaluation. Apart from the cover and the title, this is an evaluation which focuses principally on the 1990s and concerns North-South cooperation in the fight against drugs and drug abuse, which is only partly related to the Regulation published on 21 October 1997. What is more, the evaluation concentrates on all the measures undertaken in the previous years while still failing to state clearly what happened with this Regulation during those three years.

The evaluation clearly reveals that, in the past three years, the majority of the measures have been undertaken together with and through the United Nations agency, under the direction of Mr Arlacchi. We have been calling for years for this Commission to investigate the actions which the United Nations itself had recognised as not transparent and, furthermore, as running counter to the financial regulation. President Prodi himself had taken upon himself the responsibility of ascertaining what the United Nations recognised. None of this happened, and now we are blithely refinancing this budget line when we have financed it every year for years, without a legal basis, for dubious operations of which, even now, the Commission is unable or unwilling to provide a proper evaluation.

  Elles (PPE-DE). – Mr President, like other speakers this afternoon, I welcome the successful conclusion of this budget process. It is certainly one of the most peaceful that I have known and my congratulations on the excellent work done by our two rapporteurs.

There are in any budget process successes and failures. We in our political group, as Mr Ferber has indicated, feel we have had more successes than failures in this budget process. Three issues stand out, and I would like to mention them. The first refers to the improvement of the quality of budget execution. We insisted from the beginning that we should pick up on the Commission, Council and Parliament declaration of December 2000, specifically looking to reduce outstanding commitments to a normal level by December 2003. To that effect, we suggested the appropriations for staff should be put in the reserve. As a result, we are now promised a document for the PDB 2004 setting out how we are going to eliminate abnormal outstanding commitments by the end of 2003. I think that we have some way to go, but this is a step in the right direction.

Secondly, so far as appropriate involvement of Parliament in CFSP measures is concerned, what concerned us most was to how to get Parliament fully involved in consultation and information on how the monies will be spent by the Council. For that purpose, we withheld money in the reserve at first reading, so that we could have a proper negotiation with the Council on second reading. And now we have a joint declaration in accordance with the Interinstitutional Agreement, setting up for the first time a way in which Parliament will be fully involved in consultation and information, including in political dialogue on the CFSP.

We also have put funds into the budget so that the Commission can come forward with a study establishing CFSP priorities over the next five years. I very much hope that this study will be completed.

Last and not least is the question of successful implementation of the Commission reforms. For my group, this is an essential point. We therefore suggested that we should have some overall view of this and, for that purpose, on first reading, we put 500 staff into the reserve – the additional posts requested. Lo and behold, as a result of this, we now have a comprehensive report which I was just discussing with my colleagues – including Commissioner Kinnock this morning – observing that progress has indeed been made. But we would like it more widely known that progress has been made, but there are other methods under discussion in the Council at the moment and decisions to be taken before we face the electorate again in June 2004.

Therefore, I think that on these three items, the 2003 budget has been a success. We had a strategy and we had some muscle enabling us to achieve that, by withholding monies or posts so that action could be taken. We must be vigilant over the next few months and ensure that progress continues to be made on these three items because none of them has been fully resolved in this 2003 budget.

But it is thanks to Parliament's powers and the determination of our political group to use them that we have made progress on those three items so far. I end with a word of warning: current proposals in the European Convention seem to be aiming to restrict Parliament's power in the budgetary procedure – we should make sure that this does not happen.

(Applause)

IN THE CHAIR: MR PROVAN
Vice-President

  Wynn, Terence (PSE), chairman of the Committee on Budgets. – Mr President, since we are congratulating ourselves – everyone has made very complimentary speeches about the role of the Committee on Budgets – I am reminded of a story once told to me by Vice-President Schmid. A former chairman of the Committee on Budgets and a former general rapporteur went on a skiing holiday. Whilst they were out skiing they had an accident: they fell down a deep ravine. They were stuck and could not get out. Twenty-four hours later, people realised they were missing and they sent out a search party. When the search party reached the ravine, it looked down and saw these two figures. They shouted down: ‘Are you from the Budgets Committee?’ They replied: ‘Yes, we are!’ They shouted back: ‘We are from the Red Cross.’ The reply came: ‘We have no money’.

