Verbatim report of proceedings

Wednesday, 28 March 2007 - Brussels

17. The future of the European Union's own resources (debate)

  President. The next item is the report by Alain Lamassoure, on behalf of the Committee on Budgets, on the future of the European Union’s own resources (2006/2205(INI)) (A6-0066/2007).

Unfortunately, I am told that the rapporteur cannot be with us tonight owing to family reasons. Mr Böge will be replacing him.

  Reimer Böge (PPE-DE), deputising for the rapporteur. – (DE) Madam President, before I start, I should like on behalf of the Committee on Budgets – and please do not include this in my speaking time – to express our displeasure at the fact that we are so far behind our published timetable. As a result, Mr Lamassoure can no longer be present for the reasons stated. I would therefore ask you to bear with me, because I have only just been informed that I will have to read out his speech in the original version, that is in French. The booths each have a copy. That is why five minutes will be rather tight, because French is unfortunately only my third foreign language.

(FR) Madam President, ladies and gentlemen, the report on the future of own resources is very important. Your Committee on Budgets has adopted an original political approach. The report submitted to Parliament is an initial progress report.

Firstly, the subject is a major one: behind the political crisis, the Union is going through an equally serious budgetary crisis. The agreement on the financial perspective could only be reached at the price of the Community budget’s stagnating. The budget provides funding for the CAP and aid for the new Member States, but does not, for instance, allow funding for the transport networks or Galileo and allows virtually nothing at all for the Common Foreign and Security Policy.

We recently celebrated the 50th anniversary of the Treaty of Rome. We rejoiced over the successes of the Union, an ever closer Union that was launched by the Treaty. Let us have the courage to recognise that, in budgetary matters, for the last 50 years the Union has become less and less ‘close’: budgetary solidarity has not increased; it has actually decreased overall. Ten years ago, the European budget represented 1.17% of GDP, whereas today, the 2007 budget accounts for scarcely 0.99%.

The first Treaties laid down the principle of funding Community expenditure with Community resources, that is to say, with fiscal resources directly allocated to the Union: either national resources such as customs duties, or even a genuine European tax, for example a tax on the turnover of steel and coal undertakings in the context of the ECSC.

Certain of my fellow Members who are very concerned about national sovereignty seem to have completely forgotten that the Treaties to which they adhered, sometimes after a referendum, precisely included a European tax. However, this tax no longer exists; it has not been revived, and customs duties now yield only 10% of the Union’s resources. These days, the bulk of these resources comes from contributions from the national budgets, and that is the reason for the Community funding crisis. The only way to resolve it is to return to the spirit and the letter of the Treaty of Rome, and to do so by relieving the national budgets and by funding Community expenditure with new fiscal resources directly allocated to the cover of this expenditure.

Conscious as they are of the problem, the European leaders have arranged to meet in 2008-2009 in order to re-open the entire dossier on the European budget, the resources heading and the expenditure heading being merged together. This commitment is specifically stated in the agreement on the financial perspective.

Next comes the political approach, which is original. In view of the extremely sensitive nature of the issue, the Committee on Budgets proposed to involve the national parliaments’ finance committees, and to do so from the start of our work. In two years, we held four joint meetings, and the rapporteur travelled to the capital cities of half of the Member States. The aim is not for an agreement to be reached between all of the parliaments. This would be neither legally nor politically possible. Furthermore, no procedure exists to allow the national parliaments to give an opinion, but we can prepare the ground for the Commission and the Council, clear up any misunderstandings, take note of any points of agreement and common political approaches, and come to an agreement on initiatives to be excluded or to be looked into further.

Today’s report is therefore a progress report, which aims at taking stock of the subjects on which there is a fairly broad consensus with the interlocutors appointed as delegates to us by the national parliaments. This consensus takes three forms: consensus on the diagnosis of the weaknesses of the current system, consensus on the political direction of a reform and consensus on the content of a first phase, which could begin fairly quickly and which would consist, first and foremost, in simplifying the current system. Thus, instead of obeying rules that have become infinitely complex over the years, contributions from national budgets would be calculated simply on the basis of GDP.

However, there is still no consensus on the urgency and content of a second phase. As far as we are concerned, this second phase is crucial. It would consist in selecting, among the existing fiscal resources, those that could gradually take the place of national contributions without increasing the burden on taxpayers. At this stage, the progress report merely lists taxes that could be used for this allocation, without making any recommendation. That will be the aim of a second report, which I shall submit at the end of the year, following a final interparliamentary conference devoted to this issue that the Portuguese Presidency has announced for 4 and 5 November.

(Applause)

  President. Thank you very much Mr Böge. I think our colleagues’ applause says it all.

  Mariann Fischer Boel, Member of the Commission. Madam President, ladies and gentlemen, on behalf of the Commission I would like to thank the Committee on Budgets and its standing rapporteur, Alain Lamassoure, for the impressive work carried out with this report on a particularly sensitive topic. I can join in the applause for Mr Böge on his excellent presentation.

I would also like to stress that, in line with the interinstitutional position of 17 May 2006, and as part of the consultation and reflection process leading up to the establishment of the review, the Commission undertakes to draw on the in-depth exchange of views that it will conduct with Parliament when analysing this situation. Therefore, I welcome today’s debate.

  Elisa Ferreira (PSE), draftsman of the opinion of the Committee on Economic and Monetary Affairs. – (PT) The current system is unfair and incomprehensible to the citizens. This was the conclusion reached, too, by the Committee on Economic and Monetary Affairs. A review is needed and I therefore welcome this own-initiative report and commend the rapporteur on his outstanding report.

