• Beginning of document
  
  
• PART I (continued):
  • F. Heading 3 (Internal Policies)
  • G. Heading 4 (External Action)
  • H. Heading 5 (Administrative expenditure)
  • I. Heading 6 (Reserves)
  • III - OWN RESOURCES AND BUDGETARY IMBALANCES
  • TABLE A: FINANCIAL PERSPECTIVE EU-15
  • TABLE B: FINANCIAL FRAMEWORK EU-21
• PART II - DECLARATION ON THE APPOINTMENT OF THE PRESIDENT OF THE COMMISSION
• PART III - STATEMENTS ON KOSOVO
• PART IV - OTHER DECLARATIONS

F. Heading 3 (Internal Policies)

59. The level for heading 3 should be fixed so that the main items of priority expenditure under this heading are maintained, taking account of programmes already decided by the Council and the Parliament. The level of commitments for the Union’s internal policies covered by heading 3 of the financial perspective should not exceed:

G. Heading 4 (External Action)

60. An appropriate balance should continue to be struck in the geographical distribution of the Union’s external commitments, taking account of the Union’s policy commitments, political priorities and countries with the greatest need. The level of commitments for the Union’s external policies covered by heading 4 of the financial perspective should not exceed:

H. Heading 5 (Administrative Expenditure)

61. Taking account of objective factors determining the current level of administrative expenditure, the constraints imposed on Member States’ administrative budgets and the savings which can be achieved by the introduction of new technologies, as well as improved building and human resource management, the level of commitments for the Union’s administrative expenditure over the period should not exceed:

62. The principle of budgetary discipline should apply equally to all institutions.

I. Heading 6 (Reserves)

Monetary reserve

63. The monetary reserve should be phased out by the end of 2002, as follows:

Emergency aid reserve

64. The provision for the emergency aid reserve should not exceed:

65. The level of commitment appropriations for heading 4 has been set taking account of the amount of the reduction in the reserve, in order to ensure that operational items under heading 4 do not draw on this reserve when the budget is being drawn up. This reserve should only be used for genuinely new and unforeseeable humanitarian aid requirements.

Loan guarantee reserve

66. Taking account of the target amount and provisioning rate foreseen in the revised loan guarantee fund regulation, on which political agreement already exists (cf. doc. 13261/98 ADD 5 Annex II), the provision for the loan guarantee reserve should not exceed:

III. OWN RESOURCES AND BUDGETARY IMBALANCES

Principles underlying the own resources system

67. The Union’s own resources system must ensure adequate resources for the orderly development of the Union’s policies, subject to the need for strict budgetary discipline. It should be equitable, transparent, cost-effective and simple. Pursuit of other goals, such as financial autonomy, should not undermine these four generally accepted objectives. The system must be based on criteria which best express each Member State’s ability to contribute.

Budgetary imbalances

68. While it is recognised that the full benefits of Union membership cannot be measured solely in budgetary terms, the Fontainebleau European Council acknowledged the possible existence of budgetary imbalances. These should, to the extent possible, be resolved by means of expenditure policy, although provision is made for the possibility of a correction for Member States sustaining a budgetary burden which is excessive in relation to their relative prosperity. The European Council acknowledges that there are various factors which act directly or indirectly on budgetary imbalances, such as the overall level of spending, the content of policy reforms, the composition of expenditure, and the own resources structure.

Steps to be taken

69. Bearing in mind the above principles, the European Council has decided on the following combination of measures for improving the equity of the financial framework starting in 2000.

Action on the expenditure side

70. The European Council has decided on a number of measures on the expenditure side with immediate effect, which will both secure the development of the Union’s policies in the forthcoming period, and pave the way for welcoming new Member States. The Union’s own resources ceiling shall remain at the current level of 1.27% of EU GNP. In agreeing a new financial perspective which will ensure similar budgetary rigour at the level of the Union as applied at national level, and that EU spending does not grow faster than national public expenditure, the Union’s overall level of spending will, as of now, be stabilised in a consolidated framework. In particular, a substantial, genuine and equitable CAP reform for the benefit of producers and consumers, within strict budgetary parameters and leading to degressive expenditure over the period, will make a significant contribution to the overall objective of achieving a more equitable financial framework.

