Verbatim report of proceedings

Tuesday, 16 December 2003 - Strasbourg

4. Draft 2004 budget as amended by the Council and Letters of Amendment 1,2,& 3/2004

  President. The next item is the debate on the report (A5-0473/2003) by Mr Mulder and Mrs Gill, on behalf of the Committee on Budgets, on the draft general budget of the European Union for the year 2004 as modified by the Council (all sections)

(11357/2003 C5-0600/2003 2003/2001(BUD) 2003/2002(BUD))

and Letters of Amendment Nos 1, 2 and 3/2004

(14837/2003 C5-0570/2003, 14838/2003 C5-0571/2003, 14839/2003 C5-0572/2003)

to the draft general budget of the European Union for the financial year 2004

Section I European Parliament

Section II – Council

Section III – Commission

Section IV Court of Justice

Section V Court of Auditors

Section VI Economic and Social Committee

Section VII Committee of the Regions

Section VIII(A) European Ombudsman

Section VII(B) European Data Protection Supervisor

  Mulder (ELDR), rapporteur. – (NL) Mr President, since the last time we discussed the budget in this House, significant progress has been made, particularly following the joint meeting between the Council, Commission and Parliament on 24 November. Finally, an agreement has been reached about the funding of Iraq’s reconstruction. From the 2004 budget, EUR 95 million will be taken from the flexibility reserve and EUR 65 million from Heading 4. The fact that it was Heading 4 means that cuts will need to be made in other lines and that the lines by which some groups set great store have lost some of their importance. However, I welcome the fact that there is an agreement.

We have also reached agreement about the increase in payment appropriations: 2.3% compared to the 2003 budget. This means that, irrespective of whether 15 or 25 Member States are involved, in 2004, we will in all probability spend 0.98% of the gross national income. I am not certain whether everyone knows this, but that is the lowest percentage since 1990, and as far as that is concerned, we fully comply with the objectives which we set ourselves at the beginning of this year in the directives for the 2004 budget, namely to draft an economical budget.

There is also agreement about common foreign and security policy. A Police Mission can be sent to the Former Yugoslavian Republic of Macedonia. We hope that with this agreement, the provision of information to the Parliament will also improve, for that is of extreme importance to us.

All praise goes to Mr Böge and Mr Colom i Naval for the agreement on the programmes under codecision, particularly the programmes following enlargement. That is, in my view, quite a feat because in future, it will considerably simplify decision-making and budgeting. The same compliment can be made to Mrs Dührkop Dührkop and to the rapporteurs of the various specialised committees for the agreement that has been reached on subsidies.

Finally, there is the result of the most recent conciliation meeting. Not only will we save about one billion on agricultural expenditure but the Council of Ministers has also adopted Parliament’s priorities in agriculture.

Enlargement was the single most important element in the 2004 Budget, and I am therefore delighted to be able to announce that Parliament has agreed to the majority of applications of new Commission posts. We will put 25 posts in reserve. We want the Commission to comply with certain other conditions, but I think that the Commission has received most of the posts it had requested.

An important initiative has also been taken in the area of small and medium-sized enterprises. In our opinion, the economy in the new countries and in the old Member States can ideally be boosted by increasing the opportunities for small and medium-size businesses. This is also something which we managed to secure via this budget: considerably more credit has been made available.

As to agencies, with the entry into force of the new Financial Regulation, Parliament should also gain a better insight into personnel policy of these agencies. This year is still a transitional year, but in the next few years, Parliament will be paying a great deal of attention to this.

As far as reserves are concerned, according to the result, at least of the votes in the Committee on Budgets, the reserves will be maintained for the NGOs, Eurostat and for Afghanistan.

At the beginning of this year, Parliament declared itself in favour of a budget for 25 Member States. What we will be voting on this week, is a budget of 15 Member States. The groundwork has been done, though, and has been done well, so that we, on the basis of the agreements of Copenhagen and on the basis of Parliament’s first reading, can submit a sound, amended budget, or approve one for the ten new Member States.

With regard to the 2005 Budget, with a reduction of the financial perspectives, the 2005 Budget will become considerably more difficult than that of 2004. I would therefore wish Mr Garriga Polledo and my successor every success.

Finally, as is known, we in this Parliament have an excellent secretariat for the Committee on Budgets, without whose efficiency, it is obvious, the work here in the Parliament would not have been completed. I should like to express my warm thanks for this. I should also like to thank all the group coordinators. In my view, cooperation was excellent and I am very grateful for this. Cooperation with the Italian Presidency has also been very successful, for which my thanks. Finally, I should like to say special thanks to two people: the first of whom is the chairman of the Committee on Budgets. I have valued him for years, but I have now also seen him in action close-by. I can only express my admiration for the way in which he has done things. My thanks for this. Finally, I am also indebted to my personal assistants, particularly Mr Marko van Workum.

(Applause)

  Gill (PSE), rapporteur. – Mr President, this budget for the other institutions sets the foundations for the imminent enlargement in stone. It will equip all the different components that make up the European Union to meet this historic challenge, at least in administrative terms. My aim has been to ensure that the EU hits the ground running when we have a Union of 25 next year, also to achieve a balance between the necessary increases in resources and at the same time ensure value for money for the European taxpayer.

Earlier this year I outlined my main priorities. I shall now encapsulate four of these priorities. Firstly, to prepare for the final stages of enlargement. I am pleased that we were able to fine-tune the original predictions from the secretaries-general for enlargement. However, it has to be recognised that the scale of some of the budgetary increases for individual institutions are up to 50% higher in some cases. This will fundamentally change how those organisations function a note of caution therefore. It is crucial that this change be managed with care and to ensure that effective change management strategies are in place to avoid chaos.

Secondly, to advocate greater reform. All the institutions have to modernise if they are to meet successfully the challenges of the future. Let us not underestimate the challenge of 25 countries working together. Last weekend's deliberations point to lessons that need to be learnt by the other institutions. Complacency will lead to gridlock.

Thirdly, to push for greater openness, transparency and accountability. Every single element of the EU has to be more user-friendly. We need to make greater use of new technology, rationalise more processes, focusing on the Internet as a tool of communication to achieve our objective to get closer to the citizens and to communicate more effectively with the people of Europe. We have sown the seeds for this, and of course we will need to build on this.

Fourthly, to alleviate the pressures on the ceiling of Heading 5. We have overcome this by frontloading buildings for the Court of Justice this year. I believe that Parliament's policy of frontloading for building expenditure has been vindicated as we now have huge pressure on Heading 5. This policy has contributed to reducing this pressure this year and next year. It therefore makes sense to replicate this policy for other institutions as well.

I am pleased to report that I have had considerable successes in meeting some of these objectives; but there have also been some frustrations along the way. Firstly, on the successes, we have made progress on all the issues I have just outlined. This budget achieves value for money. We can congratulate ourselves that we have achieved the juggling act of managing to finance enlargement without breaking the ceiling on Heading 5. This budget therefore fundamentally completes the process of enlargement budgeting and is a good result for the European taxpayer.

Moving on quickly to the frustrations, we could have expected greater economies of scale given the expansion proposed. However, my biggest regret is that we have not made significant inroads into introducing activity-based budgeting in the other institutions. This is a missed opportunity, given the immense pressure on Heading 5, as I have just said, in the remaining years of this financial perspective. In 2005 and 2006 it will be much harder to prioritise and to ensure that there is an effective financial decision-making framework.

The lessons I have learnt throughout this process are that we need better budgeting and improved planning processes. The regularity of the last-minute request for unforeseen expenditure is relentless. Last month we had to find an extra EUR 77 million for all the EU staff and a further EUR 24 million for the acquis for the Council. I am amazed and astonished that we can continue to receive requests of this scale at this late stage. The pace of reform has to speed up. We need to fast-track, to improve quality of spending and to focus more on our core areas and secure greater rationalisation of our processes.

Earlier this year I visited the Rikstag and the Bundestag and these visits were very illuminating for me. They demonstrated to me a degree of devolvement in decision-making and transparency in the decision-making chain and the budgetary planning process that is achievable. But we also need to grasp some thorny issues, as my first reading resolution stresses: all institutions need to review and reform the system of travel reimbursement. This is not only an issue for Parliament, but also for two committees and any other body that regularly reimburses expenses. It is imperative that this issue is addressed quickly so as to regain the trust and respect of our citizens.

There are a number of other areas I would like to touch upon but I see that I am running out of time so I would just like to thank all my colleagues for their cooperation and support and for making this report what it is. More particularly I would like to thank the Committee on Budgets' secretariat, especially Walter Masur, for their unstinting support and hard work to make this budget what it is. I would also like to congratulate my co-rapporteur, Mr Mulder, for what he achieved in his budget in finding solutions which are acceptable to all. Finally, my thanks to Mr Wynn as chairman, Mr Walter as coordinator, and our own group secretariat.

(Applause)

  Schreyer, Commission. (DE) Mr President, ladies and gentlemen, the 2004 budget has squared the circle. It is the first budget for a Union with 25 Member States. It is an historic budget. The profile of the 2004 budget is clearly geared towards enlargement. It is also clearly geared towards Europe’s growing role in international affairs. Establishing an area of freedom, security and justice is also given a higher profile in the budget. At the same time, payments have successfully been reduced to an historic low. Payments amount to EUR 99.7 billion, which represents 0.98% of Gross National Income (GNI) for the enlarged Union in the year 2004. This outcome – catering for the historic enlargement process, on the one hand, and restricting expenditure, on the other – this squaring of the circle, is, as we know, not a miracle but the outcome of rational calculations.