Europe must be given adequate resources to implement its strategic objectives and in particular the Lisbon Strategy and social and territorial cohesion. The time has come to abandon the juste retour [fair return] strategy, which destroys the essence of the common budget and disregards the gains of the internal market by not acknowledging them in the budget.

It is also clear that the debate on revenue requires a reappraisal of expenditure priorities. It is too early to debate specific new sources of revenue and timeframes. Guarantees must be given, however, that they will be progressive and transparent, and will not increase the tax burden on the citizens.

Parliament has demonstrated today that it wants to – and is able to – play a key role in this process. This must be continued for the benefit of Europe and its citizens.

  Gerardo Galeote (PPE-DE), draftsman of the opinion of the Committee on Regional Development. – (ES) I would like firstly to congratulate Mr Böge on his excellent French, of which I am very envious, and also, of course, the rapporteur, Mr Lamassoure, on his efforts to stimulate a crucial debate. We will see later whether the other Community institutions have the courage to tackle it.

I believe that almost all of us share the report’s fundamental objectives: a European system that is comprehensible to the citizens and which does not increase fiscal pressure, of course. Nevertheless, I would like to focus on one of the Committee on Regional Development's priority demands, which is that solidarity should remain the fundamental pillar of European integration, particularly following the latest enlargements.

Economic, social and territorial cohesion requires a fair and balanced system of funding which takes account, on the one hand, of relative prosperity, and, on the other, of the Member States’ contribution capacity. That requires that we eliminate the regressive elements of the current system, that the rebates received from the Community budget by the most prosperous countries be removed, and that, as the report proposes, the future of own resources be based on the criteria of equity and progressiveness.

The benefits of European policies, Madam President, cannot be measured in terms of calculations of net balances that do not take account, for example, of inter-Community trade balances. Finally, I believe that the central element of future European funding must be contributions according to the gross national product of the Member States.

  Carlos Carnero González (PSE), draftsman of the opinion of the Committee on Constitutional Affairs. – (ES) We all agree that our objective should be a more efficient and democratic European Union, and to that end we need two instruments: the Constitution, which is in the process of being ratified, and the material resources to achieve our objectives.

Our resources are neither sufficient nor transparent, and the current situation is not therefore sustainable. It is true that the European Constitution establishes a new balance in which the European Parliament has more powers as a budgetary authority, but it still does not acquire those powers with regard to own resources. Although that balance may seem acceptable today, in the future this House must be able to legislate on those own resources, on the basis of two factors: firstly, a direct relationship between the citizens and resources; secondly, putting an end to exceptions, rebates and cheques.

If the Lamassoure report moves in that direction, as I believe it does, we in the Committee on Constitutional Affairs will be working, on this occasion and on the future text, in the same direction.

  Salvador Garriga Polledo, on behalf of the PPE-DE Group. – (ES) It is a shame that our rapporteur, Mr Lamassoure, cannot be here for the debate on this important own-initiative report, and it is a real shame that our parliamentary work should begin an hour and a half late, because that means that we all suffer.

In any event, the Group of the European People’s Party (Christian Democrats) and European Democrats will support Mr Lamassoure’s report, for one reason in particular: the last agreement on the financial perspective showed that the system is insufficient. This is in spite of the fact that Mr Lamassoure himself tells us in paragraph 10 that if the Council had conformed to the Edinburgh Declaration of 1992, applying 1.24% of the European Union's gross domestic product to the Community budget, we would have had EUR 240 billion more, which would have been sufficient to fund much more ambitious Community policies over these years, which would have been much more effective for each of the Member States.

The Edinburgh Decision of 1992 therefore contained the solutions that the Member States were then unable to adopt, and Mr Lamassoure himself says that.

We must therefore seek the greatest possible Community budget and not just establish new own resources – which the Lamassoure report will deal with in the second phase and the need for which we entirely accept – but we must also, as the rapporteur states very clearly, establish a direct link between own resources and the policies to be funded, that is to say, spending, but on the basis of one fundamental idea, Madam President: solidarity. This means that the beneficiaries of the Structural Funds and the beneficiaries of agricultural subsidies should not pay for the insufficiencies that the Member States impose on us.

  Catherine Guy-Quint, on behalf of the PSE Group. – (FR) Madam President, ladies and gentlemen, the own-initiative report that we are debating today relates to an area that is crucially important for the future of the Union – that of its resources. When we talk about the Union’s resources, we are talking about its means of subsistence, but above all, we are talking about its means of undertaking tasks and of producing public policies. We are talking about the continuation of the European idea and of the innovative policies that Europe alone makes it possible for us to carry out.

The aim of the Socialist Group in the European Parliament is to achieve these two ambitious objectives: the continuation of the European project and political and economic innovation. The crucial thing, for Parliament, is to show the Member States that the Europe of projects, the Europe of sharing and of solidarity, is possible. This means that we cannot insist on our national advantages. It means adopting a responsible parliamentary proposal in the hope that the Council will move in the direction of a transparent, fair and effective system. The fact is, the Union’s resources, at present, really need to be simplified. This complex system has become incomprehensible to the citizens and the European decision-makers. It is an unfair and inappropriate system.

Our work, done in cooperation with the national parliaments, has convinced us that the introduction of a new budget for resources will take a long time and that it will have to take place in two stages. Currently, Community budgetary negotiations are just about a clash of national egos. An erroneous principle is being established here: the principle of fair return, which dismantles European solidarity and goes against our project. It is the poison of the European Community. The very notion of net balance should be destroyed.