(Laughter)

That is the image that most people have of the Committee on Budgets. However, with this budget we have been extremely kind to virtually everybody who has come along. Anyone who has been involved in this procedure knows about the faxes, e-mails, telephone calls and the knocks on the door as attempts are made to lobby for anything that can be gained from this budget.

However, on this occasion the rapporteurs have worked extremely well to ensure that the priorities of the committees, the different political groups and those with outside interests who have lobbied effectively are taken on board. We have a budget which reflects considerable good will on the part of this Parliament. In fact, there is so much good will that, as I said in committee, we have too much money in the budget, especially in some areas in category 4 where the money will not be spent. However, it is there, and it has been achieved through the good work of the rapporteurs and the committee and through our joint efforts with the Council and the Commission.

It must be said that there have been a good deal of firsts in this budgetary process, not least because of the attitude of the Danish Presidency. We have all congratulated them, and they have worked exceptionally hard to ensure that we finally have a budget of which we can all be proud. There is normally considerable lobbying at this final stage, but not on this occasion. The very few instances of lobbying we have encountered concern one or two lines relating to category 4.

Our negotiations in the conciliation with the Council and the Commission have actually proved fruitful. In category 4, every single amendment requested by the committees has been delivered, except on those lines concerned with ECHO – we are convinced that the money can be found – and the Global Health Fund. We do not have the EUR 80 million that was requested, but we have EUR 42 million from the general budget and a guarantee that the European Union will have a seat on the board of the Global Health Fund. From that point of view, it is quite good.

However, the one message that needs to be conveyed, amidst all these congratulations, is how the money will be utilised throughout next year, because our weakness in this Parliament is that we do not monitor how the money is being spent. Mr Ferber urged the Commission and the Council to ensure that the money is well spent. It is our job as well, and the committees in this Parliament have to ensure that they are monitoring month in and month out. The last thing we want is a 15% return to the Member States at the end of the day, which is what happened this year when we gave back EUR 15 billion. The Member States are happy about that, but it is not good budgetary practice.

(Applause)

  Jensen (ELDR). – (DA) Mr President, I too want to join in the delight that has been expressed today in many quarters concerning the constructive way in which the budgetary negotiations have proceeded. To outsiders, the effusive way in which we are praising each other may appear odd, but the mutual trust, openness and integrity that has characterised the budgetary negotiations this year inspires confidence that shortening and simplifying the budgetary process along the lines being worked on in the Convention is something that can be done easily and that we can continue the work on ensuring that the budget appears as a political document with clear political priorities. This process will in any case be clearer by next year when we change over to activity-based budgeting and so hopefully remove something of the mystique surrounding the language used in the budget. It will be easier for all of us to see the economic and political priorities in the budget.

Good results were achieved in this year’s budget, and I want firstly to point out that, for 2003, we found the money to prepare for enlargement to include ten countries in 2004. Without exceeding the agreed financial framework, EU legislation must be translated into the languages of the new Member States, and staff from the new countries must be appointed. I think that Parliament has made its contribution to that process. Secondly, we found the money for rebuilding Afghanistan and, thirdly, we were given clear pledges by the Council of better cooperation and scrutiny when it came to the funding of the common foreign and security policy. It is important, indeed it is in everyone’s interest, that there should be no recesses of the budget outside parliamentary control.

  Miranda (GUE/NGL). – (PT) Mr President, as I have already had occasion to point out, the exercises in financial engineering that the current budgetary process has required have once again demonstrated the precariousness of the Community financial framework and, consequently, the need for it to be revised and adapted.

It is well known that the financial framework decided on in Berlin is clearly inadequate for dealing with the costs of enlargement, the increased requirements of economic and social cohesion and, at the same time, for responding to the new priorities arising in the meantime, particularly for internal and external policies. Revising the financial perspectives would therefore be the most appropriate course of action. Or, in the absence of such a revision, the legitimate and full use of all the budgetary prerogatives granted to the European Parliament under the Treaties could have constituted a lesser evil, thereby avoiding the games involving redistribution and cuts to which we have become accustomed, often at the expense of previously set priorities and objectives.

