The European Parliament,

–   having regard to the EC Treaty and in particular Articles 268 to 276 thereof,

–   having regard to the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council, and the Commission on budgetary discipline and improvement of the budgetary procedure(1),

–   having regard to the communications from the Commission to the Council and the European Parliament of 10 February 2004 - Building our common Future: Policy challenges and Budgetary means of the Enlarged Union (COM(2004)0101) and of 14 July 2004 on Financial Perspectives 2007-2013 (COM(2004)0487), the Commission's working document of 14 July 2004 "Proposal for renewal of the Interinstitutional Agreement on budgetary discipline and improvement of the budgetary procedure" (COM(2004)0498), the Commission's proposal of 14 July 2004 for a Council decision on the system of the European Communities' own resources (COM(2004)0501) and the Commission's report of 14 July 2004 on the operation of the own resources system (COM(2004)0505),

–   having regard to the Treaty establishing a Constitution for Europe(2),

–   having regard to Council Decision 2000/597/EC, Euratom of 29 September 2000 on the system of the European Communities' own resources(3);

–   having regard to its resolution of 22 April 2004 on building our common future: policy challenges and budgetary means of the enlarged Union 2007-2013(4),

–   having regard to its decision of 15 September 2004 on setting up a Temporary Committee on Policy Challenges and Budgetary Means of the Enlarged Union 2007-2013(5),

–   having regard to its question for oral answer O-0067/2004 (B6-0130/2004) to the Council and its resolution on the Financial Perspective with a view to the European Council meeting in December 2004(6) to the Council,

–   having regard to its question for oral answer O-0068/2004 (B6-0131/2004) to the Commission,

–   having regard to Rule 175 of its Rules of Procedure,

–   having regard to the report of Temporary Committee on Policy Challenges and Budgetary Means of the enlarged Union 2007-2013 and the opinions of the Committee on Budgetary Control, the Committee on Economic and Monetary Affairs, the Committee on Employment and Social Affairs, the Committee on the Environment, Public Health and Food Safety, the Committee on Industry, Research and Energy, the Committee on the Internal Market and Consumer Protection, the Committee on Transport and Tourism, the Committee on Regional Development, the Committee on Agriculture and Rural Development, the Committee on Fisheries, the Committee on Culture and Education, the Committee on Civil Liberties, Justice and Home Affairs, the Committee on Constitutional Affairs, the Committee on Women's Rights and Gender Equality, the Committee on Foreign Affairs, the Committee on Development, and the Committee on International Trade (A6-0153/2005),

A.   whereas the current Financial Perspective and the Interinstitutional Agreement of 6 May 1999 on budgetary discipline and improvement of the budgetary procedure will in principle end in 2006;

B.   whereas most Community legislation with financial implications will terminate in 2006;

C.   whereas the preparation of the next Financial Perspective is one of the major challenges to be faced by the Union over the coming months, as it will shape the new enlarged Europe, having regard to new internal and global challenges and tasks;

D.   whereas the European Parliament decided to set up a Temporary Committee with the following mandate:

E.   whereas the Temporary Committee should present its final report before the European Council establishes its common position;

F.   whereas in accordance with paragraph 26 of the Interinstitutional Agreement of 6 May 1999, the Commission has initiated the process of the preparation of the new Financial Perspective and the new Interinstitutional Agreement by presenting proposals on 10 February and 14 July 2004 respectively;

G.   whereas the Treaty establishing a Constitution for Europe (the Constitution) strengthens the role of the European Parliament in many legislative areas, widens the scope of the Parliament's budgetary authority, and, in Article I-55 and in Article III-402(5), provides for the multi-annual financial framework to become a European law of the Council, adopted by unanimity after conciliation with and the consent of the European Parliament, to be given by a majority of its component members;

H.   whereas paragraph 26 of the Interinstitutional Agreement of 6 May 1999 provides for a prolongation of the current Financial Perspective, unless it is expressly denounced by one of the parties to this agreement;

I.   whereas, in the absence of an interinstitutional agreement, the EC Treaty allows for the adoption of annual budgets under the provisions of Articles 272 and 273 if the budget has not been adopted by the beginning of the financial year;

J.   whereas the new Commission officially endorsed the proposals of the former Commission regarding the structure, the duration and the level of financial resources per year and per heading of expenditure of the new Financial Perspective and all the legislative proposals known collectively as the "Prodi Package";

K.   whereas, in its above-mentioned resolution of 22 April 2004, the European Parliament stressed that "there will be no financial perspective without an agreement between the European Parliament and the Council on the financial package, as the existing Treaty foresees no obligation to have a financial perspective and only provides for annual budgets";

L.   whereas the VAT and GDP resources (which were intended at the time when they were established as revenues complementary to traditional EU own resources) have gradually become the principal source of financing for the Community budget; whereas, together with the derogation regimes which have been added to the current own-resources system, they have only made it more complex, more opaque for citizens and increasingly less equitable and have led to a financing system which has resulted in unacceptable inequalities between Member States;