Changes to the own resources decision

71. The own resources decision will be modified so that the ratification process can be completed to enable entry into force from the beginning of 2002. In order to continue the process of making allowance for each Member State’s ability to contribute and of correcting the regressive aspects of the current system for the least prosperous Member States, the maximum rate of call of the VAT resource will be reduced to 0.75% in 2002 and to 0.50% in 2004. Traditional own resources will be maintained, with the percentage retained by the Member States in the form of collection costs increasing to 25% with effect from 2001.

72. The UK abatement will remain. In accordance with the principles reflected in the conclusions of the 1988 Brussels and 1992 Edinburgh European Councils, its amount shall not include windfall gains from changes to the financing system. So technical adjustments in the new Own Resources Decision will, as before, neutralise windfall gains resulting from the progressive reduction of the VAT reserve and now from the increase in the percentage of Traditional Own Resources retained by Member States to cover their collection costs. Similarly, at the time of enlargement, an adjustment will reduce "total Allocated Expenditure" by an amount equivalent to the annual pre-accession expenditure in the acceding countries, thereby ensuring that expenditure which is unabated now remains unabated.

73. The overall impact of these two effects is estimated at 220 million euros by 2006.

74. The financing of the UK abatement by other Member States will be modified to allow Austria, Germany, the Netherlands and Sweden to see a reduction in their financing share to 25% of the normal share. The adjustment of the financing shares will take place through an adjustment of the GNP bases. These modifications will be implemented already during the first year of application of the new Own Resources Decision on the basis of the figures for the previous year.

75. When referring to budgetary imbalances, the Commission, for presentational purposes, will base itself on operational expenditure.

76. The European Council invites the Commission to undertake a general review of the own resources system, including the effects of enlargement, before 1 January 2006. As part of this review, the question of creating new autonomous own resources should also be addressed.

TABLE A: FINANCIAL PERSPECTIVE EU-15

TABLE B: FINANCIAL FRAMEWORK EU-21

PART II - DECLARATION ON THE APPOINTMENT OF THE PRESIDENT OF THE COMMISSION

I. The Heads of State or Government have noted with respect the resignation of the Commission and expressed their thanks for the work done for Europe.

They decided by common accord to ask Mr Romano PRODI to accept the important task to be the President of the next European Commission.

In accordance with the procedures of the Amsterdam Treaty, this decision shall be communicated to the present European Parliament for approval. After this approval, Mr PRODI should strive to prepare the nomination of a new Commission as soon as possible, in cooperation with the Governments of the Member States. The Governments of the Member States shall, by common accord with Mr PRODI, nominate the other persons whom they intend to appoint as members of the Commission. After the June elections, the newly elected European Parliament should give its approval on both the President and the nominees for the Commission. The newly elected European Parliament should start on the procedure for appointing the new Commission as early as July. After approval by the newly elected European Parliament, the President and the other members of the Commission shall be appointed by common accord of the Governments of the Member States. The European Council wishes to enable the new Commission to start work at the earliest opportunity and to continue that work with a full mandate as from January 2000 for the next five years.

II. The European Union needs, as soon as possible, a strong Commission capable of taking action, while respecting the rule of openness and closeness to the citizens. Mr PRODI shall be asked to prepare a programme outlining the way in which the new Commission shall work. A first exchange of views on this reform programme will take place between the Heads of State or Government and Mr. PRODI in a few weeks and, in any case, before his approval by the present European Parliament.

The new Commission should speedily put into effect the necessary reforms, in particular for the improvement of its organisation, management and financial control.

In order to do this, the next Commission ought to give urgent priority to launching a programme of far reaching modernisation and reform. In particular, all means should be used in order to ensure that whenever Community funds, programmes or projects are managed by the Commission, its services are suitably structured to ensure highest standards of management integrity and efficiency.

