Verbatim report of proceedings

Wednesday, 11 May 2005 - Strasbourg

18. 2006 financial year

  President. The next item is the presentation by the Commission of the preliminary draft general budget – 2006 financial year.

  Dalia Grybauskaitė, Member of the Commission. Mr President, the Commission would like to present the preliminary draft budget which we adopted on 27 April. This is the last budget for this current financial perspective. In our draft, we concentrate on the main political goals agreed by the Commission and Parliament, relating to four main policy areas: the relaunched Lisbon Agenda, security and solidarity, enlargement, and external relations. I will discuss these four policy areas.

The core priority of this budget is the relaunched Lisbon Agenda, which aims to strengthen economic growth and create jobs. The European budget contributes to this objective with three sets of policies: internal policies, agricultural development and structural policies.

Concerning internal policies, an increase of 2% is envisaged. Contributing directly to the Lisbon goals, research and development will record an increase of 4.7%.

The common agricultural policy also shows a clear overlap with the goals of the Lisbon Strategy. The year 2006 will be the first year when the funds from direct income will be transferred into rural development spending, which will be boosted to 13.6 %.

The European structural funds together will see an increase of 5% and reach EUR 44.6 billion. Their core tasks are to enhance the growth potential of lagging regions and to increase employment opportunities. Added up, all these actions contribute to the goals of the Lisbon Strategy and account for at least one third of the budget.

To come back to the other main objectives of the budget, solidarity and security, the Commission proposal foresees measures to improve social and environmental security, ensure fundamental rights and promote active citizenship, especially for young people. The fight against terrorism, improving food and transport safety, and security of energy supply are also among the priority measures, for which the preliminary draft budget proposes an increase of 5%.

To conclude on internal policies, I would like to stress that the Commission’s proposal leaves enough margin for the budget authorities, and in particular Parliament, to increase the budget for those programmes which it considers necessary. But these increases will have to be discussed with the Council. The Commission is, of course, ready to help and support this initiative.

The next priority is to make enlargement a success. The further phasing-in of the new Member States is reflected in all the internal headings, with particularly sharp increases in structural – up to 30% – and rural development policies – up to 9%. On the administrative side, this phasing-in is also reflected in the request for 700 new posts.

For candidate countries, the Commission proposes to budget only the amounts that have already been endorsed for the respective pre-accession strategies. To support these pre-accession strategies, the Commission is also requesting 100 new external personnel positions.

In the external relations field, accommodating the new 2006 priorities while at the same time ensuring the continuity of ongoing cooperation programmes is not possible within the predetermined ceiling. That is why the Commission proposes recourse to the flexibility instrument for the major part of the reconstruction aid for Asia. We would like to emphasise that, for the fifth time in seven years, the ceiling fixed in Berlin will not be sufficient.

I now turn to the global figures of the 2006 budget. The Commission’s proposal refers to amounts of EUR 112.6 billion in payments and EUR 121.3 billion in commitments. The respective increases are 6% and 4%. That represents 1.02% of the European Union’s GNI in payments and 1.09% of the European Union’s GNI in commitments.

Bearing in mind the ongoing negotiations on the future financial perspective, I would like to point out that the Commission is asking for what is necessary and sufficient at this stage to finance the Union’s policies in 2006. It should be kept in mind that today we are talking about the annual budget. This preliminary draft budget for 2006, which already represents 1.02 % of the EU’s GNI in payments, does not take account of the needs of future enlargement to Bulgaria and Romania, or of the complete integration of new Member States, in particular in relation to the agriculture and cohesion policies that have already been decided upon, nor, of course, does it take account of increased investment in growth and jobs, as required under the relaunched Lisbon Agenda.

I am sure that this is going to be an important year for all of us and I can assure you that the Commission will strive to help the budget authorities to reach a good agreement on the 2006 budget for the Union and its citizens.

  Giovanni Pittella (PSE), rapporteur. – (IT) Mr President, ladies and gentlemen, my hope is that the comparison that will follow from this evening’s presentation may bring about a favourable outcome. I hope that this year will be a positive one; however, in truth, the initial signs are only partially encouraging.

It is with pleasure that I acknowledge the work of Mrs Grybauskaité, in whose draft budget can be found positive solutions to certain issues that Parliament holds dear, and which appear in its guidelines. I am referring to the modulation of agricultural expenditure in support of rural development, to the increase in heading 2 on regional policy, to the rise in spending on young people and on culture, and to the increase in spending on agencies.

I cannot say the same for heading 4 on external actions and assistance to SMEs. Mrs Grybauskaité informed us that direct assistance in the Lisbon Strategy accounts for more than a third of the draft budget. We will check it heading by heading, but on first examination it appears to me that the amounts are insufficient. Even if that assessment were incorrect, however, the reference to the agreement reached on sustainable development during the Gothenburg European Council is without question unsatisfactory: there can be no competitive growth without sustainable growth.

The proposal on external actions, moreover, seems disappointing. Without doubt, this is an old sore point, a painful wound that is reopened at every budgetary procedure; a more courageous approach, however, would have put the Council ahead of its responsibilities and would have gained the full support of Parliament.

In general, we were expecting greater impetus, but our stance will, however, be constructive. It is not in our interests to list expenditure, but to defend the rights of Parliament and of the European Union.

  Janusz Lewandowski (PPE-DE), Chairman of the Committee on Budgets. – (PL) Mr President, Commissioner, it would seem that the many Members who are absent consider today’s presentation to be merely a routine procedure. Yet this is by no means the case for myself or for the Commissioner, who can even understand me when I speak Polish.

What is so special about 2006? Firstly, it is the final year of the current Financial Perspective. This means that new and expensive tasks have appeared that did not feature in our earlier plans, and as a result funding will be tight, especially under the third and fourth headings. We will inevitably have to reach additional agreements with the presidency, which by then will be British.

Secondly, 2006 is a transitional period towards the new Financial Perspective. As such, it presents us with a problem regarding the level of payments, which is nearly EUR 7 billion lower than the ceiling for payments as a percentage of GNI set in the Financial Perspective, and lower than the 2005 level of 1.03%. We should give careful thought to the extent to which this will meet our real needs in 2006.

Although some features of the 2006 budget are familiar from previous years, there are some new priorities. These include an attempt to reinvigorate the Lisbon Strategy by means of a new injection of funds. According to the Commissioner, funding for this Strategy will increase by 8%, which will mean cuts to other areas of expenditure under the third heading. I would add that increased funding cannot be a substitute for the genuine reforms that are the essence of the Lisbon Strategy. Another new priority relates to a number of challenges we face in terms of foreign policy. Above all, these involve the reconstruction of countries devastated by the tsunami disaster, and the provision of EU support for the awakening of democracy and civil society that is taking place beyond our eastern border. There can be no question that this priority will make it necessary to use the flexibility instrument. Another priority that has been added by our rapporteur is youth, and this will be the distinguishing feature of Parliament’s budgetary strategy in 2006.

I have already emphasised the strong links that exist between the negotiations on the annual budget and those on the multi-annual Financial Perspective. It is quite clear that it will be easier for us to negotiate the 2006 budget with the British presidency, and that these negotiations will be conducted in a friendlier atmosphere, if the Luxembourg presidency succeeds in concluding negotiations on the multi-annual Financial Perspective. I have no idea whether this is a realistic aim, but I believe that it should be one we all share.

  President. I understand that the physical preliminary draft budget is with committee secretariat, but that other copies will be available later this week.

The item is closed.