On Thursday, this House will vote first of all on the budget for the 15 State EU, with a total of EUR 99 billion in commitments and EUR 95 billion in payments. This represents a decrease of 2.8% on the current budget plan. At the same time, we have already reached political agreement on the supplementary and amending budget to be adopted in March 2004, which will formally establish the financial resources for the enlargement countries, that is, an extra EUR 11 billion in commitments and EUR 5 billion in payments. Overall, the budget for 2004 will increase by just EUR 2.3 billion, and is therefore EUR 11 billion below the maximum amount for payments originally planned for next year in the Financial Perspective in Agenda 2000.

Next year, the national composition of staff across all the European institutions will change when the appointment of officials from the new Member States begins on 1 May. For example, the number of posts in the Council will increase by 286, in the Parliament by 355, and in the Court of Auditors by 133.

On behalf of the Commission, I would like to thank the Budgetary Authority for also recognising the Commission’s staffing requirements. I am especially grateful to Parliament for its efforts to secure the additional resources for the 780 new posts at the Commission. I am grateful that you have kept the reserve low, since the integration of new staff, the recruitment processes and of course – in particular – the tasks to be mastered in the wake of enlargement will pose a challenge to all the European institutions.

In this budgetary procedure, we have also set the figures for all multiannual funding programmes – from funding research to programmes for the environment and trans-European networks – for the new Member States. For research funding – let me quote a few figures – a total of EUR 4.8 billion will be available next year, of which EUR 500 million will be earmarked for the new Member States. EUR 138 billion will be allotted to the closure of nuclear power plants in the enlargement countries and more than EUR 770 million in total will be available to fund trans-European networks. These measures are essential to ensure that the benefits of the large internal market can be utilised to the full.

The European Union is taking on ever more responsibility in the world. This is clearly reflected in the European budget. I greatly welcome the fact that everyone involved has been successful in safeguarding the Union’s capacity to fulfil its responsibilities in Iraq, in Afghanistan, and in our cooperation in the Balkans. For the measures in Iraq, it has been agreed that the flexibility instrument will be used to provide the sum of EUR 95 million. This means that, by the end of 2004, we will meet in full the EUR 200 million pledged for reconstruction in Iraq. In my view, conditions will also improve as a result of Saddam Hussein’s arrest, enabling us to devote all our energies to helping the people of Iraq.

EUR 83 million are earmarked in the budget for Afghanistan. I would ask the House to reconsider the reserve here as the Commission intends to propose a comprehensive programme to restore law and order and support the war on drugs in Afghanistan. Given that the Loya Jirga is convening in Afghanistan at this very moment, these are important signals that we can send out through the adoption of the budget.

In the Common Foreign and Security Policy budget for 2004, resources are earmarked to fund the continuation of the EU Police Mission in Bosnia and the new Joint Action in Macedonia. The funds for the programmes for the Mediterranean region have also been substantially increased.

How will the budget develop in the coming years? For 2005 and 2006, the scope will in fact be very limited. We have the decisions for the new Member States, the setting of the figures for the multiannual programmes, and the provisions of Agenda 2000. As envisaged here, the expenditure for the enlarged Union will increase in the next two years while remaining within the agreed framework, namely 1.06%. The Commission will present its communication in January for the period after 2007. This will start the debate about priorities and the financial framework. At this juncture, let me reiterate one point which is self-evident: anyone who takes decisions must expect to have to foot the bill for these decisions sooner or later. In my view, we must all work together on realistic proposals.

I would like to say a few words about the constitutional debate. It is disappointing that the new constitution could not be agreed before enlargement. Let me also say, however, that there was an attempt in some quarters to restrict this House’s budgetary rights. The Commission firmly rejected this attempt. My experience over the last four years has taught me one very important lesson: anyone who claims that the European Parliament does not exercise its budgetary rights responsibly is utterly wrong. Every budget that we have adopted, and especially this 2004 budget, shows that the opposite is true.

The budget is an excellent example of outstanding interinstitutional cooperation. I would like to mention the very positive cooperation with the Italian Presidency and the President-in-Office, Mr Magri, in this context. I have great respect for the general rapporteur, Mr Mulder. Quite simply, you have an outstanding grasp of the material and have been resolute in preparing the 2004 budget. Mrs Gill, thank you for your diplomatic negotiations on the sensitive issue of new posts. Mr Böge and Mr Colom i Naval, you showed great pragmatism in dealing with the negotiations on the adjustment of the multiannual programmes together with all this House’s specialised committees. Mrs Dührkop Dührkop, you rose superbly to the challenge of achieving a consensus on the subsidy programmes for institutions, which was a Herculean task. Above all, however, it was the outstanding leadership of the Committee Chairman, Mr Wynn, which made this all possible. Mr Wynn, you have ensured, over all these years, that the committee’s work has been prompt, objective, competent and sound. It has been a real pleasure working with you and your colleagues.

In short, the budget experts have acquitted themselves with honour in the run-up to enlargement and have created a real masterpiece at the end of this legislative term. Many thanks for the excellent cooperation.

  Garriga Polledo (PPE-DE). – (ES) Mr President, Commissioner, representatives of the Council, ladies and gentlemen, in my capacity as budgetary spokesman for the Group of the European People’s Party (Christian Democrats) and European Democrats, I would like to congratulate the various rapporteurs involved in the budgetary procedure for 2004, as well as the Commissioner, Mrs Schreyer, and her services, for their great cooperation, and also Mr Magri, who, as has already been said, has done a great bridging job within the Council – an always difficult Council – in order to be able to achieve this draft budget.

I would also like to congratulate the chairman of our Committee on Budgets, Mr Wynn – who will speak after me – with whom we have enjoyed five unforgettable years during which he has demonstrated his great political skill and above all his great human qualities.

I would also like to acknowledge the work of the general rapporteur, Mr Mulder, both because, as coordinator of my group, I have closely followed his work, and also because I am going to have to follow in his footsteps as rapporteur for 2005 and I would sincerely like to reach December 2004 with the same sense of a job well done that Mr Mulder must be feeling right now. I know that I have a difficult job ahead, as he has mentioned previously, but that is what Parliament's work is all about.

Our group agrees with the whole of the draft budget presented and we are going to renounce any separate vote. We are doing this for two reasons: firstly, because Mr Mulder’s draft budget is balanced, as a result of negotiation, and takes up the essential elements of the positions of the political groups and because, furthermore, my group offered him support at the beginning of the procedure and now we want to demonstrate it; and secondly because we want to send a message of unity from this Parliament to a Council of Ministers which is prepared to unilaterally reduce the budgetary powers of this House, as laid down in the text of the Convention, which has yet to be approved.

The draft budget for 2004 fully responds to the most significant concerns of our political group. These include the maintenance of a level of payments compatible with the needs of enlargement and with the absorption of the RALs. All of this must be undertaken while applying the necessary austerity in the total growth in spending.

Furthermore, the draft responds to the need for greater parliamentary control of specialised agencies and, furthermore, the amount for the financial packages intended for programmes subject to codecision until 2006 is guaranteed by agreement amongst the institutions. This draft budget also responds to Parliament’s promise to contribute actively to the reconstruction of Iraq without prejudice to the geographical lines, which are the traditional priority of all the political groups.

The Council has finally agreed to the mobilisation of the flexibility instrument: for much less than Parliament requested, it is true, but it is also the case that it is much more than the Council wanted to mobilise, which was zero.

Furthermore, it maintains its pressure in relation to the reform of the Commission by means of this compromise amongst the political groups, which gives the Commission the 272 posts requested in order to carry out enlargement, but which keeps a certain quantity in reserve until this House receives the information it has requested on the development of human resources.

Our task is now going to be to involve Parliament more and more in the legislative and budgetary procedures. We want the Commission’s annual strategy to be discussed here with sufficient time for the preliminary draft to take up and respond to our budgetary guidelines. Let us remember that the Union’s budget is more than an accounting exercise in balancing spending and income: it is the political expression of a desire to create more Europe by means of Community programmes. This is going to require of us authority and efficiency in spending, but let us not forget that now and forever, and, above all from next May, it is also going to require great generosity.

  Wynn (PSE). – Mr President, in the light of what the last four speakers have said there does not seem much left to be said about the 2004 budget. Therefore, I will concentrate on one or two other things. Firstly, I join with others in thanking the Italian presidency for being cooperative in the way we came to a conclusion on this budget. It is nice to see Mr Ionta here with us today he has recently been in hospital and I hope he will send our best wishes for a speedy recovery to Mr Magri who has also been hospitalised. We wish him well and we are sorry he is not here today. But it is important to stress that the cooperation we have had from the Italians has helped in this process, as with previous budgets, whether it be under the Finns, French, Belgians or Danes although with the Finns it was rather nerve-racking when we all came into this Chamber with two different voting lists on the final day. But even then it was high drama!