I am thinking, in particular, about one area that has suffered more than most: cooperation and development policy. In fact, under the current framework and in light of the new priorities that have arisen in the meantime – Kosovo, Afghanistan, as well as Palestine and the pre-accession funds for Turkey or even the Global Health Fund – compressing appropriations intended for the poorest countries has become an inevitability. This compression of funds is now being extended to food aid, to cooperation with Latin America, the Balkans and to the MEDA Programme. Nevertheless, as a result of all the advances, transfers, reserves and non-execution, not even the budgetary decisions adopted have been implemented. This is the case now of the EUR 55 million intended specifically for Afghanistan. We are also seeing an attempt to include the funding of the Global Health Fund within the European Development Fund without even consulting the target countries of the EDF and to their detriment. All of this is happening because the principle of sufficiency of means, according to which new priorities should be given new financial means, is not being observed. A revision of the upper ceiling for the financial perspectives was clearly needed under category 4, which concerns external policies.

The issue becomes even more clear and urgent, however, if we consider the fact that the volume of payment expenditure being proposed for adoption represents an increase in 2003 of only 1.9%, in other words, lower than the expected level of inflation, which will lead to a real reduction in the payments budget. As a matter of fact, this budget for 2003 will become, in relative terms, and in terms of the criteria of the Stability Pact, the lowest in the last decade, representing only 1.02% or less of Community GDP. It makes no sense to seek to achieve more and more Europe and at the same time, wish to adopt an increasingly low budget.

Having said this, I should like to add a positive note, with regard to East Timor. I welcome the results that have been achieved, both by maintaining a specific budget line, something for which I have always fought, and by increasing this line by EUR 6 million more than the Council proposal. This sends a positive political sign to a country and a population that gained independence only recently and which are still experiencing considerable difficulties and this brings together, as a matter of fact, the various decisions that we have adopted on this matter.

I wish lastly, to say a couple of words about Palestine: given the tragic situation currently facing that country, we must respond to the situation next year by establishing a line and sufficient appropriations, specifically to recuperate the investments that the European Union has made there.

  Graefe zu Baringdorf (Verts/ALE). – (DE) Mr President, Commissioner, we are not satisfied with the budget as it concerns agriculture. Our proposals were not taken on board, although the Council made us a few small concessions, but our essential demand for a new institutional agreement in order to be able to transfer surplus funds from the first pillar to the second, has not been met, the belief being that things simply cannot be done that way. We now note with astonishment that the exact opposite happened in Copenhagen, in that funds were, with a stroke of the pen, transferred from rural development in the second pillar in order to make room for funds to be disbursed as direct payments. I have to say that I find this scandalous. We in Parliament drafted a resolution expressing our opposition to direct payments and to their being transferred to the new Member States of the EU, and also stating that we take it as read that payments as a whole will not be affected, but that this is being done by way of support for rural development, that is, in the second pillar. That has not been complied with.

The Brussels conclusions imposed a financial cap that does not exhaust the possibilities offered by Berlin. No cap was imposed on the financing of the second development, and we had hoped that this would mean that reform could include Parliament within the second pillar, enabling it to participate in these areas and enabling progress to be made with the second pillar. But if a Council decision takes the funds, agreement to which had been reached in this House by a great deal of effort, and transfers them back to a development that we do not want, that, Commissioner, is not in accordance with Parliament's intentions.

I therefore take the view that this cannot be approved in this way, that we will have to deal with it in the negotiations on the next Budget, and that we very definitely expect the European Convention to make codecision applicable in matters of agricultural policy both as regards its substance and also what are termed the mandatory funds. Rather than, in the long term, putting up with the Council shifting things hither and thither as it pleases, we want to be able to vote on the budget and decide these matters for ourselves.

  Ó Neachtain (UEN). – Mr President, I would like to congratulate the rapporteurs for their work on the EU budget for 2003 which now stands at almost EUR 100 billion. Nearly EUR 44.8 billion is due to be allocated to the common agricultural policy next year and I very much welcome the support that the European Union is giving to agriculture in general. It is recognition by all the key EU institutions of the political importance of assisting farmers, their families and the rural communities in which they live.

We must continue to invest in ensuring that we have an economically viable European agricultural system. That is why I am particularly satisfied that in the context of broader EU budgetary policies, the EU leaders are making provision to safeguard the viability of the common agricultural policy now and into the future. I am also encouraged by the spin on regional funds in Europe which will amount to EUR 33.98 billion and I am particularly pleased that this is going to be spent in areas like my own region, Connacht/Ulster in Ireland. These funds will alleviate the obvious infrastructural deficit that occurs in regions like mine and indeed in other regions that are lagging behind in Europe.

