Verbatim report of proceedings

Tuesday, 11 September 2012 - Strasbourg

15. Presentation by the Council of its position on the draft general budget - 2013 financial year (debate)

  President. – The next item is the presentation by the Council of its position on the draft general budget - 2013 financial year (2012/2719(RSP)).

  Andreas Mavroyiannis, President-in-Office of the Council. – Mr President, I am really honoured to present to you today the Council’s position on the draft budget of the European Union for the financial year 2013, which was adopted by the Council on 24 July 2012.

The Council is, of course, ready to work with both Parliament and the Commission during the next few weeks and months in order to secure agreement on a realistic and balanced budget for 2013. I am confident that we can achieve this if we cooperate closely. The Council is, for its part, ready to work constructively and in a spirit of compromise. The first budgetary trialogue, which took place on 9 July, was positive and encouraging.

Following discussions on the draft budget proposed by the Commission, the Council’s position on the draft budget for 2013 foresees an increase of 1.27% in commitment appropriations and 2.79% in payment appropriations as compared with the 2012 budget.

I would like to draw your attention to the three important points which underpin the Council’s position. Firstly, the Council decided to give priority to the programmes and actions of the EU budget which will help resolve the current economic crisis, support competitiveness and convergence, create employment opportunities and boost economic growth. Secondly, since 2013 is the last year of the current multiannual financial framework, the Council proposed an increase in the level of payment appropriations significantly above inflation. Thirdly, the Council took into account the measures taken by Member States to consolidate their national budgets and, in the current economic context, particular emphasis was placed on keeping administrative expenditure under control in line with Member States’ domestic policy.

I will briefly set out the main elements of the Council’s position on each of the headings and subheadings of the multiannual financial framework.

Starting with heading 1 (Sustainable growth), the Council considers that this heading should be one of the top priorities in the 2013 budget. It has therefore proposed a substantial increase in both commitment appropriations (+2.79%) and payment appropriations (+6.71%). This increase will ensure that adequate financial resources are available to implement the Compact for Growth and Jobs agreed at the June European Council.

The Council attaches particular importance to the implementation of the various programmes and actions under this heading which play a key role in the context of the Europe 2020 strategy and will help deliver sustainable economic recovery.

The Council has also sought to secure an adequate level of payment appropriations for structural actions. It therefore agreed that under subheading 1b (Cohesion for growth and employment), payment appropriations should grow by more than 8% compared to 2012.

With respect to heading 2 (Preservation and management of natural resources), the Council proposes to stabilise the level of commitment appropriations compared to 2012. Nevertheless, because of accelerated implementation in the final year of the current multiannual financial framework, it supports an increase of more than EUR 440 million in payment appropriations compared to 2012.

The cuts applied to this heading are the result of an analysis of past budget implementation and of expected absorption capacities. They are based on the latest information available and are subject to revision following the presentation by the Commission of its traditional letter of amendment in the autumn at the end of the 2012 agricultural year.

Regarding heading 3 (Citizenship, freedom, security and justice), the Council supports modest reductions to both commitment and payment appropriations since it considers that the increases proposed by the Commission would exceed realistic absorption capacities. Nevertheless the Council has proposed a substantial increase (+5% in payment appropriations) under subheading 3a (Freedom, security and justice) in order to strengthen several budget lines, especially the one related to the External Borders Fund.

With respect to Heading 4 (The EU as a global player), the Council set commitment and payment appropriations at a lower level than that proposed by the Commission, taking into account past and current budget implementation and realistic absorption capacities, as well as the varying requirements of the different budgetary years.

This heading, together with subheading 1a and 1b and heading 2, is covered by a statement on payment appropriations in which the Council invites the Commission to submit a draft amending budget if payment requirements in 2013 exceed expected needs.

With respect to heading 5 (Administration), the Council, as usual, did not modify the European Parliament’s section of the budget. With regard to the other sections, whilst the Council acknowledges the efforts made by the Commission and other institutions to limit the increase in their respective budget estimates, it identified further potentials for savings. As a result, it set the administrative appropriations for the Commission and the other institutions at close to their 2012 levels.

The Council also rejected the creation of new posts in the establishment plans of the institutions, with the exception of posts related to the accession of Croatia. Furthermore, in the light of the Commission’s proposal to reduce by 5% the number of posts during the period 2013-2017, the Council has applied a 1% reduction of staff in the establishment plans of the institutions, apart from the European External Action Service, due to its recent creation, and the European Data Protection Supervisor and the European Ombudsman, due to their small size.