It is also fair to say that, whilst a lot of thanks have been given to me, I want to reciprocate because this is probably the last budget debate I will be involved in as chairman. There will be the supplementary and amending budget next year, but this will be the last one I will be involved in as chairman for the general process. I have been told what a good job I have done, but you cannot do it unless you are working with the right people. Mr Mulder has already thanked the secretariat. He is right to do so, as we have an excellent secretariat in the Committee on Budgets, not least Alfredo de Feo, who leads that team extremely well. I have three good Vice-Chairmen who support me. I have a very good committee membership who take their subject seriously and show great interest. But the beauty of it is that it is a great team of coordinators, and especially Mr Walter, who makes my life so easy. I say that because I was a coordinator for five years, I have been a chairman for four-and-a-half years and I know which is the harder job it is not this one. It is wonderful being chairman, but the coordinators never get the thanks they deserve. All the coordinators in the Committee on Budgets have worked extremely hard. As you can see with the way that we will vote on Thursday for this budget, it will probably be the easiest budget that any of us have ever voted.

Having said that, I want to touch on a point Mrs Schreyer also mentioned, which is the future and what was proposed by Ecofin. Over the last 15 years in which I have been involved in the Committee on Budgets we in this Parliament have always shown how serious we are about the budget. We are not profligate; we are not wasteful; we do not do things because we just want to do them on a whim. As Mr Garriga Polledo said, there are political aspects to a lot of this budget and it is not just an accounting exercise. But if the Ecofin proposals had gone through – and they could still go through some time in the future – it will be an absolute disaster for Parliament and will lead to chaos. What we need between the two arms of the budgetary authority is a more realistic conciliatory approach from both arms. We have to start trusting each other. In the last four-and-a-half years we have tried to build that trust between our two institutions. But until we reach a position where we trust one another, there will always be suspicion from the Council, which wants to take away our powers, and we will always be suspicious of the Council and feel that if it does that we are going to get our own back in some way, shape or form. We could have lived with what the Convention proposed. We want to ensure that whatever comes in the future gives stability and realism to the system and also to show that we take our position very seriously.

It has been great being chairman of this Committee on Budgets. I still have two presidencies to go – the Irish presidency for six months; and then, for the trialogue and the conciliation in July, I will even be involved in the Dutch presidency. It is a wonderful position to have held. I am grateful to have held it and I just hope that in the future this Parliament has the dignity, powers and ability to serve the people of Europe in the way we have served it during these last five years.

(Applause)

  Virrankoski (ELDR). – (FI) Mr President, right at the start I wish to congratulate the budget rapporteurs Mrs Gill and Mr Mulder and thank them for their excellent work. I would likewise like to thank Mrs Schreyer and Italy, as the country holding the presidency, for their good levels of cooperation. I would particularly like to express my appreciation to the Chairman of the Committee, Terence Wynn, for his role as leader and arbitrator and the constructive cooperation he offered the political group coordinators.

Next year’s budget was drawn up to apply to 25 Member States, as was the wish of my group. This week we are adopting a budget for 15 Member States, but the figures for an enlarged European Union have also been agreed in terms of policy, and they will be adopted in next year’s Amending Budget. This will strengthen the reliability of the budget as a basis for the EU’s operations for the year.

There is budgetary discipline. The payment appropriations for Fifteen Member States are down by 2.9% on this year and total payments for the enlarged EU are only 2.3% higher than this year’s budget. Accordingly, the desire expressed just before the Intergovernmental Conference held by the Member States to restrict Parliament’s current budgetary authority is incomprehensible.

Regarding the details, it might be mentioned that the Group of the European Liberal, Democrat and Reform Party supported the general rapporteur’s areas of priority, which were comprehensively adopted – my warmest congratulations. My group also supported the Commission’s proposal to increase staff numbers sufficiently as a result of enlargement. Despite the Council’s objections this position was adopted.

The most problematic issue was once again Heading 4, ‘external policies’. My group was in favour of participating in the reconstruction of Iraq. During the conciliation procedure Parliament succeeded in squeezing EUR 95 million out of the flexibility instrument. It was possible to finance the rest by reallocating appropriations within the heading.

We are pleased that our group’s other priorities within the context of this heading were also taken into consideration, such as the Northern Dimension, action to strengthen human rights and democracy, and the fight against diseases connected with poverty, such as malaria and AIDS.

Our group has always taken a sceptical view of cash earmarked for various special organisations – the A-30 budget lines. There has always been the view that there is no great justification for them and they have been likened to gifts of cash for Christmas. Now they are to be phased out. The EU’s approach to granting finance is gradually changing to one based on application and is becoming transparent, by virtue of the Financial Regulation. In this connection it is worth mentioning that Parliament succeeded in protecting the funding of Info-Points and rural Carrefours for next year, when their status is to be clarified. But for Parliament’s intervention, things would have been a shambles.

Next year’s draft budget at the end of the day reflects the sense of responsibility that Parliament feels in its role as budgetary authority.

  Seppänen (GUE/NGL). – (FI) Mr President, Commissioner, the EU’s draft budget for next year has remained in the shadow of certain major events. These also nevertheless have an impact on the EU budget.

The first that comes to mind is America’s attack on Iraq, which was illegal when viewed in terms of international law, as it was carried out without a mandate from the UN. The EU pledged EUR 200 million at the Madrid Donors’ Conference to help the United States of America in the post-war reconstruction work in Iraq. In that way, and using money that belongs to all of us, certain large Member States, which did not take part in the oil war, wish to normalise their bilateral relations with the United States.

If a Member State wants to give money to Iraq, this money should come from that country itself. That would have been the case if the flexibility instrument, as it is called, had been activated and EU expenditure had been increased by a corresponding amount. It would not have meant abandoning financial discipline because the grand total in the EU’s budget for next year is the lowest for almost 20 years in terms of GDP. That means the EU is not sworn to the same kind of Keynesian policy on debt as Germany and France, which do not make the same sorts of demands on themselves with regard to discipline under the Stability and Growth Pact as those made on others.

The way things work now is that the flexibility instrument is just partially activated and some of the assistance money for Iraq is being taken from other budget lines. In that respect the reconstruction of Iraq is being paid for by those beneficiaries that are being deprived of corresponding amounts of cash. Our group cannot support the fact that the destruction caused by America’s war in poor but oil-rich Iraq is being paid for by other poor people: the poor in Asia, Latin America and the Mediterranean countries.

The EU constitution was not adopted last weekend in Brussels. That will have no real impact on next year’s budget, but it might have a huge impact on future budgets when talks begin on the financial frameworks for the period 2007-2013. It should be noted how Germany’s and France’s political elite are lumping together continued negotiations on the Constitution and talks on the financial framework. It would seem that this is a threat to those EU candidate countries which insist on their constitutional voting rights and which are net beneficiaries of EU budgetary funds.

It is clear that, under the Treaty of Nice, Spain and Poland have too great a voice in the EU, but the EU budget should not be used for political pressure in respect of these countries. If, however, countries are to be treated in this way, let the same be done with regard to all countries, using the same criteria. With reference to the budget we should put pressure on the United Kingdom, whose net contribution we the citizens of the other countries pay two thirds of. There is no sustainable basis for such discounts on contributions. In exactly the same way as we wish to get Spain and Poland to implement the will of others, Great Britain too should be made to pay its share of EU costs on the same basis as that which obtains with others.

As for Parliament’s own budget, our group takes a critical view of the proposals for Parliament’s funds to be used to aid political parties at European level, which is to say the parties of parties. Financial support for them will mean weakened national parliamentary democracy and a transfer of power to supranational level.

I wish to thank the budget rapporteur and the various group coordinators for their excellent levels of cooperation, although I did put forward some points of view that differ from the general approach.

  Buitenweg (Verts/ALE). – (NL) Mr President, the rapporteurs, Mr Mulder and Mrs Gill, have worked hard over the past year to present a budget which reflects the European Parliament’s priorities but which at the same time fits within the stringent framework of the financial perspectives.

They succeeded in this, and I should like to thank them both warmly for their efforts, their work, but also for the good team spirit and pleasant cooperation which I have experienced from both.

Despite sound preparations, this discussion of the budget appeared to be precarious last week because at the IGC, it transpired that a number of Heads of Government had had enough of parliamentary democracy and threatened to remove the budgetary rights which Parliament has had for over 30 years. They believe that Parliament has too much power and that it sometimes misuses it in order to impose its views in other areas where it has no authority. That is, of course, a little bizarre as a reason, though. If we enjoy parliamentary rights, we can use them, but also in a way that does not please the Heads of Government.

While I do not doubt the legitimacy of the decisions of this House, I do, at times, doubt its intelligence. My group particularly disapproves of the fact that on every occasion, the majority of this House wants to place some of the funds in reserve in order to score a political point. The members of the Group of the European People’s Party (Christian Democrats) and European Democrats, in particular, are very adept at this. Accordingly, some of the funds intended for the reconstruction of Afghanistan have been placed in reserve and will not be released until the Commission has taken action against the large-scale drugs trade on the ground. Like yourselves, I naturally have a great deal of faith in the Commission, but this appears a little ambitious for our officials in Brussels.

The media point, however, has been scored, it has been said, ‘You are opposed to drugs’. Terrific! This does mean, however, that Afghanistan has less money to spend, or does the Group of the European People’s Party (Christian Democrats) and European Democrats intend to release this money at a later date without one single measure being taken against the drugs trade?