M.   whereas the conclusions of the December 2004 European Council confirmed the "Prodi Package" as the working basis for the Council, which agreed on institutional dialogue through regular contacts with the European Parliament;

N.   whereas in the conclusions of the December 2004 European Council, the link between the Financial Perspective and the issue of own resources and the correction mechanism is clearly established;

O.   whereas, over the last six months, the Temporary Committee:

P.   whereas the Constitution provides for the possibility of introducing new categories of EU own resources and of abolishing an existing category,

General context

1.  Insists that the enlarging European Union should have appropriate financial resources to match the scale of its rising political ambitions and to meet its growing responsibilities at home and abroad; insists further that all expenditure from the EU budget should be designed to add European value to the public expenditure of Member States, and that the principle of subsidiarity should be strictly respected with regard to spending decisions in the field of non-exclusive competence - in particular the criterion that EU action does, by reason of its scale or effects, better achieve the objectives of the Union;

2.  In the interests of sound financial management, simplification and democratic accountability, demands improvements in and simplification of the mechanisms of financial control both at the level of the institutions and within the Member States, so as to ensure real public accountability for all EU spending;

3.  Recalls that the Financial Perspective is a financial framework aiming to secure the development of EU priorities in a context of budgetary discipline, and is not a multi-annual budget set for seven years; points out that the Financial Perspective remains a reference and therefore must provide the necessary flexibility to reflect medium-term political ambitions and provide the financial resources needed in order to enable future challenges to be met effectively and fairly, as laid down in the EC Treaty; is determined to make full use of the powers granted to it under Article 272 of the Treaty, pursuant to which an annual budgetary procedure is established for the purpose of approving the expenditure of the European Union;

4.  Notes that the new Barroso Commission has fully endorsed the proposals presented by the Prodi Commission over the last months of its mandate; however, rejects a system which binds the elected and executive bodies of the European Union over three consecutive mandates;

5.  Is aware of the difficult political, economic and social context in several Member States, but recalls that the EU budget has increased by 8.2% between 1996 and 2002, while the average increase in national budgets (EU-15) has been 22.9%; notes that the MacDougall report(7) considers that the European budget should amount to 2% to 2.5% of Member States' GDP; takes the opportunity to point out that the ceiling of own resources decided in 1993 for 15 Member States has remained unchanged since then, i.e. 1.31% of EU GNI for commitment appropriations and 1.24% of EU GNI for payment appropriations; recalls that the level of the EU budget currently accounts for under 2.5% of aggregate public spending in the Union compared to an average of 47% of EU GNI for total public spending;

6.  Considers that the costs of enlargement, which must be tackled in a fair and equitable way, can be perfectly assumed by the 15 old Member States and that they must be considered as a minimum, taking into account the political, social and economic benefits that the reunification of Europe represents for the whole Union;

7.  Is convinced that the Financial Perspective can allow for balanced development of the financial resources allocated to the Union provided that:

8.  Stresses that the debate on the Financial Perspective is closely linked to the issue of own resources, the correction mechanism and various forms of co-financing and financial instruments and the need to adapt the existing system, as acknowledged by the European Council in its conclusions of December 2004; regrets that the Commission did not present more ambitious proposals to replace the current system in parallel with the new Financial Perspective;

9.  Will take account, in its final vote, of the way in which the Council acknowledges the need for a thorough reform of the current own resources system on the basis of which new expenditure can be shared out fairly among the Member States and, subsequently, a return can be made to the original principle of the funding of common policies with genuine own resources using a transparent, equitable and democratic system which should enter into force at the latest at the beginning of the following Financial Perspective;

10.  Notes that the entry into force of the Constitution will modify the legislative procedure for a number of proposals, introducing co-decision; is aware that it would be impossible to anticipate the Constitution in legal terms before the end of the ratification procedure; urges the Council to agree on a gentleman's agreement to safeguard the legislative powers of the European Parliament and to introduce a revision clause for legislative acts whose procedure will change after the Constitution comes into force;

11.  Considers that,

12.  Recalls that under the current Treaties a Financial Perspective does not have a formal status and can only be established with the approval of the European Parliament on a voluntary basis; recalls further that, if no agreement is reached, the EC Treaty will be applied for the purpose of regulating the adoption of annual budgets; stresses that it will not agree on the next Financial Perspective if its priorities are not taken into consideration by the Council;

13.  Welcomes to some extent the Commission's proposals on the next financial framework 2007-2013 and the related legislative proposals, which form part of the "Prodi Package" and are intended to replace most of the current legislation ending in 2006, as an opportunity for the enlarged Union to further develop a new political agenda; after an in-depth analysis by its Temporary Committee and by the 17 committees which delivered opinions to it, considers that the Commission proposals have received qualified support and, as such, are an acceptable basis for analysis and future negotiations; nevertheless draws the Council's attention to certain political priorities where European added value for the Union and its citizens is of the utmost importance;