PART III - STATEMENTS ON KOSOVO

STATEMENT BY THE EUROPEAN COUNCIL CONCERNING KOSOVO

The European Council is deeply concerned about the failure of the mediation efforts undertaken by Ambassador Holbrooke and the three Rambouillet Process negotiators, Ambassadors Hill, Majorski and Petritsch with the President of the Federal Republic of Yugoslavia, Slobodan Milosevic. The common objective of these efforts was to persuade the Federal Republic of Yugoslavia to accept a ceasefire in the Kosovo and a political solution to the Kosovo conflict, in order to stop a humanitarian catastrophe in Kosovo.

Over one quarter of a million of Kosovars are now homeless because of the repression carried out by Belgrade's security forces. 65 000 have been driven from their homes in the last month, 25 000 since the peace talks broke down in Paris last Friday. While the Kosovo Albanians signed the Rambouillet Accords, Belgrade's forces poured into Kosovo to start a new offensive. Since the outbreak of hostilities in Kosovo in March 1998 around 440,000 people, more than one fifth of the population of Kosovo, have fled or been displaced. There are new victims every day. The civilian population is the target of the hostilities.

The international community has done its utmost to find a peaceful solution to the Kosovo conflict. In Rambouillet, and most recently in Paris, intensive efforts have been made after months of preparations to negotiate an agreement for the self-government of Kosovo which is fair for both parties to the conflict and which would ensure a peaceful future for Kosovo Serbs as well as Kosovo Albanians and all other national communities. The draft agreement, which was signed by the Kosovo Albanians in Paris, meets these requirements: on the basis of the sovereignty and territorial integrity of Yugoslavia it assures Kosovo a high degree of self-government, guarantees the individual human rights of all citizens in Kosovo according to the highest European standards, envisages extensive rights for all national communities living in Kosovo and creates the basis for the necessary reconstruction of the war-torn region.

The Yugoslav leadership under President Milosevic has persistently refused to engage seriously in the search for a political solution. It has presented the Yugoslav people with a distorted picture of the issues and course of the negotiations. In addition, the Serb police and Yugoslav Federal Armed Forces have in the last few weeks massively reinforced their presence in Kosovo, thereby further exceeding the ceilings set out in the Holbrooke-Milosevic agreement of 12 October 1998. Finally, the Yugoslav security forces are conducting military operations against the civilian population in Kosovo in contravention of the provisions of UN Security Council resolution 1199.

On the threshold of the 21st century, Europe cannot tolerate a humanitarian catastrophe in its midst. It cannot be permitted that, in the middle of Europe, the predominant population of Kosovo is collectively deprived of its rights and subjected to grave human rights abuses. We, the countries of the European Union, are under a moral obligation to ensure that indiscriminate behaviour and violence, which became tangible in the massacre at Racak in January 1999, are not repeated. We have a duty to ensure the return to their homes of the hundreds of thousands of refugees and displaced persons. Aggression must not be rewarded. An aggressor must know that he will have to pay a high price. That is the lesson to be learnt from the 20th century.

Nor will the international community tolerate crimes against humanity. Those now persisting with the conflict in Kosovo should not forget that the mandate of The Hague Tribunal covers Kosovo. They and their leaders will be held personally accountable for their actions.

In the final analysis, we are responsible for securing peace and cooperation in the region. This is the way to guarantee our fundamental European values, i.e. respect for human rights and the rights of minorities, international law, democratic institutions and the inviolability of borders.

Our policy is neither directed against the Yugoslav or Serb population nor against the Federal Republic of Yugoslavia or the Republic of Serbia. It is directed against the irresponsible Yugoslav leadership under President Milosevic. It is directed against security forces cynically and brutally fighting a part of their own population. We want to put an end to these outrages. President Milosevic must stop Serb aggression in Kosovo and sign the Rambouillet Accords, which include a NATO-led implementation force to provide stability.

We urge the Yugoslav leadership under President Milosevic to summon up the courage at this juncture to change radically its own policy. It is not yet too late to stop the internal repression and to accept the international community's mediation efforts. The international community's only objective is to find a political future for the Kosovo, on the basis of the sovereignty and territorial integrity of the Federal Republic of Yugoslavia, which does justice to the concerns and aspirations of all the people in the Kosovo.

The Kosovo Albanians showed their commitment to a peaceful solution by signing the Rambouillet Accords. It is vital that they now show maximum restraint.