Thanks to the rapporteur and to the amendments tabled by the Committee on Budgets, the text stresses the importance of abolishing, once and for all, all forms of compensation and of rebate mechanism. It is therefore logical to temporarily abolish the VAT resource, because, in its current form, it legitimises all cases in which a rebate is paid. We also confirm the options in the Böge report on the financial perspective. It is vital to link this reform of revenue to the reform of expenditure. In this context, cofinancing of the CAP may be considered, but without renationalisation.

We must first denounce the unfair system so that we can subsequently provide Europe with resources that are built on sound and fair foundations. Only then, when that is done, is Mr Lamassoure proposing to create a tax that could take various forms while preserving the Member States’ fiscal sovereignty. We support the idea of a consolidated tax, for example, corporation tax or environmental tax, as Jacques Delors was proposing as far back as 1991, or a tax on financial transactions, a tax on currency transactions.

In this report, we are not limiting the boundaries of what is possible. We are preparing for the second phase of our work. We are therefore acknowledging a nonsense system so that we can have done with it. With the exception of customs duties and certain agricultural taxes, the other receipts are not own resources.

To conclude, providing the Union with real resources means increasing Europe’s resource autonomy so that it is no longer subject to the blocking power of a given Member State. It also means making the budget consistent again. Whoever decides on expenditure must be responsible for revenue before the public. Finally, it means getting away from the idea of accounting returns which, for years, has been undermining all of our European projects and destroying the very idea of solidarity, on which Europe – the 50th anniversary of which we are celebrating – is based.

  Jan Mulder, on behalf of the ALDE Group. – (NL) Madam President, my compliments to the absent Mr Lamassoure and Mr Böge, his deputy, for their presentation. We all know what happened during the recent summit of 2005 and the events leading up to it. The bickering is not, to my mind, a dignified sight for Europe. We must find another way of resolving the issue of own resources, and the Lamassoure report certainly sets the right tone for this.

The large majority of the Group of the Alliance of Liberals and Democrats for Europe share the key conclusions of the Lamassoure report. We see Gross National Income as probably the best way of measuring national wealth and of calculating contributions based thereon. This, though, should not prevent us from examining other means at a later date and, as many have said before me, this should not lead to an increase in taxation, but we will need to use the existing taxes to provide Europe with some of the income.

We do not share the view that it is unfortunate that we did not use the 1.24% that was established in Edinburgh in 1992. So far, the Commission has had to overcome enough difficulty as it is to carry out the existing budget. Every year, so many billions are returned to the Member States that it is difficult to justify the logic that even more should be budgeted for and that even more should be spent.

Budgets must be calculated based on real needs, and so far, we have not reached this 1.24% ceiling. As chance would have it, the Commissioner responsible for agriculture is here this evening, and I can inform her that the ALDE Group takes the view that compulsory cofinancing of certain areas in agricultural spending is hugely beneficial to Europe and something we should definitely promote in future; who knows, she might even pick up an idea for her health check next year.

  Zbigniew Krzysztof Kuźmiuk, on behalf of the UEN Group. – (PL) Madam President, Commissioner, I would like to add a few points to the debate on the future of the European Union’s own resources.

Firstly, the present system of the Union’s own resources is not transparent and, more importantly, it is unfair. It was further complicated by the ‘Christmas presents’ handed out at the European Council’s session in Brussels in December 2005.

Secondly, this system shows that individual Member States are distinctly unwilling to fund policies from which they themselves gain little. The most telling example of this is the British rebate.

Thirdly, the proposed solution for creating a new own resources system, and the proposed new European tax in particular, is unacceptable on at least two grounds. Firstly, it would increase the tax burden for citizens and, secondly, it would also deprive Member States of some of their fiscal authority.

Fourthly, the claims contained in the report, which state that expenditure on the common agricultural policy is ineffective, are a cause of grave concern. The problem of food safety in the European Union is one of the cornerstones of its existence, and on these grounds alone spending on agriculture should not be questioned. The proposal for the re-nationalisation of the common agricultural policy is similarly unacceptable.

  Gérard Onesta, on behalf of the Verts/ALE Group. – (FR) Madam President, there were many people present in this Chamber earlier on: we were talking about the Berlin Declaration. However, it is this evening, in a far emptier Chamber, that we are perhaps going to give substance to this declaration, for if we think that we can build Europe without providing ourselves with the resources to do so, then we are not going to get very far. The fact is that, until now, budgetary resources relied on structures that worked with six countries but, with twenty-seven countries, have totally worn out. The great virtue of Mr Lamassoure’s report is that it denounces this in no uncertain terms. Funding, when it is nationalised to this extent, where every time we hand over a euro, we wrap it in a national flag and try to get back more than we have given, does not work. That being said, this denunciation is the aspect of the report that appeals to the Group of the Greens/European Free Alliance.

There are, on the other hand, things that are far less appealing to us. We do not understand why we are restricting ourselves when this is an own-initiative report. It is true that we would have liked to have found the term ‘European tax’. I am sure that we are in the majority, in this House, when we say that we must dare to use this term to replace this covert European tax: a pinch of VAT here, a small contribution there. We should have dared to include the term in this report. Moreover, why talk about a transitional period when we know very well what we should be aiming for? By going all out to cajole some people and to reassure others, we are taking all the strength out of this report, when the starting points were excellent.