14.  Regards it as essential, moreover, that the Financial Perspective be approved promptly so that it can be fully operational from 1 January 2007, thereby preventing any hiatus in the work of the EU, in particular as regards the Commission's legislative proposals;

Part I Policy challenges
A more competitive and cohesive Europe
Cohesion

15.  Welcomes the proposed reform of cohesion policy with a view to placing it at the service of the objectives of growth, employment and sustainable development; considers that European regional policy is an indispensable tool for promoting social, economic and territorial cohesion, permitting the Union to undertake actions to reduce regional disparities, with a view to fostering the harmonious development of the Union as a whole and addressing structural shortcomings (difficult access, depopulation and low population density, remote location etc.), so as to stimulate the sustainable development of the regions, their growth, competitiveness and employment; underlines the importance of cohesion policy in achieving the Lisbon goals and helping to bridge the gap between the different territories of the European Union; insists that all resources allocated to cohesion policy should be spent for this purpose; is convinced that joint action at European level is cost-effective since it allows for economies of scale, the rationalisation of procedures and the pooling of resources, particularly in the context of cross-border co-operation; considers that the existence of a strong, well-financed European regional policy is a condition sine qua non of the Union's ability to deal with successive enlargements and reduce regional disparities and that, in the process, the basic structure of the system of assistance programmes, with three pillars, must be maintained in terms of the comparative relationship between them; considers, therefore, the amount of 0.41% of the Union's GNI and 4% of national GNI of the new Member States as adequate, provided the Member States can ensure that the actions take place in addition to national and regional measures and that the corresponding co-financing (using public and private funds) is made available; is determined to monitor the strict application by the Commission of the N+2 rule in the Structural Funds and insists, therefore, that the present rules regarding the Cohesion Fund should be further applied;

Research

16.  Stresses that scientific research, technological development and innovation are at the heart of the knowledge-based economy and are key factors for growth and sustainable development, the competitiveness of companies, employment, and attainment of the objectives of the Lisbon Strategy; considers that research efforts should be boosted and consolidated at EU level, developing centres of excellence, bringing added value to industry, SMEs and the citizens of Europe, and promoting cooperation between private and public actors, especially regarding research infrastructure and the encouragement of public-private partnerships; stresses that this Financial Perspective must make a substantial contribution towards reaching the target established at the 2002 Barcelona European Council for an increase in R&D expenditure to 3% of EU GNI by 2010, and that this must be factored into future Financial Perspectives; considers that provision should be made for appropriate resources for the implementation of the Space Programme within the envelope for research, and that legislative instruments and financial resources should benefit from a revision clause once the Constitution enters into force; insists that the European Research Area should effectively include all 25 Member States; regards it as vital both for European competitivity and for social cohesion that the digital gap between regions and social groups should be bridged and that no EU citizen must be excluded from the information society;

Trans-European Networks

17.  Welcomes the Commission proposal on TEN-T priority projects; notes however that the resources allocated for 30 transport priority projects as well as for the Marco Polo programme constitute a minimum amount which must be regarded as subject to upward revision; underlines the strategic importance of transport networks for final consolidation of the EU single market and for closer EU relations with candidate, pre-candidate and 'ring of friends' countries; notes that the interconnection of transport networks can underpin the development of trade and investment, thereby promoting sustainability and stability as well as social, economic and geographical cohesion; calls for adequate funding for the development of transport interconnections and common infrastructure shared by the countries; insists that this funding should be conditional on guarantees by the Member States of adequate counterpart funding and adequate access to the network for the regions concerned, and is willing to examine innovative financing instruments such as loan guarantees, European concessions, European loans and an interest relief fund, to cover public and private-sector investment only in research, innovation, space and major physical and non-physical networks, or EIB facilities;

18.  Notes that the new regulation would also allow financing infrastructure in the TEN-E programme, which was not the case in the previous framework 2000-2006; is of the opinion that studies should be the main focus of support under this programme;

The Social Policy Agenda

19.  Considers that the modest financial means earmarked for the implementation of the Social Policy Agenda constitute the minimum needed to enable a contribution to be made to the Lisbon strategy for sustainable growth with more and better jobs; considers that an adequate level of Community expenditure in the social policy area remains crucial, in particular in terms of employment and social protection; stresses however that primary responsibility and competence in social policy matters lies with the Member States; believes that an increase of EUR 200 million is necessary in order to attain the goals of the Social Policy Agenda;