Some of the subsidy for non-governmental organisations is also being placed in reserve. The majority of the Members of this House here present would like a little more information from the Commission about how this money has been spent in previous years, and that is of course fine; I want this too. A reserve, however, does not only function as a big stick, it also claims victims. After all, it entails a huge amount of administration and, with this, overheads, because the Commission can only award subsidies to organisations up to the amount that is actively mentioned on the budget line. So, either the Commission will delay the procedures for the award of the subsidies and will wait until all the money has been released – only to be told off by Parliament, of course, for not spending the money quickly enough – or the Commission has to run the procedure twice, with all the red-tape that this entails, and we are, of course, firmly opposed to this red-tape.

The same problem occurs in the recruitment of personnel. A small proportion of the new posts that the Commission needs in order to guarantee the smooth running of enlargement is now being placed in reserve. I can well imagine the reasons for this. Parliament wants more information about the steps that are taken in the Commission’s reform process. That is a good idea and we must request, or even demand, this from the Commission, and, if it does not provide this information, we should have the courage to take political steps against it. Frustrating the recruitment of personnel for enlargement is not, however, the right way to go about this.

The Group of the Greens/European Free Alliance is not, in principle, opposed to deploying the instrument of reserve if it is a means to an end. We ourselves, in fact, suggested placing some of the money for KEDO in reserve when North Korea failed to adhere to all the conditions of this nuclear energy programme. We have also voted for certain other reserves, provided that they clearly served a purpose and that this purpose was achievable within a clear timeframe. However, the instrument of reserves is sometimes used too lightly. We must certainly not prevent the Commission from being able to function properly, certainly in view of the fact that third parties also stand to be adversely affected. We have asked for a split vote for a number of reserves, and I hope that the groups will reconsider whether they simply place the money on the line and subsequently judge the Commission on its actions.

  Turchi (UEN). – (IT) Mr President, I also want to express my thanks, not because it is Christmas, but precisely because it is only right to acknowledge how useful it has been having a chairman like Terry Wynn, even if all these words of praise sound like a ‘beatification’ of Terry who is, on the contrary, a lively and warm personality as well as being extremely pragmatic.

I want to thank all my fellow Members and coordinators for the hard work carried out in recent years. I also want to thank the Secretary-General and above all Mr de Feo, who is Italian, and all those who worked with him. Even though we have had lively exchanges within the committee, thanks are also due to the Commissioner: The fact is that young people like me want to have a revolution but in the end we cannot and so we attempt to contribute in some way. Thanks also to the Directorate-General, now skilfully led by Mr Romero, and those who worked with it.

I should like to say that the work carried out by the rapporteurs in the context of the present budget has been of real importance. I would like to stress my agreement with the proposal to place administrative expenditure in the reserve, in particular for job creation, on the grounds that we must have more information. The funds for the Info-Points, which we managed to have reinstated only by recourse to the conciliation procedure, should not be granted for this year alone but also in following years.

As regards TENs, I want publicly to thank everyone for the assistance this programme received, even if I do not agree with the criticisms made this morning against Mr Lunardi which may, in part, have been voiced because of jealousy harboured by a political group. I believe that the work carried out with the Italian Presidency over this period in relation to my report is something unique which I want to emphasise.

Finally, thank you for supporting the amendment concerning the Centre for the Disabled, which will be presented during the budget vote. This is something I consider essential.

  Van Dam (EDD). – (NL) Mr President, Commissioner, just about everybody is bemoaning the so-called failure of last weekend’s Summit in Brussels. What is positive about the outcome is that we need not worry in our debates about the threat that the Council will touch Parliament’s say in the budget.

At the same time, Parliament should realise that it is mainly the Member States that cough up the money to finance the European Union’s policy. According to an old democratic rule, whoever pays can at least share in decision-making. Moreover, we take the ultimate decisions about the taxpayers’ money. They are entitled to guarantees that their money will be spent wisely.

The rapporteur, Mr Mulder, has presented a modest budget, for which I would like to applaud him. The Council, Commission and Parliament have the responsibility for sound budget management, an important area in which the Commission has dropped huge clangers, failing to deliver on its emphatic pledges from 1999. Reforms are still required to improve management and transparency. In addition, a great deal of work is to be done internally so as to create an organisational culture in which taking responsibility and rendering account are considered to be normal.

I like the amendment tabled by Mr Mulder, Mrs Gill and Mr Garriga Polledo, but surely they are not so naïve as to believe that the Commission’s reforms can be completed by next spring? I would sooner say that they have only just started properly.

One major point of concern is still the enormously high outstanding amounts for the structural funds. They amount to no less than EUR 92 billion, almost an entire annual budget! The strict application of the N+2 rule is a first necessary measure in order to address this problem. At the same time, the policy must become a great deal more coherent. I would therefore suggest for the structural funds policy to focus on Objective 1, for which only the poorest regions qualify. Other forms of structural policy, especially those for the benefit of richer regions, often appear to frustrate labour mobility or lead to distortion of competition. What is also often the case is that national or regional authorities put forward the least effective projects for European aid.

Export refunds are very susceptible to fraud. Those for live cattle should be abolished altogether, certainly when these are exported to countries that are exempt from EU import levies. This is simply asking for fraud carousels. Would the Commissioner promise today that she will present a proposal on this topic before long?

In general, the European Union should let the proximity principle play a much greater role in external policy. The fact is that Member States continue to pursue their own foreign policy anyway. Internationally, they form the key players. The European Union should set itself to coordination and mutual harmonisation, as well as funding emergency aid. Support to the reconstruction of Iraq and Afghanistan becomes the European Union much better than many other forms of external policy. This is why I am disappointed that many in this House are not prepared to set aside substantially more money for the reconstruction of Iraq. Now that it is curtains for the dictator, Saddam Hussein, this would be more than ever appropriate.

I regard subsidies from the EU budget to European think-tanks and organisations promoting the European idea as misplaced. We should not get involved in imposing a unilateral opinion on the citizens. Moreover, these are private foundations that do not serve a general interest, but at best make the European Union even more remote from the public.

  Elles (PPE-DE). – Mr President, like others I would like to thank those who have been part of this budgetary process, particularly our rapporteurs as we come to the end of the fixing of the 2004 budget. As others have commented, it will be sad to have a Committee on Budgets without the chairmanship and the fairness, humour and goodwill of Mr Terry Wynn. But who is to say who will be chairman of that committee? If the biggest group in this Parliament decided to have the Committee on Budgets as its primary committee then it would not naturally fall to the PSE if it was not the largest group. But this is all for the future and we should not be indulging in too much speculation. Rather we should be happy that we have had a great chairman who has been in charge of our committee during this period in Parliament.

I would like to stick to three themes. The first is the question of the Commission reform. In this debate I have heard it said that we should not be having reserves, particularly a reserve on Commission posts at this stage, because the Commission would like to have all those posts for enlargement purposes. We fully understand that, but we think that a small number – 25 out of 270 or so posts – should be located there because we would like to have a clearer definition of what has actually been achieved in the reform process and what still needs to be done.

In this Chamber last month, Mr Prodi, the President of the Commission, was indicating that yes, there are some things, which recent events, such as the Eurostat affair, have revealed in relation to lack of information flow or responsibilities here and there. By 15 February 2004, we would like to see a document that refers to these particular types of items, informally completing the document we received from the Commission a few weeks ago.

Secondly I would like to turn to one particular aspect of this budget, which is external financing. One criticism I heard from Mrs Buitenweg is about why we as a Group have been asking for certain funds to be placed in the reserve. In comparison to many previous years, this year we have been extraordinarily modest in putting funds in the reserve because we want to see some indications in Afghanistan that action is being taken to try to solve the extraordinarily different problems of drug production. 70% of the drugs that arrive in Europe come from Afghanistan.

Mrs Buitenweg! I see you are supporting me in the Chamber. Perhaps under the circumstances I could refer to you as an honorary member of our Group! We are thinking about releasing this money as soon as the reserves are released. We have a letter from Commissioner Patten – you can ask Mr Garriga Polledo – saying that progress is on its way and therefore putting money in the reserve has actually been to some real purpose in that field.

In Iraq, as other Members have mentioned, we have seen some recent changes which will of course change the nature of financing in 2004. My Group looks forward to Commissioner Patten coming forward with the document which is meant to be looking at medium-term funding for Iraq. We believe that further funding could well be needed out of the 2004 budget for this purpose. The flexibility instrument is already in use, but it is for 2003-2004, and therefore some funds will remain should there be other causes which we have to finance, whether in Iraq or elsewhere.

The fundamental political point I would like to make here - and I believe it is a view shared in all parts of the House - is that we cannot continue to finance external policy simply by relying on goodwill when utilising the flexibility instrument. We have to be able, when we come to the next financial perspective, to think clearly what our priorities are and how are we going to be able to meet them. Some Members in the House in 1999 doubted whether we had enough funds in Category IV for external funding. We have been proved right in the operation of this and therefore when these negotiations open out in 2004, with the document from the Commission looking at this question of financial perspectives, we need to be clear that we have the funds necessary for our ambitions.