I should like to make a final point, which is very important for our group: why handicap ourselves before the start of the race by setting the bar at 1.24%? Why this sacred cow before which Parliament, which has always denounced it, is meant to grovel? We know – and we are going to debate this next year, in 2008 – that this bar prevents European policies from being supported with genuine resources. Let us compare what our neighbours are doing: in the United States, they pool 20% of their GNP.

It is therefore clear that the Lamassoure report has unfortunately had to make pledges here and there, to the point of restricting itself. Our question is: how can we encourage Mr Lamassoure to move forward without having him fail? The best response that we have given, is to abstain.

  Esko Seppänen, on behalf of the GUE/NGL Group. – (FI) Madam President, the rapporteur, Mr Lamassoure, has made a correct evaluation: this is not the time for Member States to give up their sovereignty in fiscal matters. There are many flaws in the current system of own resources. There is no justification for the United Kingdom’s rebate. Nor are the special benefits obtained under its shadow by some other Member States at the 2005 summit justified. Attention is drawn quite rightly to the ‘Rotterdam effect’, the overcompensating 25% premium for collecting customs revenues. The system cannot be reformed without at the same time taking into account the allocation of Union expenditure and in particular Member State refunds in the form of agricultural subsidies. The cofinancing of agriculture is swept under the carpet in the report, and that is where it is sure to be found in the interim examination of the financial frameworks for 2007-2013. Then attention will need to be paid to these problems and they should not be resolved by giving the EU the power to levy taxes or by legislating a common European tax.

  Hélène Goudin, on behalf of the IND/DEM Group. – (SV) Madam President, the issue of introducing an EU tax has been raised because there are clearly those who believe that the EU has far too little money. There is a desire to solve this state of affairs by allowing the EU to take a tax directly from people’s pockets. Paragraph 6 of the report criticises the requirement that all Member States must be agreed where such issues are concerned. It must clearly be made possible to ride rough shod over countries that show reluctance. This is a regrettable position to adopt, especially from a democratic point of view.

The June List strongly objects to the EU taking a share of national taxes. The report has been written with a view to taking a further step towards the creation of an EU state with the right of taxation, a common foreign minister, common armed forces and a common currency. This is an awful thought. We have tabled an amendment in which we emphasise the Member States’ inviolable right of self-determination within the tax sphere. We believe that all the Member States would need to be in agreement before any form of EU taxation were introduced. This is in line with the views of the people in numerous Member States.

We Members of the European Parliament should follow the wishes of our electorate – that is to say respond to the views of our citizens – and act in accordance with these. I thus hope, ladies and gentlemen, that we shall clearly and unambiguously reject this reprehensible report in tomorrow’s vote.

  Petre Popeangă, în numele grupului ITS. – Raportul Lamassoure, excelent prezentat de domnul Böge, este o continuare logică a demersurilor anterioare în acest deosebit de seducător domeniu al reformării sistemului resurselor financiare proprii Uniunii Europene.

Demersul este, cel puţin în plan teoretic, deosebit de interesant, motivat de faptul că, pornind de la realitatea insuficienţelor actualului sistem de finanţare a bugetului Uniunii Europene, prezintă o foarte curajoasă propunere de reformare a acestuia. Am limitat aprecierea la planul teoriei, deoarece consider că în stadiul actual de dezvoltare economică diferită a statelor membre, adoptarea unui sistem de finanţare bazat în întregime pe surse de natură fiscală, nu mi se pare total realistă.

Fără a nega necesitatea reformei, mult mai pragmatică mi s-ar părea o abordare progresivă a acestei acţiuni, bazată pe menţinerea resursei tradiţionale, descrescătoare în timp, dublată de resurse de natură fiscală în pondere crescătoare. Menţionez, de asemenea, că propunerea privind extinderea principiului adiţionalităţii asupra unor politici a căror implementare antrenează resurse consistente de la bugetul comunitar, este puternic defavorabilă statelor membre mai puţin dezvoltate, precum România, deoarece antrenează în mod automat cofinanţări de la bugetul naţional în detrimentul finanţării propriilor programe.

În sfârşit, dintre mai multe observaţii pe care le am în legătură cu modificarea sistemului resurselor proprii, propusă de autori pentru etapa a doua a reformei, o să mă opresc doar la două: cea privind posibila alegere a TVA ca sursă proprie a bugetului Uniunii, acţiune pe care o apreciez ca fiind complicată, chiar în condiţiile înscrierii în documente a cotei-părţi destinate bugetului comunitar şi, de asemenea, cea privind impozitul pe profit, datorită faptului că în această materie nu există armonizare legislativă necesară, fiecare stat membru având în prezent reglementări proprii, fapt ce face ca această resursă să fie, cel puţin deocamdată, de neluat în considerare.

  Hans-Peter Martin (NI). – (DE) Madam President, I am looking into the eyes of a man, Mr Böge, whom I and many others consider to be highly intelligent, and there are also a few others here in the room whom we certainly know can add one and one together. Then I look at this report and think: what happened to you? How incredibly unrealistic is that? As an academic discourse it may have its value, but for that alone we would not need this Chamber here.

Who on earth buys a product if they are not convinced that it is worth the money? Surely we first need to correct and summarise what the EU is doing – and above all what it is not doing – and then quickly set about ensuring that these activities are funded at the right level: agriculture, the Cohesion Fund, the continuation of so many funds and programmes that actually ought to be able to take care of themselves by now. Surely that is where we need to start.

I consider the proposal – which also comes from your country, I think even from your group, Mr Böge – namely to see whether in some areas we really do simply have only net payments, to be sensible, because it makes control possible. If there is still not enough and we need own resources then there is much that can be discussed, but not on such false premises as is currently the case.