Education and training

20.  Considers lifelong learning, including education and training, to be one of the highest priorities for the next Financial Perspective and a key factor for growth, social inclusion and competitiveness; regards the proposed increase in its financial envelope as the absolute minimum necessary for the attainment of EU objectives in this area; considers that the effectiveness of European programmes in the field of lifelong learning, including education and training, are self-evident as they provide added value and are an instrument for spreading innovation and good practice that would otherwise remain locked within national borders; stresses that mobility throughout the Union for students and workers must be strengthened so as to enable them to benefit from new opportunities; stresses that more students should be involved in joint educational activities; welcomes the consolidation into a single instrument; believes that an increase of EUR 670 million is necessary in order to attain its goals;

A better quality of life
Rural development

21.  Considers that the restructuring of the Common Agricultural Policy (CAP) needs to be accompanied by a substantial increase in rural development funds to address the problems of employment and competitiveness in rural areas, in particular in the new Member States; considers that investment in rural development also requires support for enterprises which promote diversification of the countryside; is of the opinion that the Commission's proposal for the budget of the new Rural Development Fund is extremely tight and therefore constitutes an absolute minimum;

Environment

22.  Welcomes the Commission's proposal that Natura 2000 be integrated into the Rural Development Fund and the structural funds which should be the main sources of financial resources alongside a significantly strengthened Life+ programme; insists in this context on a legally binding mechanism which guarantees proper implementation and EU funding for Natura 2000 at the level of the EU's estimated contribution to the envisaged overall amount, which is approximately EUR 6.1 billion for the EU-25 per year; insists that an amount of EUR 21 billion for Natura 2000 should therefore be earmarked ("ring-fenced") in the Financial Perspective within the respective areas; calls for the funding of measures to implement Natura 2000 under Heading 2 of the Financial Perspective; calls for the funding of Natura 2000 activities and management which cannot be financed by other instruments within the Life+ programme; calls on the Commission in this context to examine the possible integration of Natura 2000 in other funds;

An Area of Freedom, Security and Justice

23.  Singles out the completion of the Area of Freedom, Security and Justice as one of its political priorities for the period of the next financial framework and notes that the Commission has proposed a substantial increase in the funds allocated to it; considers that the proposed allocation to this area of around two thirds of the funds provided for in the proposed Heading 3 may not be sufficient to cover the needs and the ambitions of the European Union in this area as defined by the European Parliament and the Council; believes that an increase of EUR 1 billion is necessary in order to attain its goals; moreover, believes that a sufficient margin must be left under Heading 3 to allow for unforeseen needs and new developments;

24.  In the light of the priority given to the fight against organised crime, including terrorism, and the strengthening of judicial cooperation, calls for a consolidation of the budgetary resources made available to Europol and Eurojust; calls, further, for that measure to be accompanied by a strengthening of the democratic scrutiny of Europol;

A Europe closer to the citizen
Fostering European citizenship, culture and diversity

25.  Considers the Youth in Action Programme a priority; believes that the current Youth programme has clearly demonstrated the added European value of Community action in organising multilateral youth exchanges, a European voluntary service, the networking of projects, and European training for youth workers; welcomes the proposed rationalisation of Community instruments in this field; believes that an increase from EUR 811 million to EUR 1 000 million is necessary in order to attain its goals;

26.  Welcomes the rationalisation of Community instruments in the field of culture envisaged in the Commission's proposal for a Culture 2007 programme (COM(2004)0469); deplores the fact that, at present, only 7 cents per head out of the EU budget is spent on the arts; believes that an increase from EUR 360 million to EUR 500 million is necessary to improve the financing of the Commission proposal;

27.  Is concerned that a large majority of European citizens say that they know little or nothing about the European Union, its institutions, its policies, or its achievements; stresses that the Union must make available the means necessary to support an effective information and communication strategy to explain to citizens how the institutions which exist to serve them work and why they pursue the policy goals they do; calls for increased coherence between the financial perspectives and the new provisions of the Constitution, also with regard to participatory democracy and, in particular, to the development of civil dialogue and the implementation of citizens' initiatives; welcomes the submission of a legislative proposal for the successor programme to the Civic Participation Programme that remains a priority in order to promote an active and vibrant civil society and bring Europe closer to its citizens through a bottom-up process;

A stronger Europe in a safer world of greater solidarity

28.  Insists on a level of funding for external actions sufficient to enable the EU to become a real "global partner" in the world and to provide it with the means for its political ambitions and its international commitments; stresses its unwillingness to perpetuate a situation of constant pressure under Heading 4 as occurred under the current Financial Perspective and points particularly to the need for a high level of flexibility and sufficient margin to allow for unforeseen events; points out the need to provide sufficient funding to ensure the implementation of the approach indicated by the Constitution in this area, in particular the new Neighbourhood Policy on the basis of the special partnership provided for in Article I-57 thereof;