  Garriga Polledo (PPE-DE). – (ES) Mr President, representatives of the Council, Commissioner, ladies and gentlemen, Mr Wynn’s joke would have been much better if instead of members of the Committee on Budgets we had been Finance Ministers. Apart from that, you have made us all laugh just the same.

We are pleased today because the Färm and Stenmarck reports have brought consensus to this House. They have also brought consensus to our relations with the Council and have responded as far as possible to the Commission’s fair demands. In summary, we believe that the Nordic dimension has been very beneficial to the interests of the European Union and therefore today we are debating the draft budget for 2003 in a situation which those of us with long budgetary experience could describe as exceptionally calm.

The almost EUR 100 000 million we are going to approve is of little quantitative significance in terms of the Union’s economy, but its relative importance is very great because, let us not forget, what both politicians and citizens understand by Europe is there, in those scant EUR 100 000 million.

The final consensus, however, for which we have so much to thank the Danish Presidency, which was so willing to hold discussions, does not hide the fact that there are still thorns in the sides of Parliament. I will comment on a couple of them: firstly – and other speakers have said this – the real budgetary power of this House is diminishing all the time. When we are not talking about obligatory expenditure, we are talking about multi-annual programmes or privileged expenditure or amending budgets. The percentage of the Community budget not subject to the direct control and decisions of this Parliament increases every year.

Within the proposals my group is making to the Convention, those dealing with changing this situation stand out. A representative Parliament must decide on all expenditure. Codecision must be generalised, without thereby jeopardising agricultural and structural spending which must be guaranteed.

Above all, I believe it is a political mistake to translate the way in which budgetary austerity is carried out in the Member States to the Union’s budget, and there are two reasons for this: firstly, because budgetary restrictions are being applied to a Community budget which by its very nature does not have the capacity for indebtedness. It is understandable that a national government which wants to, or which must, comply with the Stability Pact has to act on its public deficit and, if possible, achieve zero deficit, but to apply these annual rates of budgetary growth of less than 2% per annum to the Union’s budget leads to an increasing insufficiency in Community resources. It is expected that the Union will do increasing numbers of things with fewer resources. And not only is this miracle not eternal, but furthermore it is not sustainable.

Secondly, how would the Council explain these increasing budget balances being returned to the Member States with a rate of use of own resources now practically of 1% rather than the theoretical 1.27%? The answer remains in the air. There are Member States which use, as a variable for their national budgetary adjustments, structural funds which they do not commit and do not implement.

I ask myself whether this is the right way to administrate the European Union, whether this Parliament should agree with this way of acting. Let us hope that the Convention helps us to resolve this problem which we are all facing.

  Gill (PSE). – Mr President, I too would like to congratulate both rapporteurs, who have attained good results. I would particularly like to thank Mr Stenmarck for his cooperation in working with me on the other institutions' budgets and, crucially, the implementation of the front-loading exercise. This means that those budgets which at the outset were EUR 66 million over the ceiling, are now within an acceptable margin. This should help us in the 2004 budget as well.

The start of 2003 was a difficult budgetary year. Not only did we have major preparations in the institutions for the forthcoming enlargement, but the strains of working within a rigid framework agreed in Berlin were all too apparent, especially in category 4. I agree with what Mr Färm said earlier about the straightjacket system within which we have to work. It has been a real juggling act for both rapporteurs, especially on our main budget.

I have observed over the last three years a year-on-year crisis situation. Whilst the EU's obligations and global needs are growing, the finances are not. One of the fundamental problems for Parliament is the lack of influence on the whole of the EU's budget, particularly category 1. While we, as parliamentarians, are committed to budgetary rigour, our inability to influence 50% of the EU budget is frustrating because we cannot fully translate political priorities into budgetary ones. Therefore, I would like to congratulate both Mr Stenmarck and Mr Färm, particularly Mr Färm, for achieving what he has done in delivering on most of Parliament's priorities.

The reality of enlargement is upon us. However, until we have the outcome of the Convention and the full extent of the new role of the institution is established, it will be difficult to put direct plans into place. Although we have begun preparations in this budget and some minor adaptations have already taken place in this House, the reality of enlargement has not fully sunk in within the institutions. We have not properly begun to address the full implications of enlargement. Let us just look at the three places of work.