Incidentally, I believe that we urgently need less bureaucracy and more democracy, in this case in particular.

  Richard James Ashworth (PPE-DE). – Madam President, in principle the objective of making the own-resource system simpler, more transparent and easier for citizens to understand has to be welcomed. I compliment Alain Lamassoure on the work that he has done to stimulate this debate and to highlight the need for change.

I agree with him that the current VAT-based element is too complex and is in need of change. However, in respect of the other traditional own resources, we see no justification for change. We think that a funding system based on a GNI is both logical and fair, and we are happy to support that system. We do not accept, however, that this resource should become a genuine own resource. Quite the contrary. We see merit in a healthy debate between the Member States as paymasters and the Commission as servant. This sends a very clear message to the public that the EU is not a self-sustaining institution but that it is there to help the Member States achieve their mutual goals.

We also welcome the opportunity to review the common agricultural policy. Inevitably, this is a complex exercise because a reformed CAP must be able to help the new Member States to develop their agricultural base, while allowing the EU-15 to transfer funding to those environmental elements with popular support and reducing the overall cost to the Community.

I agree, therefore, with the principle of compulsory co-financing. It is the most logical approach to reforming the expenditure side and, as the report points out, it offers the potential to eliminate the need for abatements.

However, I stress again that this will be a complex negotiation and surely better suited to the budgetary review already scheduled for 2008-9. For these reasons, I shall vote against the report.

  Jutta Haug (PSE). – (DE) Madam President, Commissioner, ladies and gentlemen, today we are once again debating the future of the own resources. At present we are actually only doing so for the record. The Commissioner responsible is not here, the Council benches are completely empty and the only people that I can see here are the Members with whom I have already spent many hours in the Committee on Budgets discussing Mr Lamassoure’s interim report. We have once again rehearsed all of the arguments that we put forward in 1990, 1994, 2001 and 2005 as the essential points to be considered in a reform of the own resources system. We want a simpler system than the one that we have at present. We want more justice, more equality amongst the Member States, including on the revenue side – no more exceptions please – and we want greater transparency on the revenue side of the budget: transparency for all of Parliament’s Members, for the Members of the Council and above all for all of our citizens. Surely it cannot be so difficult for the Council to endorse these demands itself. We cannot keep getting up on our infamous soapboxes but not move a step closer to our citizens. In addition, of course, this does not make it any easier for the public to understand the European Union’s budget. This is also about being more democratic.

The European Parliament, which represents the peoples of Europe, can only help to determine the European Union’s expenditure, but not its revenue. This leads to the rather abstruse situation of the Council denying us our share of responsibility, but at the same time defaming Parliament as a spendthrift parliament, saying that it can only be in favour of increasing expenditure because it is not responsible for revenue and therefore does not have to justify it either. That is not true, some of you will say, but it is! I have experienced it firsthand. Within the space of half an hour both statements came out of one and the same mouth of one and the same finance minister.

Parliament is always willing to negotiate on this. We have never been bent on getting our own way regardless. Mr Lamassoure has proved this once again now in his charming way with his very moderate proposal for a two-stage reform of the own resources system. We support him in almost every respect, including in his desire not to encroach on national fiscal sovereignty at present by calling for a European tax. He also – I am happy to admit – has my own personal support, I who have repeatedly said ever since I have been in Parliament: no representation without taxation. As you can see, the European Parliament has already given ground, even before negotiations with the Council have begun. We now expect to see some movement from the Council in the run-up to the jointly agreed revision. The Council should at long last show some cooperation.

  Gérard Deprez (ALDE). – (FR) Madam President, ladies and gentlemen, I should like to signal my consent, overall, to the excellent report by our fellow Member, Mr Lamassoure, who is being represented outstandingly well by our fellow Member, Mr Böge.

Firstly, I support the method used. Our rapporteur has correctly understood that the reform of the Union’s funding cannot take place without the agreement of the Member States – in other words, without the consent of the national parliaments. We must keep in contact with them because we must convince them.

Secondly, I support – and this is key – the structure of the report, which proposes a global reform, but one that is structured in two phases. A first, most urgent, phase aimed at purging the current system of all the pathologies that it has accumulated over the years. There would be an end to these little gifts between friends, an end to the rebates, the rebates on rebates, the exemptions, the ceilings and the pitiful bargaining. Purging, that is the priority. As for the second phase, we will have a chance to talk about that again later.

I should like to say one last thing, Madam President. The priority for us is the Constitutional Treaty. If this budgetary debate were to make this more difficult, we need to have the courage to postpone it.

  Pierre Jonckheer (Verts/ALE). – (FR) Madam President, Mr Böge, I believe that the exercise carried out by Mr Lamassoure and the Committee on Budgets is useful. We share his criticisms and we share – and have done so for a long time, I might add – the central idea of the need for a new system of own resources.

I, for my part, should like to express my bitter disappointment regarding, among others, paragraphs 28 et seq which, as I see it, are aimed at reassuring the population, but on the basis of false realism. False realism in terms of the claim that the Member States’ fiscal sovereignty should be retained when, in reality, this fiscal sovereignty does not exist because of the tax competition within the Union. False realism regarding tax neutrality, because this is going to create an additional constraint on the EU budget, when the Member States’ fiscal policies can be different and can develop over time. Finally, false realism regarding the order of magnitude of the budget.