It seems to me that this is now going to be the big debate we will be holding next year when we have elections: a new Commission will be coming in and a new Parliament. What is the framework going to be for our financial perspectives over at least the five years from 2007 onwards? On the front page of the Financial Times today we see at least six Member States saying that they do not want to exceed 1% of GDP. Our message as a Group is: please do not decide, as governments, to sign up to actions which you then do not wish to finance, because it then makes the whole question of the running of this budget impossible.

In conclusion, when we come to the financial perspectives we are going to have to be very realistic and very coherent, but above all, let us make sure that when we have ambitions we have the means to achieve them.

  Walter (PSE). – (DE) Mr President, Commissioner, let me begin – as all the other group spokespersons have done – by expressing my warmest thanks to the two rapporteurs for their work this year. Mr Mulder and Mrs Gill have produced an outstanding report. I would also like to thank our Chairman of the Committee on Budgets once again for his cooperation over the last two years. He has said that he no longer wishes to chair the committee, but I am sure he will keep his seat in the next Parliament and the House will continue to benefit from his wit and wisdom, unless the British people are foolish enough not to re-elect him. However, I cannot imagine that the British would do such a thing. Of course they will re-elect him and then we will have him back again.

Europe is being built by those who have a desire to create a future and bear responsibility. I think it is important to state this clearly at the present time. In order to achieve this goal, extraordinary patience and an ability to listen are essential, and extraordinary efforts must be made to achieve mutual understanding. Only if we listen to each other and seek to understand each other is it possible to achieve extraordinary things. In this respect, Europe’s citizens can depend on this House. Where others sow the seeds of discord, we have shown solidarity. Where others incite mistrust, we dare to build democracy and trust in each other’s ability. Where others instil fear, we offer fresh prospects, and where others vie for power, we seek compromises. The result is the ability to produce a budget like the one before us. It is thrifty, sound and forward-looking.

Yes, it is thrifty, contrary to popular opinion. This morning, the President of this House, speaking in this debate, pointed out that over recent years, the total discretionary expenditure added by the Council amounts to EUR 33 billion, whereas Parliament, under its discretion, has added just EUR 21 million. In other words, we have exercised far more restraint in this area, and despite the frequent accusations, we are not the ones constantly stretching the budget.

In fact, the 2004 budget represents a decrease of 0.26% for commitments for the EU of the Fifteen and, indeed, a reduction of 3% for payments. Even if we include the new countries in the equation, the staff-to-population ratio falls from 0.8 officials per 10 000 inhabitants to 0.7 per 10 000. Let me give you a comparison: according to the OECD, Spain, for example, has 388 officials per 10 000 inhabitants. This is the personnel basis on which we are shaping the future of the European Union.

In other words, we are extremely thrifty, and we also exercise sound financial management. We want the funds to be spent on the purposes for which they are intended, which is why we exercise control over spending, firstly through the Committee on Budgetary Control, but also at the financing planning stage. That is why we set up reserves in various areas. This year, we have formed relatively few reserves. Those we have set up are linked to specific conditions. We will dissolve these reserves as quickly as possible, as soon as we know that the relevant measures have been adopted. Blind faith would be overly optimistic, while excessive mistrust would be paralysing. We are therefore adopting a middle way. As Social Democrats, we are trying to work with properly established and tightly restricted reserves.

This budget also shows that we are future-oriented. That is why we in the Group of the Party of European Socialists (PSE Group) can say that we are very, very satisfied with the result. What we have achieved is that in future, we will be working through OLAF to combat VAT fraud in Europe. Here, financial resources that can be generated must be generated. Next year too, as in previous years, we will continue to promote small and medium enterprises, for they are the backbone of the European economy.

We want to prepare for demographic change, as population levels are declining throughout Europe. In Spain and Italy, the population figures are already falling. In Germany, this will be the case from next year. This will have an impact on life in our communities. How will we target the Structural Funds to take account of the fact that in future, Europe will have around 15% fewer people? We need to find an answer to this question – and we cannot wait until the problem is upon us. We need to make preparations now.

Under Heading 4: External Policies, we are in part consolidating existing measures. However, we will also master the new challenges. We will provide adequate funds for Iraq for measures which can actually be implemented. Nonetheless, we will still provide EUR 168 million for Afghanistan, and we will continue to participate in the funding of measures in the Balkans. What we need, however, is not just remedial aid after the event; we must also be working with an eye to the future. That is why we are pleased that we have been able to expand the resources for preventive measures: to promote human rights and democracy around the world and to combat ABC weapons and land mines.

I would like to express my warmest thanks to everyone, including the Commissioner. I think we have a very good budget before us. Naturally, we will be voting for it.

IN THE CHAIR: MR ONESTA
Vice-President

  Jensen (ELDR). – (DA) Mr President, Commissioner, President-in-Office of the Council, the budget for 2004 is in many ways a complicated budget because enlargement will happen part way through the year. If we were so successful at putting the budget in place, it was of course due to the splendid cooperation between the institutions and, of course, to fantastic contributions from the rapporteurs, the coordinators and our chairman, Mr Wynn, who is truly adept at cooperation. Our success should be honoured and appreciated and not be greeted with attacks on Parliament’s budgetary authority.

I wish especially to emphasise three things about this budget for 2004. First of all, we put enlargement in place. Secondly, we found the EUR 200 million for Iraq. It is now that the Iraqis are short of money. In the longer term, Iraq is of course a country rich in resources that can fund its reconstruction itself. Thirdly, I wish to mention a lesser, but nonetheless important, matter for the next few years. This budget placed special emphasis on the decentralised agencies, so we can sincerely welcome last week’s summit, where something was in fact decided. At long last, domiciles were established for a whole series of agencies following the failure to decide about this matter at numerous summits. About time, too.

A steady stream of new agencies is now being set up, and the good thing about these decentralised units is that they guarantee expertise, concentration upon a particular area and the arms-length principle when it comes to administration. The problem, however, is that the many agencies may lead to unduly large expenditure on administration, both because we obtain small units that are expensive to administer and because we use the action appropriations for these agencies. It is therefore good that, with this budget, Parliament has emphasised that we wish to have control over the development of the agencies in the future, and that we wish to have transparency.

  Hyland (UEN). – Mr President, I wish to begin by complimenting the rapporteurs, in particular Mr Mulder, and I will confine my brief remarks to the agricultural budget.

The current figures in proposed agricultural spending amount to over EUR 40 billion for the enlarged EU of 25 next year. This is a vast amount of public money. I am aware that there are many critics of the European Union's common agricultural policy, which continues to receive more than half the annual budget. I have consistently defended this policy and believe it has been one of the most successful common policies operated by the Community since its foundation. From the beginning, the CAP was always about far more than products and markets: it was, and is, about people and communities. Critics of the CAP seem to lose sight of this. The second pillar is about rebuilding rural communities and restoring urban/rural balance.

The critics also lose sight of, or choose to ignore, the series of major reforms which the CAP has undergone over the past decade, culminating in this year's Luxembourg accord. I very much welcome the direction in which the CAP has evolved. The future is in a multifunctional agriculture which serves social, environmental and consumer needs.

Farmers continue to raise doubts about the continuity of budget support for family farming. In many respects this is an unnecessary waste of energy. With budget stability to 2013, I suggest they use this period to replan their farming practices, to become more efficient and use the opportunities of recent reform to meet the challenges and opportunities which the future holds.

  Dover (PPE-DE). – Mr President, going back into the early part of the preparation of these budgets, first, in several instances the other institutions wanted enormous increases in their budgets. I accept that we are expanding from 15 countries to 25, that we are expanding from 11 languages to 20, but I was delighted that the Council of Ministers chopped the huge increases being asked for by the Court of Justice, the Economic and Social Committee and the Committee of the Regions.

With regard to Parliament's budget, at the start we faced the fact that there could have been a statute for Members of the European Parliament. We all agreed, across all parties, that this would have meant an increase of probably tens of millions of euros in the budget for Parliament. It is not my job to say here and now whether it is a good or a bad thing to have a statute, but I must point out that it many mean a further increase if one is ever implemented.

We have funding for political parties starting in the middle of next year, after the European elections in June. Again, we have reserved enough money within the budget and it is quite right and proper that we do so. We will have proper working arrangements that are above board, with proper checks and balances, but it is an item on which we have to finalise some of the details.

Looking ahead in relation to languages, I should like to think that overall there would be a use of fewer languages. I know that it is right and proper, with enlargement, to give all the new countries the possibility of using their native languages, but we ought to rationalise the use of languages in future years. I hope that minds will be concentrated in that regard.

There is one unfinished item of business: whether Parliament should have a health insurance scheme for former Members. I am delighted that a few weeks ago a report was commissioned. I understand that the results will be published next month. This will enable us to look at whether this is a good and sensible thing for former Members who fall ill. They would have to have served two full terms 10 years. I consider this to be something that Parliament needs to look at in order to redress the imbalance between ourselves, who as Members of the European Parliament do an awful lot of travelling and are put at health risks because of that, and other people in the various institutions.

We have heard mention today of the overall cost of the European Union to the taxpayers in Europe. I am convinced that the Financial Times has got it absolutely right, as Mr Elles pointed out. Admittedly we can spend upwards of 1.24% of the gross domestic product of all the countries on the European Union budget. I am so delighted that we have managed to drive that percentage down over the four years that I have been in this Parliament, so that even with enlargement, we are just below 1% of the gross domestic product. That is a huge compliment to everyone involved: the Commissioner herself, the staff of the Commission, the Chairman of the Committee on Budgets, the Council of Ministers. Everyone deserves credit. Therefore I would like to see us carry on giving better value for money to the European Union taxpayers over the years. They want to see the real cost of Europe reduced. That way they will see that we are responsive to their wishes.