We underline that it is not our aim to keep the Federal Republic of Yugoslavia in its self-imposed isolation in Europe and the world. On the contrary, we would like to end the isolation of the Federal Republic of Yugoslavia in Europe. But for this to happen, Milosevic must choose the path of peace in Kosovo and the path of reform and democratisation, including freedom of the media in the whole of Yugoslavia.

STATEMENT BY THE EUROPEAN COUNCIL ON KOSOVO

The European Council in its declaration earlier today set out the efforts which the international community had made to avoid the need for military intervention. We urged the Yugoslav leadership under President Milosevic to summon up the courage at this juncture to change radically its own policy. Now the North Atlantic Alliance is taking action against military targets in the Federal Republic of Yugoslavia in order to put an end to the humanitarian catastrophe in Kosovo.

The Federal Republic of Yugoslavia is now facing the severest consequences, about which it was repeatedly warned, of its failure to work with the international community for a peaceful settlement of the Kosovo crisis. President Milosevic must now take full responsibility for what is happening. It is up to him to stop the military action by immediately stopping his aggression in Kosovo and by accepting the Rambouillet Accords.

PART IV - OTHER DECLARATIONS

MIDDLE EAST PEACE PROCESS

The Heads of State and Government of the European Union reaffirm its support for a negotiated settlement in the Middle East, to reflect the principles of "land for peace« and ensure the security both collective and individual of the Israeli and Palestinian peoples. In this context, the European Union welcomes the decision by the Palestinian National Union and associated bodies to reaffirm the nullification of the provisions in the Palestinian National Charter which called for the destruction of Israel and to reaffirm their commitment to recognize and live in peace with Israel. However, the European Union remains concerned at the current deadlock in the peace process and calls upon the parties to implement fully and immediately the Wye River Memorandum.

The European Union also calls upon the parties to reaffirm their commitments to the basic principles established within the framework of Madrid, Oslo and subsequent agreements, in accordance with UNSC Resolutions 242 and 338. It urges the parties to agree on an extension of the transitional period established by the Oslo agreements.

The European Union calls in particular for an early resumption of final status negotiations in the coming months on an accelerated basis, and for these to be brought to a prompt conclusion and not prolonged indefinitely. The European Union believes that it should be possible to conclude the negotiations within a target period of one year. It expresses its readiness to work to facilitate an early conclusion to the negotiations.

The European Union urges both parties to refrain from activities which prejudge the outcome of those final status negotiations and from any activity contrary to international law , including all settlement activity, and to fight incitement and violence.

The European Union reaffirms the continuing and unqualified Palestinian right to self-determination including the option of a state and looks forward to the early fulfilment of this right. It appeals to the parties to strive in good faith for a negotiated solution on the basis of the existing agreements, without prejudice to this right, which is not subject to any veto. The European Union is convinced that the creation of a democratic, viable and peaceful sovereign Palestinian State on the basis of existing agreements and through negotiations would be the best guarantee of Israel's security and Israel's acceptance as an equal partner in the region. The European Union declares its readiness to consider the recognition of a Palestinian State in due course in accordance with the basic principles referred to above.

The European Union also calls for an early resumption of negotiations on the Syrian and Lebanese tracks of the Middle East Peace Process, leading to the implementation of UNSCRs 242, 338 and 425.

SOUTH AFRICA

The European Council approved the Trade and Cooperation Agreement with South Africa which has been under negotiation for some time. It welcomed this historic moment and instructed the Council to take urgently the necessary measures for its formal adoption. The Agreement is an important further step in the consolidation and strengthening of the solid partnership which exists between the European Union and South Africa in the political, economic and trade fields. The European Council considers this historic Agreement a symbol of the strong links of friendship and solidarity between the peoples of Europe and Southern Africa.

ENLARGEMENT

In light of the outcome on Agenda 2000 on 24/25 March, the European Council wishes to send a message of reassurance to the countries negotiating for accession. Enlargement remains a historic priority for the European Union. The accession negotiations will continue each in accordance with its own rhythm and as rapidly as possible. It calls on the Council and the Commission to ensure that the pace of the negotiations is maintained accordingly.

© European Parliament: 1999