On this subject, I am totally opposed to the argument put forward by Mr Mulder; no, we do not have enough money. No, we do not have enough money for Life+. No, we do not have enough money for foreign policy. No, we do not have enough money for education and research policy. And no, we do not have enough money for the trans-European networks. This was one of Parliament’s positions, and I do not understand how, in an own-initiative report, we are taking a step backwards.

  Jeffrey Titford (IND/DEM). – Madam President, a good subtitle for this report would be ‘the thin end of the wedge’. I am always suspicious of EU reports which state that they respect principles, in this case full respect for the fiscal sovereignty of the Member States. This is usually a prelude to exactly the opposite happening. This report, despite stating the aforementioned key principle, promptly goes on to equivocate by stating that Member States might nevertheless authorise the Union, for a limited period, revocable at any time, to benefit directly from a share of a tax.

In other words, the European Commission is attempting to establish the principle of the EU taking taxation directly from taxpayers in the Member States. This is an enormously dangerous precedent to set and is made all the more worse by yesterday’s revelations about the Commission being raided by the police, with simultaneous raids in various countries.

I have been taken to task before for using the word ‘fraud’ in this Chamber. However, it is clear that the police think the word is justified.

This report also calls for the gradual abolition of the British rebate, something which I am completely opposed to and will fight to the end to prevent. GBP 40 million a day is enough. Britain cannot be expected to pay any more into the EU’s leaking financial system.

  Sergej Kozlík (NI). – (SK) There is no such thing as the ‘own’ and ‘non-own’ resources of the European Union. There is the money of Europe’s taxpayers and the more or less sophisticated schemes of allocating that money to the European Union’s budget, something in which EU citizens take no interest at all.

What citizens are keen about is the way in which such resources are used. Doubts about how efficiently this is done are expressed not only by them but also by us, sitting on these benches. Unless we can first resolve the problem of how to use the budgetary resources of the European Union efficiently and credibly, there is no form of providing resources to cover expenses that will be sufficiently transparent in the eyes of Europe’s taxpayers.

The conventional accounting formula of ‘accounts payable – amounts paid’ will then be replaced by ‘accounts payable – amounts reluctantly paid’, something we are witnessing now. The debate about the future of our ‘own’ resources is undoubtedly to be welcomed; however, the problem is closely linked to the reform of EU expenditures.

  Valdis Dombrovskis (PPE-DE). – (LV) Madam President, ladies and gentlemen, the EU budget’s own-resources system has changed considerably since it was introduced in 1970. The role of traditional own resources and VAT own resources within EU budget revenue has gradually reduced, while the role of GNI own resources has significantly increased. This resource, which could almost be described as an extra own resource, now forms about 75% of the European Union’s budget revenue. Although the predominance of GNI own resources ensures that the Member States’ liability to pay corresponds to their relative levels of prosperity, nonetheless it makes the funding of the EU budget considerably more difficult. Instead, in order to focus on the priority issues that can be resolved in the European Union, the Member States spend most of their time haggling about their contribution levels.

To a large extent, the results of this haggling determine the level of funding of the EU budget, frequently ignoring the undertakings previously made by the Member States themselves. As a result, the EU budget is growing significantly more slowly than the Member States’ budgets, and many important priorities for the European Union as a whole are suffering from insufficient funding. In implementing a reform of the EU own-resources system, it is important to ensure a sufficient annual increase in EU budget revenue. This increase ought to be proportional to the growth in the EU economy, and ought to automatically derive from the structure of the own resources system, instead of being the result of haggling between the Member States. Such a structure, of course, does not call into question the existing own-resources ceiling of 1.24% of the European Union’s gross national income appropriations. This is an important principle, which ought to be stressed alongside the other principles of equality and solidarity between Member States, and a simple system that can be understood by EU residents. On the subject of specific solutions that would increase EU budget revenue, a greater proportion could accrue, for example, to VAT own resources, if a specified part of VAT revenue were channelled into the EU budget. It is important for the burden of payments to be distributed fairly, that is, in proportion to the Member States’ levels of prosperity. Consumption of energy resources or natural resources is not directly proportional to prosperity levels, and so environmental and energy resources taxes are not suitable for the EU own-resources system. Cars in poorer EU Member States do not consume less fuel than in richer countries. Actually, it is highly probable that they consume more fuel, being older cars. As a result, the burden of payment on less developed Member States would be disproportionately high. Thank you.

  Neena Gill (PSE). – Madam President, I thank the rapporteur for his cooperation. He has made a comprehensive and fair assessment of the current situation and opened the door for discussions on possible future solutions.

However, I feel we are presenting Parliament’s views too soon. They are just an initial contribution to the debate, because 2008 is an opportunity for us to fully revise the budget. We need to find a system that is transparent and understandable and based on equality and fairness between Member States. It should reflect the priorities and ambitions of our progressive and successful EU of tomorrow.

I very much welcome the report’s crucial emphasis on the link between expenditure and income and the need to address both matters simultaneously if real progress is to be made in revising the EU budget. It is also important to recognise that the own resources issue is not just about the UK rebate. That is an overly simplistic and erroneous view that is unhelpful in taking discussions forward in a meaningful and constructive direction.

Finally, I welcome the fact that the rapporteur recognises that the idea of any new EU tax would not be practical or popular. This demonstrates that Parliament has taken on board the views of national parliamentarians as expressed during our extensive consultations.