29.  Underlines the need to further diversify the European Neighbourhood strategy providing also an attractive alternative for those countries which potentially could become Member States of the European Union but which will ultimately remain close partners of the Union; insists that the European Parliament, being part of the budgetary authority, must in the future be involved as an equal partner, as it is today, in any decision concerning the transition of a potential candidate to a pre-accession candidate, owing to the significant budgetary implications; is of the strong opinion that an increase of funds is necessary in order to deepen relations with its neighbouring countries and to provide an adequate level of funds for potential candidate and candidate countries that guarantees them fair and equal treatment; draws attention, in particular, to the fact that the resources available to fund EU relations with the developing countries must be considered as a minimum with a view to honouring the European commitment to help those countries achieve the Millennium Development Goals by 2015;

30.  Calls for coherence between the provisions of proposed legislative instruments and the likely forthcoming provisions of the Constitution, enhancing in all cases effective democratic participation of the European Parliament in decision-making, including the adoption and revision of multi-annual strategic frameworks; points to the particular need for greater participation of the European Parliament in decisions on CFSP actions, especially where these have budgetary implications; in this regard, considers it indispensable to develop further the current practices for information and consultation of Parliament in the context of CFSP; considers that allocation of funding should fall under the "normal" EU budget and thus under the discharge authority of the EP;

31.  Welcomes the impending creation of the European External Action Service and insists that its administrative costs will fall in their entirety to the EU budget;

32.  Welcomes the renewed determination of the EU and the US leaderships with a view to shaping a common agenda, including joint actions on foreign policy issues; notes that this approach is not reflected in the Commission proposals and insists that the European Parliament should participate in decisions on these matters if they have budgetary implications;

Part II Organisation and structure of the financial framework
Duration

33.  Notes that the Commission has proposed a financial framework of 7 years' duration; reiterates, for reasons of democratic responsibility and accountability, its position in favour of a parallelism between the duration of the Financial Perspective and the five-year mandates of the European Parliament and of the Commission, and recalls that the Constitution provides for a duration for the future MFF of a minimum of five years, which would allow for co-ordination with the terms of office of the Commission and of the European Parliament; points out that the duration of the legislative proposals could remain independent from the timeframe of the Financial Perspective; therefore requests its delegation negotiating the Interinstitutional Agreement to insist that the future Interinstitutional Agreement include provisions guaranteeing a longer (up to 7 years) duration for multi-annual programmes, compared to the duration of the future Financial Perspective, in particular for major policies such as agricultural policy, structural and cohesion policy and research;

34.  Supports the Commission's proposal for a financial framework of 7 years' duration; considers that a shorter time framework would be technically and politically impractical, and that a longer financial perspective will contribute to the stability of the system and facilitate the programming of the cohesion policy and of other financial instruments of the common budget;

Structure

35.  Takes note of the Commission's proposal to restructure the next financial framework, with the aim of better reflecting the broad policy goals, strengthening social and economic cohesion and making the EU's multi-annual spending more visible to its citizens, but considers that in some cases this introduces unnecessary rigidity;

36.  Considers that the relevance of Heading 3 (Citizenship, Freedom, Security and Justice) may be questioned in terms of the volume of appropriations compared with all the other headings, but that it is nevertheless acceptable in political terms; is in favour of the creation of an autonomous sub-heading for the Area of Freedom, Security and Justice within this heading, in order to ensure greater visibility for this important political priority of the EU, and at the same time wishes to ensure that funding of the other parts of the heading is not reduced;

37.  Recalls that once the Constitution is in force and the distinction between compulsory and non-compulsory expenditure is abolished, the ring-fencing of resources for market-related expenditure and direct payments under Heading 2 will no longer exist;

Administrative expenditure

38.  Is willing to maintain a structure which facilitates control by the budgetary authority over the Commission's administrative expenditure and is therefore against the proposal to remove this expenditure from Heading 5; considers nevertheless that the Activity-Based Budgeting (ABB) system introduced for the budgetary nomenclature should be preserved and further developed; is therefore in favour of leaving the Commission's administrative expenditure within each policy area but of establishing a binding ceiling outside the Financial Perspective table, with the possibility for this ceiling to be increased only by a decision of the budgetary authority, using any means offered by the future Interinstitutional Agreement; stresses that budgetary rigour should be upheld by all the EU institutions;

Agencies

39.  Is concerned about the constant increase of all types of agencies (decentralised, executive and regulatory agencies) and deplores the fact that the Commission has not been able to provide details of multi-annual programming for agencies over the next financial framework; calls on the legislative authorities to take budgetary impacts into account when establishing new agencies; emphasises, in the same context, that the increase in the working tasks of individual agencies also has massive budgetary impacts on the EU budget; calls on the Member States, in connection with the establishment of new agencies, to take the necessary responsibility for their future financing;

