The European Parliament,

–  having regard to the European Union general budget for the financial year 2008(2),

–  having regard to the final annual accounts of the European Communities for the financial year 2008 – Volume I (C7-0174/2009)(3),

–  having regard to the Council's annual report to the discharge authority on internal audits carried out in 2008,

–  having regard to the Annual Report of the Court of Auditors on the implementation of the budget concerning the financial year 2008, together with the institutions’ replies(4),

–  having regard to the statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors pursuant to Article 248 of the EC Treaty(5),

–  having regard to Article 272(10) and Articles 274, 275 and 276 of the EC Treaty and Article 314(10) and Articles 317, 318 and 319 of the Treaty on the Functioning of the European Union,

–  having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities(6), and in particular Articles 50, 86, 145, 146 and 147 thereof,

–  having regard to Decision No 190/2003 of the Secretary-General of the Council/High-Representative for the Common Foreign and Security Policy concerning reimbursement of travel expenses of delegates of Council Members(7),

–  having regard to the Interinstitutional Agreement between the European Parliament, the Council and the Commission, of 17 May 2006, on budgetary discipline and sound financial management(8) (IIA),

–  having regard to its resolution of 25 November 2009 with observations forming an integral part of the Decision on discharge in respect of the implementation of the European Union general budget for the financial year 2007, Section II – Council(9),

–  having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

–  having regard to the report of the Committee on Budgetary Control (A7-0096/2010),

A.  whereas the Council, represented by the Spanish Presidency, has agreed to reassess the alleged Gentlemen's Agreement dating back to 1970,

B.  whereas ’citizens have the right to know how their taxes are being spent and how the power entrusted to political bodies is handled’(10),

C.  whereas the conclusions of the European Council of Cologne of 3 and 4 June 1999 envisage giving operational capacities to the Council in the field of a strengthened common European security and defence policy (CESDP),

D.  whereas Council Decision 2004/197/CFSP(11) of 23 February 2004 established a mechanism for administering the financing of the common costs of EU operations having military or defence implications, called ATHENA, and whereas that Decision, together with the Decision 2004/582/EC of the Representatives of the Governments of the Member States, meeting within the Council of 28 April 2004 concerning privileges and immunities granted to ATHENA(12), grants privileges and immunities to ATHENA and gives operational power to the Council,

E.  whereas Council Decision 2000/178/CFSP of 28 February 2000 on the rules applicable to national experts in the military field on secondment to the General Secretariat of the Council during the interim period(13) and Council Decision 2001/80/CFSP of 22 January 2001 on the establishment of the Military Staff of the European Union(14) specify that expenditure arising from the secondment of military experts is to be charged to the Council budget,

1.  Notes that in 2008 the Council had available commitment appropriations amounting to a total of EUR 743 million (2007: EUR 650 million), with a utilisation rate of 93,31 %, considerably higher than in 2007 (81,89 %), but still below the average of the other institutions (95,67 %);

2.  In view of the problems encountered in the 2007 and 2008 discharge procedures, reaffirms its position taken in its decision of 25 April 2002 on discharge in respect of the financial year 2000(15) that ’[...] the European Parliament and the Council have not, in the past, scrutinised the implementation of their respective sections of the budget; considers that in view of the increasingly operational nature of expenditure, financed under the Council's administrative budget, in the fields of foreign affairs, security and defence policy, and justice and home affairs, the scope of this arrangement should be clarified with a view to distinguishing traditional administrative expenditure from operations in these new policy areas’;

3.  Considers that in view of the increases in administrative expenditure and especially due to the possible presence of expenditure of an operational nature, the expenditure of the Council ought to be scrutinised in the same way as that of the other EU institutions as part of the discharge procedure provided for by Article 319 of the Treaty on the Functioning of the European Union;

4.  Considers that such scrutiny is based on the following written documents submitted by all institutions:

5.  Expects the future presence of all institutions, represented at appropriate level, during the plenary debate on discharge;

6.  Rejects the Council's suggestion that the fact that Parliament and the Council have not, in the past, scrutinised the implementation of their respective sections of the budget was the result of a ’Gentlemen's agreement’ (Resolution recorded in the minutes of the Council meeting of 22 April 1970); considers the Gentlemen's Agreement not to be a binding document, and the interpretation attributed to it by the Council to be exceedingly wide;

7.  Believes that the preparation of the budget and the discharge of the budget are two separate procedures and that the Gentlemen's Agreement between Parliament and the Council over the preparation of their respective sections of the budget must not absolve the Council of its responsibility to be fully accountable to the public for the funds placed at its disposal;

8.  Believes that the 2008 discharge takes place at a crucial time, when a formal agreement on the discharge process for the new European External Action Service (EEAS) must be set out clearly to ensure credibility through full transparency, and calls on Council to ensure that it submits to Parliament, before the end of the 2008 discharge procedure, concrete, detailed and all-encompassing plans for the staffing, organisational and control structures of the EEAS, including EU military staff, the Situation Centre, the GSC´s Crisis Management and Planning Directorate, the Civilian Planning and Conduct Capability, as well as all staff in the General Secretariat working on Foreign and Security Policy, showing in particular the increase and allocation of staff and the budgetary implications provided for and to immediately take part in the negotiations with the budgetary authority on the basis of the proposals submitted;

9.  Stresses that this year's granting of discharge cannot be taken into account for granting of discharge in the years to come unless the Council makes considerable progress in the areas of concern referred to in paragraph 5 of Parliament's resolution of 25 November 2009;