Concerning Strasbourg, there are likely to be something like 100 new MEPs plus their assistants as well as their Council counterparts and additional Commission staff from the new members of the European Union. In practical terms, that means that there are likely to be 2 000 to 3 000 more people around once a month in this city. Even now the hotels are struggling to cope. I know we are known as a travelling circus but, come May 2004, we may literally have to camp out in our tents because there will not be enough hotel rooms as a result of the enlarged Parliament.

Combined with this the transport links – especially the air links – are far from satisfactory for current Members. Therefore it is absolutely essential that the Convention grasps the nettle and looks seriously at the three places of work. How can these be reduced? It is important that the Council and the Convention recognise that they have to take this political decision.

(The President cut off the speaker)

  Mulder (ELDR). – (NL) Mr President, it has already been said by many people in many different keys, this year’s budget procedure was exemplary. There was very efficient cooperation between all the components of the budgetary authority. My compliments also to the two rapporteurs and the chairman of the budgetary committee, who proved a safe pair of hands.

We had, I think, the greatest difficulty in Headings 4 and 5. I believe that a good solution has been found for both categories. We were able to find a good solution for help to Afghanistan and the World Health Fund and, for Category 5, good use was also made of the frontloading tool.

This morning we talked in this House about the foot and mouth crisis of 2001. The resolution adopted this morning again urged the undertaking of research in various fields. As regards last year’s budget, the Commission had had every opportunity. Because even before the committee was called into being, Parliament had already voted in favour of initiating research. I also said in the first reading in October that the Commission should carry out research in two areas, marker vaccines and insurance systems. As far as I am aware, the decision of the budgetary authority has up to now been set aside and the Commission has still not begun signing contracts. I should like to underline yet again how deeply I regret this.

Last week we had Copenhagen. Of course there was a huge amount of talk about money. One thing: we already have programmes in place for Eastern Europe which should be being implemented at this very moment, but implementation is extremely slow. I see this as the great danger for the coming years, that we do our utmost to implement as many programmes as possible in Eastern Europe, but are simply unable to. I believe that the Commission must pay particular attention to that.

Finally I should like to express the hope that with the new system of Activity Based Budgeting planned for next year the budgetary process will proceed as smoothly as it did this year.

  Dover (PPE-DE). – Mr President, it gives me great pleasure to say that the budget for 2003 has gone wonderfully well. It was a privilege to be in on the mid-term and end-of-year conciliation meetings where there was constructive and sensible debate and deals were done. I would like to praise Commissioner Kinnock for his reforms at the Commission, although there has been one blind spot. I am delighted to see Mrs Schreyer here today, who hopefully is going to talk about accounting control.

During the passage of this budget we in the Conservatives and the European People's Party tried to indicate that we needed better and tighter accounting control. If we did not get that, we would not release certain amounts of money and allow certain staffing levels. This is absolutely vital. It is a great pity that the Committee on Budgets takes one forward look at the budget, but then encounters budgetary control implications, and there is a bit of a gap between the two. There needs to be a seamless thread, and I am delighted that Mrs Schreyer is here to address that issue today.

Looking ahead, it is vital that we have the common agricultural policy reform carried out to programme and not delayed, because this is so vital to enlargement and the sensible payment of reasonable subsidies – I say reasonable and stress that word – to the accession countries. I praise the fact that we get good value from the European Union budget. We have brought down the percentage of gross domestic product spent on the budget successfully, so that it is now just over 1% at 1.02%. I praise everyone involved, particularly the rapporteurs, on a very successful budget outcome.

  Dührkop Dührkop (PSE). – (ES) Mr President, I will restrict my brief comments to fisheries. I would like to point out that the second reading, in which we are going to approve the international fisheries agreements which have not caused any great problems, is a mere formality. Nevertheless, the main battle we have fought has been to fulfil the commitment acquired last year to alleviate the effects on the Community fishing fleet which fished in Moroccan waters, in view of the failure to reach an agreement with that country to renew the fishing agreement.