  Dührkop Dührkop (PSE). – (ES) Mr President, I am speaking as draftsperson of the opinion of the Committee on Budgets on the former A-30 budget lines. This is a series of budget lines which financed subsidies from the appropriations included in Part A of the Commission’s budget.

I would like to point out that, with the entry into force of the new Financial Regulation, it became necessary to adapt the subsidies to the rules of the new Regulation. Firstly, the spending in the A lines had to be reclassified as operational appropriations, rather than administrative ones, and, secondly, as laid down in Article 49 of the Financial Regulation, the legal basis making it possible to execute these appropriations had to be created.

In line with this Article 49, at the beginning of the summer of 2003, the Commission presented seven proposals, which took the form of a multi-annual Community action programme, with the aim of guaranteeing its entry into force in 2004 so that the activities of the subsidised organisations could continue.

Over recent months, the main rapporteur and the draftsmen of the committee opinions have worked together to maintain a common position for the seven proposals with the Council at all times.

I would now like to focus on the result of the conciliation of 24 November, the essential points of which were the duration of the programmes, the financial contribution and, above all, the issue of pre-allocation or earmarking, which is undoubtedly the main stumbling block.

Before that, however, I would like to offer my profound gratitude to all the rapporteurs of the committees involved and the general rapporteur, Mr Mulder.

First stumbling block, the duration of programmes. The European Parliament requested that all the programmes should be of the same duration, until 2006, in other words, until the end of the current financial perspectives, a position which was accepted by the Council.

Secondly, with regard to the financial contribution, I believe we can feel more than satisfied, since we have been able – if you pardon the expression – to ‘wrench out’, as a total for the seven programmes, EUR 23.1 million, more than the sum proposed by the Council. Those of us with experience of this House know how difficult it is at times to get anything out of the Council, however insignificant.

Thirdly, with regard to pre-allocation – which I said was the most troublesome issue – the agreement provides for the inclusion of beneficiaries in the basic instruments, specifically in the citizenship and culture programmes for 2004 and 2005, and with appropriations within lines, not in reserve – as voted for at first reading – but with the same quantity. This means that with a view to the renegotiation of the programmes after 2006 – that is, the renegotiation in 2005 for the new programmes in 2007 – the benefiting organisations have sufficient time to adapt to and prepare for the system of invitations to tender, as laid down in the Regulation.

Finally, I believe we can all take mutual pleasure in this result, because in this way not only do we have the house in order but we also guarantee that the valuable activities of the different organisations included in these programmes are not jeopardised or interrupted.

  Van Hecke (ELDR). – (NL) Mr President, I should, in turn, like to congratulate Mr Mulder on the result of all his efforts: a well-balanced budget which reflects the largest possible consensus in our Parliament. Nevertheless, as rapporteur for the budget of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, I am left with a somewhat unpleasant feeling. After all, it has become a constant during the annual budget negotiations that in terms of foreign policy, all kinds of new pledges are made, as a result of which cuts have to be made elsewhere, which I regret. Indeed, how can the European Union be a credible and effective player on the world stage if we get Latin America and Africa to pay for Iraq’s reconstruction? EU Member States often tend to make big promises, but then forget them when it comes to putting their money where their mouths are. This is why I am pleased that the Committee on Budgets has backed my main amendment, in which it is clearly stipulated that new future commitments can only be funded if these are met by new additional financial resources.

Commissioner Schreyer was right to note that the actual extent of expenses still remains under the statutory ceiling of 1.24% of the EU’s GDP, so I see it as extremely significant that the Committee on Budgets accepted the proposal to set aside a substantial part of the EU budget’s margin, namely EUR 16.5 billion for external EU policy. After all, anyone who has ambitions on the world stage not only requires one voice but also more funding. If we fail to succeed in this, we will be excluded from the negotiating table through nobody’s fault but our own – which is often the case as it is – and will afterwards be presented with the bill for international crises without being able to influence the decisions made.

  Ferber (PPE-DE). – (DE) Mr President, Commissioner, ladies and gentlemen, I would just like raise a couple of points in connection with the adoption of the 2004 budget today. Firstly, as I recall, this Commission pledged, when it came to office, to carry out reforms and equip the European Union and the European Commission with the capacity to act for the future and make them less vulnerable to fraud.

The 2004 budget will be your last budget, Commissioner, and it is not yet apparent that all the reforms have been completed satisfactorily. That is why I hope we can agree to put the relevant items in the reserve so that you can finish the work. We will gladly release the funds as soon as the relevant documents have been submitted to us.

I want to raise a second issue which I addressed in very clear terms in connection with the first reading, namely the issue of ‘Europe of the citizens’. We fought for this, and I am very happy that an agreement has been reached with the Council and a legal framework has now been established for city partnerships that will help us to overcome all the problems and create legal certainty for the next three years. It is undoubtedly a programme which can be extended. However, I now hear that there is a solution for the Carrefours and Info-Points for 2004 but not beyond. I do think it is rather worrying, especially after talks with the Info-Point in my home town, that there are obviously different budget lines from which the Info-Points can draw funding and that not all of them are affected by the problems relating to the new budget regulations. Perhaps the Commission could check internally to see where the error lies. I do not think that we can offload the problem on these agencies, which are performing outstanding service to the European Union by providing information to broad sections of the public.

Continuing our debate of this morning and in response to the Intergovernmental Conference of last weekend, I would like to make one thing very clear: it is quite pointless at present to mull over how much money the European Union will have at its disposal after 2006. From this perspective, I can understand why the six governments sent their letter, if we do not yet know what the agenda for the European Union will be after 2006. In my view, that is the first question which must be answered. If an agenda is defined, adequate funds must be provided to carry it out. It will not work if the Member States say: ‘That is the financial platform, but everything that I wish to achieve must be carried out anyway.’

We should use the time that the Heads of State or Government have given us to consider what the European agenda should be and how much money it will cost to fulfil – and this financial framework should then be made available. That is the only rational approach when we come to discussing the financial period after 2006.

  Guy-Quint (PSE). – (FR) Mr President, Commissioner, I should first like to congratulate our rapporteurs, Mr Mulder and Mrs Gill, as well as the entire Committee on Budgets and those who have worked on preparing the 2004 Budget. It all happened with unaccustomed ease, within a completely new budgetary framework and in the context of an enlarged Europe.

I believe that our Committee has achieved, for this legislative period, a mature ability to compromise and has proved itself capable, under the leadership of our Chairman, Mr Wynn, of developing successful working methods, which have borne fruit this year in particular. Our group’s priorities have been heard, taken on board and reinforced. I am thinking in particular of Community policies to benefit companies, especially small and medium-sized enterprises. There have been all those policies that have contributed to the construction of a people’s Europe, such as town-twinning projects in the enlarged Europe, and also those such as the earmarking of funds for vaccination against poverty-related diseases, which make Europe’s active role in the world visible.

A trouble-free budget, then, but one marked by a general reduction in Parliament’s powers on financial matters. Yet again, the Council has challenged our rights and prerogatives. And for what? It is high time that questions were asked about the discrepancy between political rhetoric and budgetary feasibility.

Every year, I stand before you and denounce what has become a recurring problem. The Council’s frosty attitude is prejudicial to our legitimate budgetary ambitions. Furthermore, the Brussels fiasco has demonstrated what kind of future our Heads of State or Government have in store for Europe. We cannot achieve a Europe that is genuinely relevant to the lives of its citizens without major, far-reaching policies. And major, far-reaching policies require a budget to match.

The Council seems to have ignored this obvious fact, focused as it is on the Stability Pact and pandering to national self-interest. Is this the Europe that we want to build? It most definitely is not. It is, however, the Europe that the Council would like us to have. During the budget vote, we had an example of such inconsistency with information policy. We want to bring Europe closer to its people. Being concerned about the general public’s disaffection with European integration, we are trying to unite the people around major projects. All of this requires a coherent, ambitious information and communication policy and without Parliament’s intervention, funds set aside for this policy would have been subject to budget cuts from the Council.

What is most serious, however, is the reduction of our budget. Payment appropriations have fallen this year below 0.99% of GDP, their lowest level since 1987. I therefore endorse Mr Cox’s remarks and Mr Prodi’s analysis in response to the calls by six Heads of State for payment appropriations to be capped to 1% of the GNP.

Where is the consistency with the Lisbon Agenda, the Union’s blueprint for growth and competitiveness? Miracles do not happen, and nobody has ever managed to square the circle. Being Head of State or of Government is a position of responsibility; it is about ensuring the matching of means consistent with objectives. If the Council wishes to lead us into a dead end, it is up to us, the European Parliament, to remind it of its promises. I do not see how we can finance these crucial reforms on increasingly meagre resources.

MEPs are elected by the people; they are elected to take responsibility, and I am grateful to Commissioner Schreyer for reminding us of this. They are capable of preparing EU budgets within the bounds of fiscal orthodoxy, and will continue to be so, but they also know that the EU must abide by approved – jointly approved – political priorities. The Council must respect Parliament now, and in the future must show more trust towards this House, which enjoys the legitimacy of the ballot box.