40.  Stresses that the development of agencies should in future be continuously examined by both the budgetary and legislative authorities, not only because of the administrative burden decentralised bodies create for the budget (2 735 staff on top of the Commission's establishment plans in the 2005 budget), but also because of the risk of intergovernmental influence on common policies through the presence of Member States' representatives on their management boards and the lack of democratic accountability to the European Parliament;

41.  Calls for an approach similar to that requested for the Commission's administrative expenditure, based on the establishment of a binding ceiling for the agencies, outside the Financial Perspective table, which can be increased only by a decision of the budgetary authority using all means offered by the future Interinstitutional Agreement; intends by these means to improve control and transparency over the agencies without adverse effects on the programmes;

Revision, flexibility and reserves

42.  Recalls that during the current Financial Perspective all the various instruments provided for to increase the ceiling of the Financial Perspective, such as revision, adjustment, flexibility and the Solidarity Fund, were mobilised following a joint agreement to respond to permanent and structural needs or to finance unforeseen needs; stresses that flexibility is an indispensable tool in a multi-annual context; recalls that until 1999 the Financial Perspective was revised on a number of occasions and that, over recent years, and especially during the current Financial Perspective (2000-2006), the Flexibility Instrument has been mobilised six years out of seven, which clearly shows that some headings were underfinanced; calls, in future, for the flexibility mechanisms not to be used to finance permanent annual needs;

43.  Emphasises that flexibility will play a crucial part in the European Parliament's negotiating position; will reject any attempt by the Council to agree on a financial framework without appropriate mechanisms to adapt it to future needs and considers that it is a major responsibility of the budgetary authority to provide for such mechanisms; believes that the volume and the instruments of flexibility are closely linked to the decision on the overall figures and the final structure and duration of the financial framework;

44.  Therefore proposes:

45.  Stresses that the principle of creating reserves for flexibility is a non-negotiable part of the overall agreement on the financial framework; considers that the level of flexibility should be closely linked to the global ceiling of the financial framework and that the amounts allocated to unforeseen needs should:

Part III Budgetary means and alternatives

47.  Considers that the Commission proposal is globally acceptable; is of the opinion that, whilst some headings have been overestimated, others do not reflect the ambitions that an enlarged Union of 490 million inhabitants may expect in political, economic and solidarity terms over the coming years;

48.  Is of the opinion that options and alternatives need to be explored to find a compromise between the ambition to deepen European integration, budgetary rigour, the legitimate expectations of the new Member States and the Commission's proposals; is also willing to rebalance the global volume of expenditure in accordance with its own political priorities for the future;

49.  States, in consequence, as options for alternatives with respect to the Commission proposal and, as shown in the table annexed, that it:

50.  Believes that the negotiations should not only focus on percentages and figures but should also introduce other elements such as the principles of equity and gradualness which are fundamental to the EU, with a view to striking a balance which can meet the expectations of both Member States and citizens; calls on the Commission and the Council to consider these elements as sine qua non conditions for reaching an agreement with the European Parliament; states in this regard that it:

Part IV Recommendations for the standing committees on legislative aspects

51.  Considers that the following recommendations should constitute an indicative orientation for the specialised committees, without prejudice to future legislative decisions;

Competitiveness and innovation

52.  Remains concerned that previous innovation and competitiveness programmes have failed to deliver the necessary link between fundamental and applied research and industrial innovation partly due to the fact that the financial resources were rather limited; believes that the support of the European public is indispensable for realising the Lisbon goals; considers that the Commission should propose a simplification of its financial procedures with a view to facilitating the implementation of research policy; considers that financial instruments need to be rethought in a more fine-tuned, targeted way and that the establishment of an ambitious programme for competitiveness and innovation endowed with adequate financial resources is vital for supporting a "prosperity" oriented industrial policy, notably for SMEs, that would successfully capitalise on research through industrial applications, such as technology transfer from universities and research centres into industrial application; considers that further steps should be taken to foster development of the information society as proposed by the Commission, developing and promoting international standards for ICT and mobile telecommunication technology, monitoring the implementation of the electronic communications legislative framework, supporting EU benchmarking activities in the field of eEurope action plan initiatives and further enhancing EU security research; regards such a programme as essential in order to achieve the objectives of the Lisbon Strategy in the sphere of new technologies and ecotechnologies; considers that adequate funding must be secured through the 7th EU Research Programme (FP7) and the Competitiveness and Innovation Framework Programme (CIP) for the EU Action Plan for Environmental Technologies (ETAP); calls for adequate funding for the support of innovative SMEs and initiatives aimed at helping the commercialisation of research and the transfer of technology, notably through the European Investment Fund;

Space Programme

53.  Notes that the European space policy is now a part of the Research Framework Programme; points out that, in anticipation of the entry into force of the relevant provisions of the Constitution, where the Space Programme has its own legal base (Article III-254), this should be treated as a separate policy area with its own clearly defined legal basis and be endowed with adequate financial resources and appropriate financial instruments to support space-related research activities as well as the development and operation of infrastructures of Galileo and GMES, and EU access to space; believes that particular rules must be introduced into the Framework Programme to enable the implementation of these specific activities;