Finally, with regard to the decentralised agencies, the Council decided to maintain the level of appropriations for operational activities as proposed by the Commission, resulting in an increase of appropriations of +1.98% on average, nearly 2 percentage points higher than the nominal freeze applied to most of the institutions.

The same 1% reduction of staff was applied to those well-established decentralised agencies. New posts were only accepted for agencies in the start-up phase or for those which have been given new tasks. Overall, the Council has agreed to the creation of 185 new posts in decentralised agencies. More than one third of these will be for the three financial supervisory authorities (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Market Authority).

Mr President, I am convinced that the Council’s position on the 2013 draft budget strikes the right balance between recognising the difficult economic situation in Member States and providing sufficient appropriations in the EU budget to support programmes and actions with which we are aiming to address the economic crisis.

In the Compact for Growth and Jobs agreed at the European Council in June, Heads of State or Government stated that ‘the European Union budget must be a catalyst for growth and jobs across Europe’. I very much hope that this will guide all of us in our discussions together over the next few weeks and months as we seek agreement on the 2013 budget.

I thank you for your attention.

  Janusz Lewandowski, Member of the Commission. – Mr President, the Commission has already, on several occasions, clearly expressed its concerns concerning the reading in the Council of the budget proposed for 2013.

This was on the occasion of the trialogue on 9 July and in President Barroso’s letter to the Heads of State, as the Council’s reading does not comply with, or even contradicts, the conclusions of the summit of European leaders on the so-called Compact for Growth and Jobs. I can quote from the conclusions at the end of June where the leaders of the 27 States agreed that the European Union’s budget must be a catalyst for growth and jobs across Europe. I think that what the Commission proposed for the last year of the present financial perspective, namely 2013, complied with the logic of this decision by the Heads of State. We were pushing down commitments but in such a way that, through savings in many areas, we are able to increase headings for growth and jobs.

But the main battle, as usual, is about payments. It will come as no surprise to learn that we have not much choice left at the end of the financial perspective. The programmes are gaining maturity and there are growing needs and concerns as to investment capacity in many Member States of the European Union. The budget for 2011 was already too low – by EUR 5 billion at least – which did not allow us to reimburse the Ministers of 27 States. This does not help fiscal consolidation in the Member States and increases the so-called outstanding commitments or RALs.

We were proposing an increase of 6.8% but this was in the areas of growth, competitiveness and jobs. I think that the measure of whether we are right or not is the development this year. I can inform you that, at this moment in time, our implementation is EUR 9 billion higher than last year and last year there was already a shortage of money for reimbursements.

We have now completely exhausted the Social Fund and the Fund for Competitiveness and Employment, which is mainly for more developed regions of Europe. That indicates that we were right to increase our requests for payments for the last year of the financial perspective, especially in the areas that are really contributing to competitiveness, growth and jobs.

Therefore, I have to say once more that I am disappointed with the Council’s reading, which cuts both commitments and payments, the latter by EUR 5 billion. Where are the most severe cuts? The biggest cuts are in Heading 1a. What is the name of this heading? Heading 1a is Competitiveness for Growth and Employment, but this also covers cohesion. As regards cohesion, there is an assumption in the Council’s reading about debt commitments and reimbursements – made too late – to the Member States. This is also about our solidarity vis-à-vis our partners worldwide. There is also the question of administrative restraint. This should go as far as possible but cannot be detrimental to the efficiency of the administration which is entrusted with much bigger tasks now than previously.

Therefore, we should rather concentrate on how to realistically establish the required level of payments for the last year of the present financial perspective. I am really grateful to the Members of Parliament, including Alain Lamassoure, for the initiative to discuss the criteria and the points of reference in order to have a decent level of payments, not one that is exaggerated, but one which allows reimbursement of the money that is really needed.

We need goodwill in these final weeks before the conciliation. We need to understand what the financial perspective is about. We should be serious about the growth and jobs compact decided on by the Member States. Therefore, I still trust that we can manage this.