  Naranjo Escobar (PPE-DE). – (ES) Mr President, Commissioner, representative of the Council, ladies and gentlemen, please allow me to begin by saying that, following the events of last weekend, and what has already been said here this afternoon, the main virtue of this 2004 budget, for an institutionally very complex year, is the mere fact that it exists at all.

The budget offers stability and confidence, key factors if enlargement is to be a success. It is therefore essential that the Commission and national administrations respond effectively. This Parliament has offered its support for the reform of the Commission and its request for posts, because we believe that the Union’s budget is synonymous with credibility, and there can be no credibility when in the last three financial years the average use of available payment appropriations stood at 85%, according to the European Court of Auditors.

The agreement between the Council and Parliament has once again been in the interests of the citizens. Once again, Parliament has demonstrated flexibility in the negotiations, without relinquishing its political priorities. The work of the rapporteurs, of the chairman of our committee, Mr Wynn, and of the Members who have participated, has been of great merit, because, amongst other things, the agreement allows us to maintain a level of spending which is in line with the efforts of the States to achieve a balance in their public accounts, to deal with the Union’s basic commitments in processes of institutional crisis – I would remind you that next May there will be a Latin American-European Union Summit, and it is important to stress that, from a budgetary point of view, the creation of a solidarity fund has also been promoted – and, finally, give value to Community policies which have, and will have in the future, a fundamental role. I am talking, for example, about the financial support for programmes such as Argo, which is essential to the common management of migratory flows and the control of external borders, as well as the approval of a Community initiative in favour of the victims of terrorism, which, beyond the sums which have been directed towards them, demonstrate to the citizens that the Union is involved in the fight against terrorism in any of its forms.

  Färm (PSE). (SV) Mr President, Commissioner, ladies and gentlemen, we have had broad agreement about the budget for several years in succession. The main reason for this is that we have rapporteurs, a committee chairman and a collective spirit in the Committee on Budgets that I think the Member States should learn from, if what happened in Brussels last weekend is anything to go by. I should like to thank the rapporteurs and my colleagues.

As last year’s rapporteur, for the 2003 budget, I have this year mainly had responsibility for implementing the budget, and that is something on which I thought I would reflect. Adopting a budget is just the first, relatively easy, stage, and then comes what is really difficult, namely implementing it. In that respect, I am concerned, both for 2003 and for the future, for example 2004. For a number of years, we have had large surpluses and large outstanding commitments, known as RALs, especially within the structural funds system, and these are huge amounts. Unfortunately, we are seeing this now too. We have recently had a report on the implementation for 2003 that identifies clear problems, even though there are areas that are being improved. We have recently decided on what is known as the global transfer of ever larger amounts left at the end of the year that have to be moved from under-implemented areas of the budget to other areas. That is, to an ever greater extent, particularly worrying when it comes to category 4, an area in which we have a severe lack of resources. It is also worrying when it comes to the Community initiatives, in which we have problems with a very large proportion of the resources. When even implementation of the information programmes is lagging behind in a situation in which we face large tasks of providing information in connection, for example, with the new Constitution, enlargement etc., it is clear that it is in actual fact a problem. Something serious must happen in this area before 2004 if the new Member States are not to be very disappointed when they see that implementation is at a quite different level than that stated in the budget.

For several years, we have adopted a variety of reports on implementation etc. I believe that Parliament might need to adopt a more extensive, purposeful strategy in order to tackle the annual surpluses, the accumulated quantity of outstanding commitments and the poor implementation and to do so, for example, through a special report involving a strategy of some kind for dealing with the problems that cause this lagging behind.

Last year, we in the Group of the Party of European Socialists put forward a number of proposals concerning simplification. I think we should extend this to include a more radical and strategic review of the way in which budget implementation in actual fact operates. I have seen on several occasions what I think is an absurd situation in which, for example, regions, universities and non-governmental organisations cease to seek appropriations, partly because the application procedure is so complicated and partly because the payments take so long to materialise that the applicants incur financial problems even though their projects have been earmarked for appropriations. I believe that the solution lies, for example, in continued reform, more modern budgeting techniques, more up-to-date auditing and a culture of greater openness. In the long term, I even believe that we could question the system of commitments and payments. We must definitely obtain financial perspectives that do not lock up all the sectors for seven years, something that is impossible to manage in the end. Parliament must perhaps also realise that the budget cannot simply be increased without ensuring that the Commission has the resources required for implementing the decisions.

Those of us who may possibly be re-elected and who will then immediately have to begin debating Agenda 2007 will be faced with a large task as the next period of office begins.

  Dell'Alba (NI). – (FR) Mr President, Commissioner, I should like to add my thanks to the rapporteur, to the Chairman of the Committee on Budgets, Mr Wynn, who has led negotiations with great authority, and also to the Italian Presidency. Credit must be given where it is due. Yes, we have had some long and difficult sessions during the conciliation process. Nonetheless, the Italian Presidency has, I believe, contributed greatly to the final outcome, notably with respect to the mobilisation of the flexibility instrument.

When one considers what is happening in Iraq and the prospects ahead of us, it is regrettable that we had to squabble over peanuts, while the needs of that region, and the role that Europe could play there, are much more pressing concerns than the EUR 95 million obtained at the conclusion of negotiations. Given the threats, recrimination and pettiness that have dogged us, is it any wonder that we had misgivings when voting on this budget? Six countries, including some founding Member States, now come and tell us that yet again we have to reduce a budget that is already ridiculously low in relation to needs and to the ambitions of the Europe represented by the letter of amendment under discussion this afternoon.

I believe that we have indeed sunk to a very low level in our debate on budgetary and fiscal policy. We understand that certain countries, by issuing their threats, actually wish both to launch a challenge to those countries that have, supposedly, prevented the Constitution from being adopted and, more importantly, to take a retrograde step, without taking into account either our institutional role or the ambitions that Europe ought to have. As Greater Europe is enlarging to 25 and later to 27, at a time when the new democracies are yearning for democracy, this threat consists of providing even less than we did for Spain and Portugal, and actually to provide less than the already meagre offering we are making today.

You are signatories, so why do you not abandon the CAP? I would say to President Chirac that doing that – to take just one example – would, even now, make it possible to save half of the budget, and redirect it towards other forms of finance. We could get rid of export refunds, given that, in any case, blatant examples of fraud have been uncovered. We have to get tough.

In this light, it is appalling that this weekend’s negotiations on Parliament’s role in the budgetary procedure have failed, as, indeed, have the negotiations as a whole. I believe that its success would be a step forward for Europe. As for Parliament’s role, I think it has shown more rigour, more European spirit in the work carried out to establish a budget. In this regard, I should like to pay tribute to Mr Mulder, the rapporteur, for retaining the cap, despite the fact that the Council has negotiated this way not by accident, but deliberately in order to reach the conclusions that we now know. So this is my tribute to Parliament for this budgetary year 2004.

  Pronk (PPE-DE). – (NL) Mr President, much has already been said about the budget. Nevertheless, I believe that we can give ourselves a little pat on the back today.

This week’s The Economist states that the gross national product of the European Union has risen above that of the United States again this year. This means that we have become the world’s leading GNP power, and out of all of this we are spending 1% on this budget. That 1% ensures that we are able to maintain the possibilities of that GNP. That 1% is truly the best investment imaginable, therefore; and you could make yourself extremely sad listening to the weeping and wailing in the Ecofin Council.

I do think, however, that the issue of Ecofin is a difficult one. What does Ecofin consist of? It consists of ministers who think that they should in fact be prime minister. They think it totally unfair that there is also a European Council; they believe that they themselves are that Council, and thus they go ahead and make their own policies.

That is the main problem at this time. The Treaty assumes that there is one European Council, which has a definite coordinating role. The members of Ecofin think that they, too, play that role, and the way in which they go about it is so parochial, so sad, pedestrian and mournful, that it makes us shiver. Naturally, everyone thinks that I am only talking about Mr Brown, but unfortunately there are other ministers, too, who think along the same lines. That is a problem, and I think that this is perhaps the main point. I am not concerned with restricting the rights of this Parliament, but what would be eminently possible would be to restrict Ecofin’s rights somewhat when the European Council meets again. This might enable us to be a little more forward-thinking and to finally go the right way about drawing up an EU budget, rather than only going by the lowest common denominator out of the 15 – soon to be 25 – Member States.

  Pittella (PSE). – (IT) Mr President, Commissioner Schreyer, ladies and gentlemen, because this year’s budget is the budget of an enlarged Europe, we must understand – as Members have done – the substantial negative factors accompanying the excellent work carried out by the rapporteur, Mr Mulder, the chairman, Mr Wynn and the coordinators.

Whilst underlining the positive mediation role carried out by my coordinator, Mr Walter, I want to point to three negative factors: First of all, payments have been maintained at very restrictive levels, one of the lowest for the last ten years; secondly, in the context of the structural funds, at the end of the year we saw the usual refund of almost EUR 5 billion to the Member States; thirdly, the dispute – already referred to – over Heading 4: as it has done before, the Council proposed cuts in Parliament’s traditional priorities for the purpose of financing this year’s emergency, Iraq. Last year it was Afghanistan. It is against this background that the usual fight between the poor relations has broken out: cut the budget lines for MEDA or for Asia, cut the funds for illnesses linked to poverty or the funds for humanitarian aid, and other possible solutions.