  Kyösti Virrankoski (ALDE). – (FI) Madam President, the rapporteur, Mr Lamassoure, has drafted a very creditable report on the EU’s own resources, for which I thank him sincerely. The report calls for a clear, transparent and equitable system of own resources. There are good reasons for this. The present system is complex and hard to comprehend. There would be a clear ceiling set for own resources: 1.24% of GNI. This is the most effective guarantee that resources will not spiral out of control. Thus no source of revenue earmarked for the EU could go beyond the ceiling which budgetary agreements in general reduce even further.

The biggest flaw in the current system is the British rebate. The Member State I represent, for example, one which is poorer in natural resources and generates less income nationally, has to pay some EUR 130 million a year to cover this refund. That sum is the equivalent of the operational costs of one medium-sized university. In my opinion, each Member State should bear its responsibility, because EU benefits cannot just be measured in terms of revenue from the budget but in terms of the multiple and overall effects of the single market and the political Community.

  José Albino Silva Peneda (PPE-DE). – (PT) Mr President, ladies and gentlemen, I feel that the current system of funding the EU has run its course. It is my firm belief that, should we continue with the current system, it will be very difficult to define another financial framework to be in force after 2013, and the citizens will feel increasingly distant from the European institutions. This is because the system is based on rules – some of which are the result of a particular set of political circumstances and as such were originally temporary but became permanent – that are so opaque it is difficult for the average citizen to understand. If we retain the current system, I feel we will be heading towards the destruction of the essential values that have characterised the EU’s success in recent decades.

In an exercise verging on humiliation, we discuss who is and is not a net contributor on a case-by-case basis. I therefore warmly welcome the Lamassoure report, which lucidly, prudently and with foresight, puts forward principles, recommendations and methodologies that I consider appropriate. I should like, however, to draw special attention to the fact that this reform is not exclusive to the financial field. The reform in question is far-reaching and essentially political, and the debate must not therefore be confined exclusively to Parliament and to the Council, and less still to ECOFIN.

One of the essential prerequisites for the success of this reform concerns the participation of all the institutions – both European and national – throughout the process. I should therefore like to offer a final word of praise for the proposed methodology, which places the emphasis on, and encourages, the participation of the national parliaments.

IN THE CHAIR: MR DOS SANTOS
Vice-President

  Göran Färm (PSE). – (SV) Mr President, the funding of the EU budget has been chaotic. It is only a handful of experts who understand how the system works. One thing we do know, however, is that it is short-sighted and unfair. There are therefore strong reasons for reforming it in the direction of fairness, transparency and far-sightedness.

Mr Lamassoure has produced an important report, with which we Swedish Social Democrats substantially agree. In particular, we wish, just like Mr Lamassoure, to find a simple, straightforward and fairer form of funding, such as a GNI-based system without rebates. We do not, however, wish to give the EU the right of taxation or now to compromise the sovereignty of the Member States on tax matters. For me, what specifically characterises the EU is its being able to combine fundamental national sovereignty with the ability to be able in certain areas to combine forces in order to solve cross-border social problems.

To create a genuine EU tax would be to anticipate events. If we are ever to go down that route, conviction as to the advantage of doing so must come from below, that is to say from the citizens and the Member States. We are not at present in that position. I am pleased that we in the Socialist Group in the European Parliament have made good progress towards a more common view closely approximating to Mr Lamassoure’s approach. We are thus in broad agreement in Parliament, and that may be very important in terms of the future.

  László Surján (PPE-DE). – (HU) The Hungarian Christian Democrats support this report. Allow me to respond to what has been said in the debate. The report before us does not make a decision regarding the size of the budget, nor does it wish to introduce a European tax, but simply thinks through its possibility and potential consequences.

We are in no way debating this question too early, but rather too late! The reform is long in coming because breaking down the delicate balance of exceptions offends the interests of all those who by means of one or another momentary bargain were able to assert their own specific needs. We need to move beyond this.

Mr Lamassoure’s excellent proposal seeks to establish order and a fairer distribution of the burden instead of the present chaos. By adopting it, we would show that we would like a stronger, more effective European Union and one that is more transparent to its citizens.

  Herbert Bösch (PSE). – (DE) Mr President, earlier on someone mentioned the link between the new constitution and the debate that we are currently having. Whoever pays the piper calls the tune, so the saying goes. In the past we have seen that a Union that still only receives between 85% and 90% of its funding from national contributions is stumped. We know that and that is why we need more European own resources. Anyone who says that we could carry on as we have been doing with this system, improving things, increasing integration, taking on more policies, is deceiving the electorate. That is why I believe that in future we will have to draft rather more emphatic reports.

I think that Mr Lamassoure has done a good job. Who, though, is going to have the bottle to say things that may not be to every tabloid’s liking? We need more own resources: that also means that we need to have the courage to have European taxes. Ideas may diverge here; various different starting points may be advocated. The Commission has already made a few reasonable proposals. My support for this report is only half-hearted, because we need more European own resources to ensure that the work of European integration does indeed have a future.

  Monica Maria Iacob-Ridzi (PPE-DE). – Domnule Preşedinte, doamnelor şi domnilor, doresc să îl felicit şi eu pe domnul Lamassoure pentru munca sa, chiar dacă nu este prezent, şi mai ales pentru dialogul său permanent cu parlamentele naţionale. Mă bucură mult faptul că acest raport a inclus ideile lor, precum şi cele exprimate în Comisia pentru bugete, de către parlamentarii europeni din noile state membre.