10.  Reiterates that Council should be present at the Parliament for the presentation of the Court of Auditors’ Annual Report and for the budget discharge debate each year;

11.  Calls on the Council together with the European Parliament, in their capacity as joint budgetary authorities, to establish, with a view to improving the exchange of information on their respective budgets, an annual procedure within the discharge procedure; under this procedure, the President of the Council, accompanied by the Secretary-General of the Council, would meet officially with the Committee on Budgetary Control or a delegation thereof made up of its chair, the coordinators and the rapporteur, with a view to providing all the information needed regarding the execution of the Council's budget; suggests also that the chair of the competent committee should regularly and in an appropriate form provide that committee with information regarding those discussions;

12.  Encourages the Spanish Presidency to review the informal arrangement covering the Council budget discharge and calls for an undertaking for this to be included in the review of the Financial Regulations and to be in place for the start of the new financing period after 2013 and calls for discussions to be concluded before 15 October 2010;

13.  Reminds the Council of its position as expressed in paragraph 12 of its resolution of 24 April 2007(16) on the discharge for the financial year 2005, as follows: ’Calls for maximum transparency in the area of Common Foreign and Security Policy (CFSP); requests the Council, in accordance with point 42 of the Interinstitutional Agreement [...], to make sure that no operating CFSP expenditure appears in the Council's budget; reserves the right to take the necessary steps, where appropriate, if the agreement is infringed’;

14.  Acknowledges the fact that the Council has provided for various formats for consulting and keeping Parliament informed on the development of the CFSP; considers, however, that the annual report from the Council on the main aspects and basic choices of the CFSP, presented to Parliament in application of point 43 of the IIA, is restricted in its scope to a description of CFSP common positions, joint actions and implementing decisions and that more extensive information should be provided in future years for the discharge exercise;

15.  Reiterates its request to the Council to provide detailed information on the nature of expenses, within its Title 3 (Expenditure arising out of the institution's performance of its specific missions), in order to enable Parliament to verify that all the expenditure is in conformity with the IIA and that none of the expenditure is of an operational nature;

16.  Is concerned by the lack of transparency of the cost incurred by the activities, in particular the missions carried out by the special representatives and asks for a detailed breakdown of the expenditure of the special representatives and their missions budget to be published on the internet;

17.  Asks the Court of Auditors why there is no mention of the unresolved problems, as pointed out in Parliament's above-mentioned resolution of 25 November 2009, in its Annual Report on 2008 concerning the Council;

18.  Notes the comment made by the Court of Auditors in paragraph 11.10 of its 2008 Annual report on the lack of compliance with the provisions of Article 5(3) of the Financial Regulation as regards continued (2005–2008) over-budgeting of the Secured European System of Automatic Messaging (SESAME); takes note of the Council's reply and its intention to improve the coordination on structures for the governance of major IT projects;

19.  Welcomes the audits carried out by the Council's internal audit service in 2008 (eight financial audits and one mixed audit), as well as the considerable share of their recommendations which have been accepted; points out, however, that the note on this issue which was submitted to the discharge authority was of a rather general nature, and requests more detailed information on the implementation of audit recommendations;

20.  Welcomes the new integrated system for management and financial control (SAP), in operation since 1 January 2008, which has enabled budget savings and gains in efficiency to be made for the three institutions involved (the Council, the Court of Auditors and the Court of Justice);

21.  Welcomes the achievements on consolidation of the organisation after the EU enlargements of 2004 and 2007, notably centralisation of the translation units and the recruitment of officials from the new Member States; welcomes also the introduction of the flexible time system, which contributes to a better balance between work and private life; notes, however, the low occupancy rate of the posts in the establishment plan (on average 90 %; in 2007 – 86 %);

22.  Notes that the considerable increase in advance payments for the Residence Palace (EUR 70 million instead of EUR 15 million as envisaged, with an aim of subsequent reduction of the overall cost of the acquisition) was made possible by the global under-spending of the budget (85,7 % implementation rate), and calls for buildings policy to be detailed in future annual reports to allow proper scrutiny in the discharge process;

23.  Is of the opinion that the annual budget for the permanent President of the European Council should be separated from the Council's budget and presented as a new budget section as from 2012;

24.  Welcomes the undertakings of the Spanish Presidency on clarification of the discharge procedure to show full accountability of the Council's administrative budget to Parliament, and asks for a firm commitment of the successive presidencies to carry on with this work in the same spirit.

(1) Texts adopted, 19.5.2010, P7_TA(2010)0180. (2) OJ L 71, 14.3.2008. (3) OJ C 273, 13.11.2009, p. 1. (4) OJ C 269, 10.11.2009, p. 1. (5) OJ C 273, 13.11.2009, p. 122. (6) OJ L 248, 16.9.2002, p. 1. (7) Decision stemming from the Rules of Procedure of the Council of 22 July 2002 (OJ L 230, 28.8.2002, p. 7). (8) OJ C 139, 14.6.2006, p. 1. (9) OJ L 19, 23.1.2010, p. 9. (10) The European Transparency Initiative. (11) OJ L 63, 28.2.2004, p. 68. (12) OJ L 261, 6.8.2004, p. 125. (13) OJ L 57, 2.3.2000, p. 1. (14) OJ L 27, 30.1.2001, p. 7. (15) OJ L 158, 17.6.2002, p. 66. (16) OJ L 187, 15.7.2008, p. 21.