  Salvador Garriga Polledo, on behalf of the Committee on Budgets. – (ES) Mr President, I would like to begin by thanking the Council for attending in order to explain its draft budget. This would seem quite basic, but on many occasions in the past, we have not seen the Council. I would also like to thank the President-in-Office of the Council for coming to explain his position, however incomprehensible that position might seem to Parliament on many occasions, despite the fact that, nevertheless, in many cases and on many points, it is not so far from our way of thinking and from our aims, which are to combat the crisis and to promote growth and employment in the European Union.

The Commission has done its job well and has done so consistently and congruently. There is little sense in increasing commitment appropriations when there are not sufficient payment appropriations to meet them. The Commission is essentially intending to eliminate an RAL (outstanding commitments) already amounting to more than the entire Union budget for 2012.

Is the President-in-Office of the Council aware of the problem represented by an RAL of this size? This RAL represents, above all, a lack of credibility for the whole European Union in terms of being able to fund the projects to which it has committed, which is exactly the opposite of what the European public are asking for. They want a more effective and, above all, more credible European Union.

Then there is the traditional attitude of the Council of applying linear cuts in order to bring budgetary provisions into line with the pressure from certain Member States. Mr President, this attitude must become history. It does not work, most of all because it distorts the correct application of the budgetary resources available. Removing EUR 5 billion from the Commission’s accounts, which are drawn up based precisely on the forecasts sent by Member States regarding the execution of the Union budget, will have side effects that we believe will be negative.

Mr President, we need to combine austerity with realism. The political groups in this House will, as ever, read this in a positive way, seeking to combine European interests with the need to balance national accounts, which have been harshly affected by the economic and financial crisis.

We expect flexibility and a pro-European attitude from you. We expect this from everyone. Let us not forget that, although they are for different financial years, the budget for 2013 and the next multiannual financial framework are going to be very much linked, both due to the proximity of their negotiations and due to the main problem: that we do not need new commitments as much as we need money to pay for the existing ones.

  Giovanni La Via, rapporteur on the budget. – (IT) Mr President, Minister, Commissioner, ladies and gentlemen, the presentation of the Council’s position on the 2013 budget highlights a major contradiction between the statements by the Heads of State or Government on 28 and 29 June and the decisions made by the Committee of Permanent Representatives (COREPER) and the General Affairs Council.

On the one hand, there has been talk about investing in growth, development and employment while, at the same time, the biggest and most substantial cuts have been made precisely to those budget lines that fund the projects and policies capable of generating growth and creating jobs, especially for young Europeans.

As I have said on other occasions, I am aware of the financial difficulties that the Member States are all facing internally, but the response to the crisis needs to be ‘more Europe’ and not ‘less Europe’, as the Council has said in its public statements and hence, at the highest political level.

Therefore, we cannot peg the level of payments at a far lower level a priori, as the Council has done. As those who have spoken before me have pointed out, this is a cut of more than EUR 5 billion to the figure the Commission felt it was important to indicate in its draft budget.

I would like to remind Mr Mavroyiannis that the Commission bases this sum on estimates from the Member States, which are then revised downwards by the Commission, so the amount indicated in the draft budget as payment appropriations – that 6.8% increase compared with the 2012 budget – is not an arbitrary figure, but a realistic indication of the necessary resources calculated by the Commission on the basis of the information provided by Member States in order to honour all the commitments made from 2007 to date.

Furthermore, at the end of the financial programming, we cannot risk halting certain important research programmes because we do not have the funds to pay the invoices, as was the case in spring.

Mr Barroso himself felt the need to write to the Heads of State or Government expressing his concern for the across-the-board cuts made by the Council at its reading.

I do not think I am exaggerating in saying that Europe’s credibility and reliability are at stake, and this is why Parliament will be closely monitoring the payment situation for 2012, with the aid of the Commission, which has the latest figures. I therefore hope that the interinstitutional meeting scheduled for 26 September will be a useful exercise for defining actual needs and avoiding what unfortunately happened during the previous budget procedure.

Our idea, in order to try and meet citizens’ actual needs, is to propose a responsible reading able to guarantee that the European budget has the necessary resources for investment in growth and development.

  Derek Vaughan, rapporteur on the budget. – Mr President, as the rapporteur I will concentrate on Parliament’s budget and the budget of other sections. In Parliament, we have taken into account the letter sent by Commissioner Lewandowski earlier this year asking institutions to keep their administrative budget increase to 1.9%. Earlier this year, this Parliament agreed a 1.9% rise for 2013, excluding the extra costs of Croatia, and in doing that, we froze all the allowances of Members again and we decided to cut our travel budget by 5%. We also put in place a number of other measures to make some savings.