Trans-European Networks

54.  Notes that, due to the size of projects and their financial envelopes, there is no real substitute for national or Community funding; observes that the often-embraced hope of seeing growth in the participation of private investors remains for the moment, with a few rare exceptions, unrealised; takes note of the adoption of the new Regulation (EC) No 807/2004 of the European Parliament and of the Council of 21 April 2004 amending Council Regulation (EC) No 2236/95 laying down general rules for the granting of Community financial aid in the field of trans-European networks(8), which allows aid to be concentrated on projects which have the greatest need (priority cross-frontier projects, or those crossing natural obstacles), and increases the maximum rate of support for priority projects to 20%-30% and to 50% in exceptional cases;

The Social Policy Agenda

55.  Takes note of the legislative proposal for the new PROGRESS programme and stresses the importance of, and the need for, a coherent European programme including adequate funding in this area, which stimulates action at national level; considers therefore that the financial framework of PROGRESS must be increased if the European Union is really serious about implementing the Lisbon Strategy and the Social Policy Agenda;

Cohesion

56.  Calls on the Commission to establish "development targets" and measurable, concrete and precise indicators with an economic, social and environmental dimension along the lines of the conclusions of the Lisbon and Gothenburg European Councils, to simplify current administrative procedures, in such a way as to ease the administrative burden on Member States, by means of a revision of the relevant provisions of the Financial Regulation if necessary; stresses that the cap of 4% of GNI on Structural Funds payments is based on previous experience but should be treated in a more elastic way; believes that a temporary further differentiation in EU co-financing rates of EU programmes could be considered; calls on the Member States to solve the problems with shared management and to improve the reliability of the controls they perform as well as their forecasting methods; calls further for a clear commitment and a precise timetable for the implementation of the principle of disclosure statements by Member States' highest political and managing authority (Finance Minister);

57.  Points out that regional policy cannot be seen in isolation from regional aid law and calls for proposals to be coherent and for excessive disparity in assistance between neighbouring regions to be avoided, since this can lead to glaring distortions of competition; highlights the particular situation of the outermost regions (Article 299(2) of the EC Treaty), which require differential treatment vis-à-vis the cohesion policy parameters; proposes a transitional mechanism to allow the regions affected by the statistical effect to continue to require adequate support from the EU, since no region should feel that it has suffered as a result of enlargement; points out, furthermore, that the interaction between regional policy and competition policy in the regions affected by the statistical effect must be acknowledged and must be included in the analysis of the effects which current and future rules on state aid have (or will have) on such regions, and also that regions in transition, especially those technically falling under objective 1 but also those covered by objective 2, should receive adequate support and be given preferential treatment in the application of State aid rules;

58.  Welcomes the publication by the Commission of a draft text which seeks to introduce an EU loan guarantee instrument for TEN projects in the transport sphere; takes the view that such an arrangement could be extended to cover other areas with the aim of fostering the investment required to achieve the Lisbon objectives;

Agriculture

59.  Considers that a major objective of the CAP is to guarantee the model of multifunctionality of the European agricultural sector, to secure the functioning of the internal market in agricultural products and appropriate incomes for farmers, to guarantee the availability of home-produced, high quality agricultural products, including high standards of animal health and welfare, to provide further support for rural areas which lag far behind urban areas in terms of income, infrastructure and access to services, to promote sustainable and environmentally friendly farming practices in order to preserve the environment and, against the background of the Lisbon Strategy, to strengthen the competitiveness of the European farming industry, so that it can make a contribution to securing jobs in the agricultural sector;

60.  Notes the significant reforms of the CAP and the common market organisations which the European Union has carried out since 1999; on that basis, calls on the Commission to make clear to the EU's partners the major sacrifices which have already been made by Community producers as a result of those reforms and to defend, in the Doha development agenda trade negotiations, the multifunctional model for European agriculture; emphasises, further, the need to safeguard the Community preference, in particular by striking a fair and equitable balance between requests from the developing countries for market access and the stability and viability of Community markets, so that those markets can be effectively managed and crises which would impose additional financial burdens on the European Union, and thus create fresh budgetary problems, can be avoided;

61.  Recalls that the fundamental agricultural policy reform in 2003, including the reform of nearly all common market organisations, was based on the validity of the financial framework laid down in the decision of the European Council in October 2002; recalls furthermore that the European Parliament has agreed to the Treaty and Act concerning the conditions of the accession of the 10 new Member States, which based its financial aspects concerning agriculture on the European Council's agreement;