It is well known that the Council, despite having acquired this commitment in its draft budget for 2003, removed the EUR 27 million laid down by the Commission in the preliminary draft budget. Nevertheless, the European Parliament – above all by means of its Socialist rapporteur on the financial perspectives, Mr Colom i Naval – with the support of the Parliamentary Group of the European Socialist Party, managed to find a solution on this issue, finally adopting EUR 15 million in transfers at the close of 2002 and EUR 12 million by means of the mobilisation of the flexibility instrument for 2003.

Of course, my group is going to support this agreement at second reading. It will vote in favour of this agreement which it fought for and promoted and I hope that the role of the Socialist MEPs is made sufficiently clear, both during the negotiations and in its conclusion. The reason I am insisting on this issue is to prevent, Mr President, any repetition of the unfounded accusations of continuous boycott made by the President of the Spanish Government, Mr Aznar, against the Parliamentary Group of the European Socialist Party, in the most unscrupulous manner, in an attempt, as always, to confuse the public.

  Naranjo Escobar (PPE-DE). – (ES) Mr President, Commissioner, ladies and gentlemen, in 2003 the current period of the financial perspectives will reach its half-way point. This is the first budgetary procedure which deals successfully with the consequences of enlargement in terms of administrative spending. In my view, this is a good departure point for dealing with future difficulties.

It is fair to point out that the efforts to reach an agreement in the July conciliation were successful and will allow us to vote in favour of the 2003 budget tomorrow. It goes without saying, therefore, that I warmly congratulate the rapporteurs, Mr Färm and Mr Stenmarck, and the chairman of our Committee on Budgets.

The series of commitments achieved during the conciliation, and enshrined in the declarations, demonstrates a clear advance for Parliament in decision-making with budgetary consequences and an advance in terms of ensuring better control of budgetary implementation and outstanding commitments.

There has been mention here of an issue which is of great importance to my country: resolving the second stage of the funding of the Spanish and Portuguese fishing fleets in view of their inability to fish in Moroccan waters. I would like to say sincerely to my colleague Mrs Dührkop Dührkop that we share her objectives, but not the methods or comments we have just heard here.

I believe that this is a good example of interinstitutional cooperation. Both the Commission and Parliament and the Council have reached an agreement and I believe that at this time when regions such as Galicia are suffering the consequences of an extraordinary disaster, the fact that our institutions are showing their sensitivity and solidarity is a positive thing which we can communicate to the citizens.

I must also say that once again the revenue for the next financial year will allocate a significant amount through the surpluses of the previous year. This situation, which reveals a chronic under-use of payments in certain areas, must come to an end.

I would like to say to the Council that it cannot ignore or diminish the political priorities of Parliament and that the loss of appropriations must not be repeated, as is going to happen with the Community funding for Europol for certain actions in the fight against terrorism, simply because the Council does not want to be subject to the control of this House.

  Pittella (PSE). – (IT) Mr President, Commissioner, ladies and gentlemen, I too would like to thank the general rapporteurs, Mr Färm and Mr Stenmarck, for their astute handling of the matter and achievement of a compromise which has allowed us to reach our goal with a result which Parliament finds satisfactory, on the whole. As many of you are aware, I have expressed some concern at a number of decisions, particularly the cut in payment appropriations for category 2 of the Structural Funds. However, although I do not view the compromise reached with enthusiasm, I do understand how it has come about, given the enormous pressure from the Member States to reduce the amount of payments which, I regret to say, are increasing at a slower rate than inflation.

I do not want to focus on the content of the budget but to talk about something else. This is a transitional budget: as Mr Walter said, it shows us the tough reality of figures which are, once again, a reflection of the miserly rigidity of the States. One would have to be blind not to see that we have entered a new phase in European history. Copenhagen is a historic milestone. Those who have believed in enlargement have had to have genuine visionary powers, the visionary powers of Spinelli, Monnet and Schumann before us. Is it really impossible to be visionaries once again when it comes to the budget too? We cannot build a European power with miserly States. Will there come a day when the Financial Perspective will be established on the basis of a burst of generosity, from the Netherlands for example, with the Solidarity Fund entirely financed by Luxembourg for instance, with the Committee on Budgetary Control urging us to spend more rather than less, with the Member States calculating not what comes in and what goes out of their pockets but what Europe genuinely needs to meet the needs of its citizens?