I wonder how far the flexibility instrument and painstaking accounting will enable the circle to be squared? Moreover, as if that were not enough, this year the entire budget procedure has been weighed down, as we all know, by a series of attacks against Parliament’s budgetary powers in the context of the work of the Intergovernmental Conference.

It is clear that the problem is political and much broader, as many Members have noted. The problem arises from the lack of generosity on the part of certain Member States towards the Union – yesterday’s letter is a further demonstration of that – as if the road travelled together so far were not sufficient to demonstrate that the resources granted to the European Union are resources given to ourselves, for the peace, security and well-being of the Member States.

The accounts of the European Union cannot be taken as the starting point for establishing its political priorities. This is why I appreciate the action taken by Mr Prodi and by the Commission over which Mr Prodi presides: because the Commission is succeeding in providing guidance. Our political initiative, and that of the European Parliament, must strengthen this ability and force the Member States to transform their short-sightedness into the capacity to create a vision, to give political direction enabling recovery to take place, to make further progress in the field of a major supranational authority.

What we want to achieve is not merely a wider geographical Union of 25 States, what we must achieve is a genuine political objective.

  McCartin (PPE-DE). – Mr President, ten speeches ago our committee chairman, Mr Wynn, said that everything that was important had been said.

I want to add my voice to those who congratulated Mr Mulder, the chairman of the committee, Mrs Schreyer and the expertise that we have all around us. Look at all the expertise that is involved in this job and I genuinely mean 'expertise' of our assistants in our Groups, the staff of the committee and the Commission and the experts in the Council of Ministers. Then look at what we apply all this expertise to: a game that I have sometimes described as push penny, which was a game played on a window sill or a table using two pennies, a halfpenny and two sets of goals and you push the penny around. I am becoming increasingly disillusioned with this whole budgetary procedure and I tend to see it as a game of push penny. Literally one cent, one per cent of the GDP of the European Union, and what power do we have over it?

The agricultural budget has been given to six or seven million people out of the 400 million people in the Union. It is spread most unfairly: EUR 17 000 per farmer to French farmers, EUR 3 000 per farmer to Portuguese and Greek farmers. But we have to forget about that. The Council puts that there and that has to be financed anyway.

Look at our next big spending: regional policy. What does it do? I come from a country that received generous portions of regional finance early on, but that is not so today. Spain, for example, receives a net transfer of about EUR 200 per capita a half per cent of GDP. If Spain is an example of our policies of solidarity in regional policy, then I say it gets nothing. That half per cent of GDP makes no difference: it is imaginary. Mr Aznar may sell his policy of social economic cohesion. I say we need to look at all this again.

There are so many things we could do without increasing public spending throughout the European Union by transferring some things from national competence to European competence. Development cooperation has to be one of them and research has to be another. We are not going to build a Community and send in regulations to the new countries in Eastern Europe. We are already unpopular. Nobody is questioning the existence of the state. There are a lot of people questioning the existence of Europe. If the budget is to be an instrument of building Europe, we had better start thinking anew.

  McMillan-Scott (PPE-DE). – Mr President, I would like to congratulate the rapporteurs and indeed all those concerned with the budgetary process. I am rather an absentee member of the Committee on Budgets myself.

I wanted to talk this afternoon about a small but highly sensitive programme the European Initiative on Democracy and Human Rights, which is Line 1904 in the budget and to which amendments have been tabled on which we will vote tomorrow. I was the rapporteur who set up this fund in 1992, which now has EUR 100 million in it. I am currently rapporteur for the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy on the two financial regulations which will cover the financing of this programme in 2005 and 2006, as well as the communication from the Commission called 'Reintegrating human rights and democracy in the Mediterranean'. It is on this particular point that I want to focus.

It seems to me that we need to be very conscious of the arc of instability running up from Morocco through the near-neighbour countries to the European Union as we enlarge next year. Indeed this whole region was called an 'arc of reform' by President Bush, but it is not so. There are many problems, some of which were referred to by Mr McCartin just now, and by other speakers too.

The European Parliament, which set up this Initiative for Democracy and Human Rights, should now encourage the Commission immediately to refocus its 2004 priorities on this wider Europe programme, and in particular on the Arab countries. Some will know that the UNDP 2002 report focused on the lack of democracy in the Arab countries. The 2003 report contains surveys of public opinion in those countries which show that the Arabs actually have the highest demand and appetite for democracy of any region in the world.

We in the European Parliament therefore have a special duty to sustain, encourage and develop those programmes, particularly in 2004. I intend to make use of the codecision on these two financial regulations to encourage the Commission and the Council to allow the European Parliament once more to have the oversight that it used to have on these programmes and to provide the political cover which the Council of Ministers cannot provide.

  Laschet (PPE-DE). – (DE) Mr President, ladies and gentlemen, as the final speaker for my group before the rapporteur, I wish to pay tribute to the major consensus which we have achieved here. However, I also have a number of critical comments concerning the manner in which the Group of the Party of European Socialists has liaised with the press during this budget procedure.

The basic question is this. Can the budget be used for political purposes? Can we place items in the reserve in order to achieve political goals? We seem to be doing so in a wide variety of areas, Mr Walter. We are doing so in Afghanistan, because we have said: ‘Various things that this House views as desirable are not happening in Afghanistan. We have the impression that the Commission is downplaying the importance of combating the drugs trade. Please supply us with the information about what you are doing, and then we will release the funds.’ Mrs Gill’s budget is full of reserves which we intend to use as a means to persuade the administration to take action and ensure that at least some progress is made. In this respect, this budget is indeed an instrument for this House to signal its political goals.

We in the Group of the European People’s Party (Christian Democrats) and European Democrats adopted the same approach to the Vienna-based European Monitoring Centre on Racism and Xenophobia (EUMC), when at the height of the debate – namely when the Centre refused for more than two weeks to publish a study on anti-Semitism which was then published by our fellow Member Mr Cohn-Bendit and others – we asked: ‘Why on earth are you getting EUR 6 million per year if you are not going to publish your reports?’ We were told: ‘You cannot suspend its funding.’ That was precisely what we did, although Mr Walter did not notice. When he finally woke up, he issued press releases that said: ‘Mr Laschet has no expertise whatsoever. The Committee on Budgets cannot do this.’

Mr Walter, I would have expected you to table a motion here today to retrieve the funds from the reserve. After all, the plenary could have made that happen. Just because you sleep through decisions that we take in the Committee on Budgets, it is unfair of you to go to the press and issue this kind of press release. I will give you a shout at around 5 p.m. today, shall I? ‘Good morning, Mr Walter, the items have been put on ice, and the Committee on Budgets will only release them when the confusion between politics and academia at the EUMC has been resolved’.

You might like to mull over this simple piece of advice, Mr Walter, before you make such ridiculous statements again.

  Mulder (ELDR), rapporteur. – (NL) Mr President, it is very kind of you to give me the floor once more. I should like to thank everyone who has contributed to this debate. I am glad that there is indeed a broad consensus, in so far as I am able to bring this about. However, that is not the reason that I have asked for the floor.

Mrs Gill and I have had an excellent working relationship this year, but we have forgotten one thing this afternoon. We have not thanked the Commission specifically enough for its constructive cooperation. Mrs Schreyer was always very open and always available for discussion, as were her officials. We greatly appreciate this. This budget could not have been achieved without the active cooperation of the Commission in seeking solutions to the problems that arose in the course of the year. Once more, my thanks for this, and my thanks once more to every one of you.

(Applause)

  President. – I believe, Mr Mulder, that the applause coming from all sides of the Chamber is ample display of this House’s gratitude to you for your work.

The debate is closed.

The vote on this important dossier will take place on Thursday at 11.30 a.m.

⁂

Thus concludes our budget debate. The sitting is adjourned until 5.30 p.m, when it will resume with questions to the Council.

(The sitting, adjourned at 4.56 p.m, resumed at 5.30 p.m)

IN THE CHAIR: MR PUERTA
Vice-President

WRITTEN STATEMENT (RULE 120)

  Boudjenah (GUE/NGL). – (FR) The 2004 Budget for an enlarged Europe is less than 1% of gross national income, the lowest since 1997. Commitments are decreasing; payments are decreasing. Structural funds, such as agricultural expenditure, are similarly decreasing. Funds from Heading 4 allocated to foreign aid have been reduced to a bare minimum: aid to Latin America has also been cut by EUR 35 million. There is great financial pressure on essential elements of EU policy, such as human rights or the duty to provide help to the most needy. Funds for development aid have been similarly hit by measures of devastating severity. In such conditions, how can we seriously believe that poverty will be eradicated by 2015?

As for the question of funds for Iraq, it is not only a matter of finance. The occupation must end immediately. The Iraqi people need to recover their sovereignty as quickly as possible so that they themselves can identify their needs and arrange the means to satisfy those needs. Recourse to the flexibility instrument will release EUR 95 million. The solution proposed – to reduce funds from Heading 4 – is unacceptable. This Budget does not meet the challenges that the EU must meet today for a fairer, more caring world.