Fisheries

62.  Considers the Common Fisheries Policy (CFP) an essential element, amongst others, of the European Union's environmental efforts to rebalance the marine ecosystem, some species of which are being over-exploited; considers that the funding provided for by the Commission is the essential minimum required for conservation of stocks and for the purposes of achieving the objectives based on sustainable development which were agreed when the CFP was reformed in 2002; considers that the CFP must take better account of the situation of fishermen and pay particular attention to the specific case of the extremely remote regions;

Environment

63.  Is of the opinion that the European Union's environmental policy has proven to be an essential instrument in contributing to mitigating the effects of climate change, halting the decline in natural habitats and bio-diversity, protecting water resources, improving the environment, health and the quality of life, promoting the sustainable use and management of natural resources and waste and developing strategic approaches to policy development, implementation and information/awareness raising as well as sustainable economic growth and employment and ecological cohesion;

64.  Points out that environmental policy areas contribute to the attainment of the Lisbon and Gothenburg objectives; is strongly in favour of mainstreaming environmental policy areas into other policy areas; emphasises that environmental aspects and impacts such as environmental technologies, environmental research and nature protection have to be fully taken into account in financing policies under Heading 1 and under Heading 2;

An area of Freedom, Security and Justice

65.  Welcomes the efforts to simplify and rationalise the current situation in this area through the definition of three framework programmes ("Solidarity", "Security" and "Justice"), which will also allow for greater flexibility in the allocation of priorities among the different actions, but stresses that this approach should not diminish the political and budgetary control by the European Parliament; warns that the introduction of the notion of "shared management with Member States" for implementing the programmes in this area needs to be accompanied by adequate control mechanisms;

66.  Reserves, until after the Commission presents legislative proposals, its final opinion on the specific content of the programmes and particularly whether the proportion of the global funds proposed by the Commission for each programme is adequate to give the necessary visibility to the European Parliament's main priorities in this area: the promotion of fundamental rights, reinforcement of the security of citizens and effective implementation of common immigration and asylum policies (particularly with regard to the Refugee Fund);

Consumer protection and public health

67.  Calls on the Commission to submit the legislative proposals for the new Consumer Policy and Public Health programme without any delay, in order to enable the European Parliament and the Council to begin legislative work in time to allow for the programmes to enter into force at the beginning of 2007; is still convinced that a division into a new Consumer Policy programme and a new Public Health programme will provide the best solution to meet the EU's priorities; underlines that the financial resources allocated to the new programme need to be substantially increased compared to the current situation; observes that the impact of the previous enlargement round and the future enlargement on countries with deficits in the health and consumer field as well as the proposed widening of the scope of the programme need to be taken into account;

Education and training

68.  Believes that an increase in the average Erasmus student mobility grant is necessary; believes that, over the lifetime of the programme, the Comenius sub-programme should aim to involve more pupils in joint educational activities; considers that these improvements to the programme require a substantial increase in the reference amount proposed by the Commission;

Fostering European culture and diversity

69.  Underlines the significance of the audio-visual sector with respect to technological changes and innovative economic processes and stresses its possible contribution to the creation of a knowledge-based economy as envisaged by the Lisbon process; underlines that the development of the audio-visual sector is primarily dependent on the private sector, independent media and public funding of the Member States; underlines the positive results of the current MEDIA programmes; underlines that the MEDIA programmes have proved to be very efficient and have demonstrated notable European added value in order to support the development of the sector; underlines that an adequate level of funding for the MEDIA 2007 programme is important and that the amount proposed by the Commission is the minimum necessary to attain the goals of the programme;

70.  Welcomes the integration of several activities with extremely small financial frameworks into the new CULTURE 2000 programme and emphasises that an adequate level of funding in this area remains crucial, drawing attention to the need to include the main activities of the action programme for 2004-2006 within the new multi-annual framework; calls on the Commission to promote activities under the European Pact for Youth which was adopted at the 22-23 March 2005 European Council; endorses the view expressed by the Ministers of Culture meeting in Rotterdam in July 2004 that the budget for culture should be substantially increased;

External policies

71.  Welcomes in principle the simplification of financing instruments under Heading 4 but questions whether the number and breakdown proposed by the Commission is appropriate with respect to transparency, visibility and democratic scrutiny in the use of funds; considers particularly that:

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72.  Instructs its President to forward this resolution to the Council, the Commission and the other institutions and bodies concerned, as well as to the national governments and parliaments of the Member States.

(1) OJ C 172, 18.6.1999, p. 1. (2) 2 OJ C 310, 16.12.2004, p. 1. (3) 3 OJ L 253, 7.10.2000, p. 42. (4) 4 OJ C 104 E, 30.4.2004, p. 991. (5) 5 Texts Adopted, 15.9.2004, P6_TA(2004)0005. (6) 6 Texts Adopted, 2.12.2004, P6_TA (2004)0075. (7) Report presented in 1977 by a group of experts at the Commission's request. (8) OJ L 143, 30.4.2004, p. 46.

Financial Framework 2007-2013