  Jeggle (PPE-DE). – (DE) Mr President, Commissioner, ladies and gentlemen, alongside enlargement and foreign policy, agriculture and structural policy are the essential priorities for the budget. That is only right and proper, as the European Budget was originally agricultural in character. That has to be borne in mind when considering large areas of the Council's policy.

There is something dubious about constantly burdening the European Budget with new Community tasks without stating where the money for these tasks is to come from. As I understand these things, it certainly is not going to be from the agriculture budget! I do not see that it has to be our function to keep national budgets sound by dividing up the work in this way.

To that extent, it follows that the amendments taken up by the Council from Parliament's first reading are double-edged. On the one hand, I am glad that the Council has withdrawn 25% of the across-the-board cuts in the lines under heading 1A. On the other, this means, when compared with the draft budget, that we are giving out EUR 200 million, even though the estimated upper limit has a margin of EUR 2.6 billion. This money is not being used where it is needed – as aid that actually generates income. Money has been taken away even from the strengthening of the second pillar that has been called for on all sides. I am on record as favouring the support and development of rural areas, if it gives the people there a long-term home and the money is not wasted on local status symbols or allowed to drain away into national projects with ideological trimmings.

As regards the Commission's letter of amendment, I welcome the fact that the Commission has adopted some of Parliament's proposals from the first reading and, in particular that it is not making further cuts to export refunds.

It is important for me to again emphasise, in conclusion, that the agriculture budget faces attack on two fronts. On one, the Council is attempting to use the agriculture sector to finance ever more new expenditure, and on the other, redeployment of funds to a second pillar yet to be defined means that farmers are losing out on payments from the first pillar that generate income. Both of these things I regard as unfair and would like to take this opportunity to make this abundantly clear.

  Pronk (PPE-DE). – (NL) I believe, as has been so often repeated, that we can indeed be truly satisfied with this budget. Nevertheless now that I have heard everyone in this long debate, I wonder if what we are experiencing today is not the quiet before the storm. This time it has all gone well, we all got through it satisfactorily, but we have put things off till the future. How will things go next year? How can this budget continue in the long term to fulfil the function it fulfils at present if it is talked about in such overblown terms? If one listens to the individual Finance Ministers, it seems as if the major part of their problems resides in this European budget. I explain to people in the Netherlands that out of every hundred euros that they earn, they pay forty-three euros in tax and that only one euro of that goes to the European Union. Yet everyone wonders why so much is spent, although from a national perspective relatively little money is involved. I fear that one of the reasons is that it is a nice red herring, because one then does not need to talk about the billions that are spent at national level. People are reluctant to look closely at these. But they are always prepared to talk about what is after all a relatively insignificant sum, especially because it is supposedly going abroad and that is always easier to talk about. So I think that we must bear this in mind.

If for example you look at defence expenditure, which is of course entirely national, you find that we spend approximately half what the Americans spend, but that we achieve only ten per cent of the return. So you can easily see that a collective approach to such a policy can solve many more problems than doing it all separately. I believe that recently such noises are heard too infrequently. Everyone is surely too preoccupied with the relatively small amount. That is hanging over our heads and that is, I believe the quiet we are still experiencing, which may become a storm once we are confronted with all the consequences of the expansion. We can survive it, we have laid the right foundations, but we must be certain that we can see it through.

  Laschet (PPE-DE). – (DE) Mr President, ladies and gentlemen, even though the foreign policy of nation states is, by tradition, a matter for the executive, money for certain foreign-policy activities has to be authorised by their parliaments. The right of control over the budget is the traditional means whereby a national parliament exercises parliamentary control over foreign policy, and so we are very glad that this budget enables us to take a further step on the road towards parliamentary control of the common foreign and security policy. An agreement is in place with the Council, which has given an assurance that, prior to future decisions – in particular on joint actions – Parliament, the Committee on Foreign Affairs and the Committee on Budgets will be notified at a point in time at which they can still exert some influence on the measure as a whole. We now appeal to the Convention to enshrine this accordingly in the nascent European constitution and to beef it up. Nobody wants to put a question mark against the Member States' right to reach autonomous decisions on foreign policy matters, but if Parliament is expected to make funds available, then it has to be given advance notice.