Earlier in the year, when we discussed our estimates report, we made it clear that we would expect to find more savings in the autumn, the ultimate aim being a 1.9% increase for Parliament’s budget, including the costs of Croatia. I am delighted to say that most of the other groups and most of the other shadows have agreed with this line and I thank them for their cooperation.

But, in order to achieve that figure of 1.9% including Croatia, we need to find another EUR 9 million worth of savings in Parliament’s budget and we are now looking at the possibilities for doing that. But when we do that, we will take into account that although we need to make savings, and it is important that we make those savings, we also need to make those savings without damaging the effectiveness of this Parliament and the effectiveness of Members of this Parliament. That will be our aim.

I also wanted to say a few words on the budget of other sections. I am pleased to say that most other institutions are also looking to come in with an increase of 1.9% including Croatia and the 1.7% salary increase which is proposed. There are a few institutions which will have problems, particularly the Court of Justice, which is seeing its workload increase by about 10% year on year. The European External Action Service is also making a case for an increase larger than 1.9% because they say they are a new institution and they have new responsibilities, particularly in the area of security.

So I think that rather than have a blanket freeze, as the Council is suggesting, we should look at each institution individually and see what their needs are before deciding what their increase should be and I would urge the Council to do that as well.

So, overall, this Parliament and most of the institutions will come in at around the 1.9% figure suggested by the Commission and I think that that is good news and I think that it does show that institutions in Europe recognise the economic and financial circumstances we all face and that we are being responsible.

  Janusz Lewandowski, Member of the Commission. – Mr President, I welcome, of course, the remarks made by Salvador Garriga and the attitudes expressed by both rapporteurs, Mr La Via and Mr Vaughan. This is a good starting point for determining the appropriate level of financing for Europe for 2013, and it is in line with the decision of the Heads of State asking for investment in growth, competitiveness and jobs. I believe that the Council – under the leadership of Andreas Mavroyiannis – is also ready to enter the dialogue for a timely agreement. By timely agreement, I mean a timely prospect for investment for 2013.

  Andreas Mavroyiannis, President-in-Office of the Council. – Mr President, honourable Members, I would also like to thank Mr Garriga Polledo, Mr La Via and Mr Vaughan for their very constructive remarks and, of course, I would like to thank my friend, Commissioner Lewandowski, for his comments – even though, on this one, we are not exactly on the same wavelength, but that is normal – so I thank you all for this very fruitful exchange of views.

It shows that our presentation of the Council’s position on the draft budget for 2013 has allowed all of us to better understand the respective positions and our mutual consensus. This is the first precondition to be met on our way to reaching an agreement on the 2013 budget in the coming months, which has to be within the deadlines that are set for us by the Treaty. I think that this time around, it is of paramount importance, given the circumstances.

Today’s discussion was a very good starting point on our way forward. This year’s budgetary procedure is taking place under extremely difficult circumstances, so we need to all work together in a constructive manner in order to succeed. We need, of course, a realistic and balanced budget for 2013. The Cyprus Presidency of the Council, and myself in particular – because Mr Lewandowski referred to me – are just humble servants on this issue, but we will do our best to get a very positive result.

At the same time, I take good note of the persisting divergence between the Commission and the Council, on the one hand, and between the positions of the Council and those of Parliament, on the other. We fully respect all of those positions. As Mr Lewandowski said, we intend to meet Parliament and the Commission on 26 September 2012 in order to discuss the level of payments for the current year.

On Mr La Via’s comments, I think that you know that in the Council and the European Council – and I say this very candidly from my experience having had bilateral contact with all Member States in July – everybody, all 27 Member States, agrees on the need for the budget to be at the service of growth and jobs. Everybody agrees that we need to have quality of spending and better spending. Although it might sound ironic, those who are talking about better spending are also those who are asking for cuts, so we need to be aware that the interpretation is not exactly the same for everybody.

On the contradiction in the European Council’s position for the combat for growth and jobs, we can assure you also that the Council in its position has left unchanged the total amount that was announced as being available from the 2013 budget – the EUR 55 billion out of the total of EUR 120 billion. This amount is there to be used accordingly.