În primul rând, trebuie să recunoaştem deficienţele sistemului actual de resurse bugetare, ce s-a vrut iniţial a fi unul de tranziţie. Este un sistem opac, complex, dificil de explicat cetăţenilor Uniunii, unde fiecare stat are propriul său rabat britanic şi propria sa excepţie. Poate cel mai mare inconvenient este faptul că numai 15% din resursele bugetare sunt veritabil europene. Este o situaţie inacceptabilă. O perioadă de tranziţie este necesară; eliminarea, în primă fază, a resursei calculate din TVA şi înlocuirea ei cu contribuţii naţionale este un pas înainte. Acest lucru reduce complexitatea actuală şi face mai uşoară trecerea la a doua fază, a resurselor europene veritabile.

În etapa a doua, din punctul de vedere al României, este preferabilă alegerea unui impozit simplu, care să nu crească presiunea fiscală asupra cetăţenilor europeni, sau să permită unor state membre să beneficieze de compensări injuste.

  Szabolcs Fazakas (PSE). – (HU) As we may note from Mr Lamassoure’s report as well as from the responses to it, the European Parliament stands before a historic opportunity, since thanks to the interinstitutional agreement, it can play a decisive role in the budget reform process not only in determining expenditures but at last in creating its own resources.

The often petty, undignified arguments over the elaboration of the 2007-2013 financial period have confirmed that we need income sources that are transparent and that can be calculated for the long-term, so that we might be able to bring balanced decisions.

The European Parliament has used this opportunity in an exemplary fashion. We did not rely only on our own strengths, but involved the national parliaments in the task, and organised many joint meetings and consultations. At first, based on their domestic political problems, the national parliaments were interested mainly in shorter term solutions, but they have now come to recognise that long-term thinking is required, and that we need to cooperate in order to find a solution that points to the future and serves the future of all of Europe.

  Mariann Fischer Boel, Member of the Commission. Mr President, the Commission shares Parliament’s view that the current own-resources system is not optimal. The Commission has repeatedly indicated its willingness to explore different options which could improve and simplify the current financing system. The Commission takes note of the fact that the current report is a first basis on which Parliament will pursue the examination of possible options in future, in close cooperation with the national parliaments, before adopting its final position.

The Commission will consider the outcome of any interparliamentary conference as a contribution in the context of the consultation process.

The Commission recalls that, as explicitly indicated in the declaration annexed to the interinstitutional agreement on budgetary discipline and sound financial management from May 2006 – as I mentioned previously – its proposal will be put forward under its own responsibility.

  President. The debate is closed.

The vote will take place tomorrow at 11.00 a.m.

Written Statements (Rule 142)

  Richard Corbett (PSE) , in writing. – Whilst I welcome the efforts that have gone into some early blue-sky thinking on the future sources of revenue of the European Union, and whilst I appreciate the explicit link made to the need to reform in parallel the expenditure side, I have my doubts about some aspects of this report. There is still too much focus on the one issue of the British rebate without recognising that this is not itself an anomaly but is the correction to an anomaly.

There is also a strong implication in the report that the GNI-based resource is not really an ‘own resource’ of the Union, as it is not a tax on individuals but on Member States and is therefore less visible to citizens. Yet it is, legally, a resource due to the Union. Although it is less visible, it is, on the other hand, more equitable than many of the other suggested sources of revenue as it is tied to the level of prosperity in Member States. It is also a more stable source of revenue than some of the others that have been suggested. It should be kept!

  Nathalie Griesbeck (ALDE), in writing. – (FR) This report, which explores all of the possible opportunities for a two-phase reform, is a precious overview of the working hypotheses on the reform of the Union’s own resources. We need to take a close look at the revenue and expenditure headings, by emphasising economic, social, research and innovation policies, and to do so without denying the development opportunities that have been made possible over the last 50 years by the CAP. I hope that the agreements, founded as they are on fairness and solidarity among the Member States, will break with the rule of unanimity in fiscal matters.

Faced with the obvious disproportions between the Member States’ contributions to the EU budget effort, it is vital that we get straight down to implementing a reform of the own resources system that guarantees a contribution from each Member State totalling at least 1.24% of GNI. It is time to put a stop to the compensation system that has endured over time, creating unjustified advantages and indulgent gifts.

Europe, which we are continuing to integrate 50 years after the Treaty of Rome was signed, must draw its inspiration from the spirit of its founding fathers so that the funding of the Union regains a fairer, more transparent image in the eyes of our fellow citizens and embodies our efforts to promote solidarity in the interest of the common destiny to which we belong.

  Alexander Stubb (PPE-DE) , in writing. – (FI) First of all I wish to congratulate Alain Lamassoure for an excellent report. His is an excellent presentation of the flaws in the current system.

Put briefly, the present financing system is undemocratic. For a start, the citizens of the EU do not understand by how much and in what way the Union is funded.

Secondly, national parliaments are mere rubber stamps in negotiations on the budget. When governments have finished discussing the financial framework, not one national parliament throws it out.

Thirdly, the status of the European Parliament, a body which is elected in direct national elections, is at the very least peculiar in budget negotiations. The European Parliament is the world’s only parliament which decides on expenditure but not income.

As we know, the EU’s resources accumulate from levies on agriculture and sugar production, customs duties levied at external frontiers, VAT and Member State contributions based on GNP.

Attention is being paid to contributions. A sense of proportion is lost in these wretched budget talks. Each Member State calculates how much the Union costs it and how much it gets. The Union’s entire budget, however, is about just 1% of the whole region’s GNI.

The EU is thus turning into little more than a bookkeeping exercise. We forget that the EU is a project for peace. Viewed this way the EU is a cheap project. We need a financing system which supports the EU’s purpose.

That is why we should support Mr Lamassoure’s report.