We have seen many examples over the past few years of foreign policy undertakings being given and our budget procedure having to be used to find the money for them by cuts being made somewhere in the budget. As our colleague Mr Bourlanges once put it: ‘The reconstruction of the former Yugoslavia, and of the Balkans, was paid for by Africa, as that is where we had to make cuts to make it possible.’ This agreement with the Council is an important step towards this no longer being the case in future, and towards foreign policy competence bearing some relation to the budget procedure, and we encourage the Convention to take this into account in the work it is doing.

  Rübig (PPE-DE). – (DE) Mr President, ladies and gentlemen, as rapporteur for the Committee on Industry, External Trade, Research and Energy, I see a need for discussion of four areas that are of great importance to us. The first is external trade. The next round of WTO talks is imminent. I believe that the trend towards moving from the promotion of products to the promotion of quality is one that is especially important and will be of very great significance for Europe.

Secondly, the WTO is in urgent need of a parliamentary assembly to accompany it. We can observe how pressure on the part of NGOs is constantly increasing, and how a political debate on globalisation issues is becoming ever more important. Thirdly, we in this House must ourselves step up our efforts in order to meet the challenges involved in preparing the WTO to face the future. At the end of the day, this issue will decisively affect some 20% of jobs in the European Union.

On the subject of industry, I want to record the fact that support for border regions has been very successful, especially that given to small and medium-sized enterprises. The B5-510 budget line would also be very well suited to increasing the budget for the ‘Arge 28’ working community of chambers of commerce. I think it very sensible that discussions have touched on this. A further factor is that consideration is given, in the fourth multiannual programme, to the various modes of financing Basle II. I believe these programmes to be of great importance for the future. In particular, we want to start up a preparatory operation for next year, in order to give particular help in this area to small and medium-sized enterprises in meeting the requirements of Basle II. Turning to research and development, the earmarking for SMEs is especially laudable, and I believe that the EUR 3 billion to be spent in the coming year can also give an impetus to improved economic development.

My fourth and final point has to do with intelligent energy. Here too, I believe, we have taken a step in the right direction as regards the supply, safety and efficiency of energy, with especial consideration for small and medium-sized enterprises.

  Schreyer, Commission. – (DE) Mr President, ladies and gentlemen, I want just to deal briefly with a number of the questions that have been raised, starting, of course, with the management of the budget. I would like to mention here that we have again come to a very good arrangement in this budget procedure on the very issue of pilot projects and preparatory measures, namely that a vote can be held beforehand on approaches to implementation, so that what the budgetary authority has decided in the budget procedure is also speedily implemented by the Commission.

Mrs Buitenweg asked about the complement of posts for the environmental area, with reference to, among other things, the tasks that enlargement makes necessary, as environmental legislation must – quite rightly – also be implemented from day one, unless transitional arrangements are in place, but transitional arrangements, too, have to be observed. After you have finished voting on the 2003 Budget on Thursday, the enlargement DG will be given an additional 18 posts for preparation for enlargement, and more when the budget is implemented, with the result that, in the course of 2003, the environment DG will have 33 additional posts at its disposal.

I would like to pick up on what Mr Walter said in his intervention with reference to the adjustment of the Financial Perspective in the course of enlargement. I really can unreservedly assure you, Mr Walter, that the Commission has been quite specific in emphasising that the adjustment of the Financial Perspective is not something that has been, so to speak, decided in advance; rather, it is to be decided jointly by Parliament and the Council on the basis of the Commission's proposal. I take the same view as you here: the maximum amounts were decided on in Copenhagen, but decisions on what we might call precise adjustments will have to be a joint effort. I would be very glad if we could succeed in laying down the timetable in the way the Greek Presidency is contemplating, so that we can indeed have the essential discussions on these matters as part of the first trialogue.

Mr Graefe zu Baringdorf, who is no longer in the Chamber, raised the subject of Parliament's decisions on expenditure in the area of agricultural policy. The Commission entirely shares the view that, in future, this distinction between compulsory and non-compulsory expenditure should be removed and the consequent differences in Parliament's rights eliminated, so that the European Parliament becomes fully competent in budget matters. It is my belief that this particular budget procedure has again shown that the European Budget cannot but stand to gain by this.

(Applause)

  President. – The debate is closed.

The vote will be taken on Thursday, at 11.30 a.m.

(The sitting was suspended at 4.55 p.m. and resumed at 5 p.m.)