I would like to add that, in its traditional role as an honest broker, we rely on the Commission’s support in this during the entire budgetary procedure. As has been the case in previous years, I count sincerely on Commissioner Lewandowski to help us find a proper way forward.

I would like to thank you very much for your attention and wish you every success in your examination of the Council’s position in the coming weeks. I am looking forward to our negotiations in October and November.

  President. – The debate is closed.

Written statements (Rule 149)

  Vojtěch Mynář (S&D), in writing. – (CS) The position of the Council on the 2013 budget represents something of a step in the right direction, as it assumes an increase in payments and commitments compared to 2012. Nonetheless, it includes EUR 5 billion less in payments, and EUR 1 billion less in commitments than the Commission proposal. With regard to the current economic situation in the EU, the European Parliament holds the long-term view across the political spectrum that cost-cutting measures are necessary but not decisive. In accordance with the Commission proposal, however, the European Parliament is prioritising effective management over short-sighted budgetary cuts. We must approach the setting of the budget in a responsible way, and especially take into account the real needs for fulfilling the EU’s long-term aims and commitments. This applies particularly to key investments aimed at securing the EU’s future economic growth. At the same time, all of the consequences of any cuts in the draft budget need to be considered carefully. Last but not least, it is absolutely essential to ensure that the savings do not have a negative impact on the effectiveness of the European Parliament’s work in any way. I am ready to support a budget based on an approach derived from these three working priorities and complying with the adopted social model.

  Franz Obermayr (NI), in writing. – (DE) I have a couple of fundamental points to make concerning the budget debate: Firstly, the ‘top down’ approach must be maintained at any rate. This means that the available level of funding is determined first. Only after this will a decision be made about which expenditures will be made and where, not the other way around! The bottom up approach promoted by net receivers is exactly the wrong signal during a time of debt crisis. The EU must not spend more than the net contributors are able and willing to pay. Secondly, a central EU tax is not a solution and fiscal sovereignty must remain with the Member States. Thirdly, I see sufficient potential for savings: in administrative costs for institutions, by establishing a single seat for Parliament for instance. It is also unacceptable for the EEAS (European External Action Service) to equip itself with a number of highly remunerated management positions without providing justification for these unreasonable staff costs. Now, an increase of 9.2% is budgeted for these positions as well! Resources for decentralised agencies are also to be increased by 3.2%. Fourthly, in terms of expenditures, resources for meaningful institutions such as FRONTEX must be increased.

  Franck Proust (PPE), in writing. – (FR) Certain Member States are going off the rails. Some countries know how to make themselves heard, unlike the French Government. Under the pretext of saving money, they have decided to make drastic cuts to the European Union’s budget for 2013. Of course, the crisis means that we have to think differently. Saving does not necessarily mean mortgaging our future. Cutting 15% from the research and innovation budget for 2013 and a quarter of the budget for SME development is absurd. In June, the Council wanted a pact for smart, sustainable growth, based on investment that created jobs. It all starts today. Technological innovation generates a very high added value and hundreds of thousands of highly skilled jobs. Our SMEs are the very basis of the real economy; not the basis of obscure markets, but the market that matters every day. The 2013 budget is no trivial matter. It will set the tone for the next decade, the framework of which we are currently outlining. If we are not ambitious, how do you expect our economic players to be ambitious? We need to stick to our goals and stop these endless discussions. Courageous and concrete proposals: that is what our fellow citizens want to see. Parliament, I hope, will not give in.

  Georgios Stavrakakis (S&D) , in writing. – (EL) Yet again this year, the Council has resorted to its favourite tactic of across-the-board cuts to all budget headings, without basing its decision on a detailed and thorough analysis. Although it is widely accepted and proven that cohesion policy is the main and most appropriate investment instrument for taking the EU into growth and creating jobs, the Council’s cuts focus on the objective of regional competitiveness and employment, on the objective of territorial cooperation and on the cohesion fund. It should be noted that these cuts are completely out of kilter with the conclusions of the June summit. As far as payments under this heading are concerned, the draft budget qualifies as an absolute minimum and is based on the assumption that all payments required from the previous year will be covered in 2012. However, with the Council cuts, the risk of this payment shortfall spilling over into 2013, as happened between 2011 and 2012, is more than visible. Any such development could jeopardise the proper implementation of these programmes in the final year of the current multiannual financial framework. We should therefore oppose the Council cuts.