Local view for "http://purl.org/linkedpolitics/eu/plenary/2004-09-14-Speech-2-089"
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Madam President, Mr President-in-Office of the Council, Mr Lewandowski, Mr Garriga, ladies and gentlemen, budgets always involve a tight and busy work schedule, and it is therefore entirely typical that an important budget debate should take place at the first normal plenary session of the new Parliament. It is the debate on the budget for 2005, or what will be the enlarged Union’s first full budget year, and above all the first budget to be debated and adopted by 25 Member States, and adopted by MEPs from 25 Member States.
Over the past few years there have indeed been repeated instances where Member States themselves have overestimated their capacities to use structural funds. This year, however, it appears that they have underestimated their own capacities, and at any rate we currently have a significantly higher implementation rate for structural funds than last year. By late August we had already spent 67% of funds, whereas last year the figure was only 44%, and this has meant that my fellow-Commissioner Mr Barrot has already asked for additional funds.
Over the coming weeks we will examine whether reallocations are possible within the Budget, but at least one thing is clear, and I must make this perfectly plain to the Council: either we need additional funding before the end of 2004, or we must make sure that sufficient funds are provided in 2005.
It is simply out of the question for cuts to be made in this field. The n+2 rule, of which you are also aware, means that we must make sure that the Budget contains sufficient funds to cover requests for payment as they are made. In view of this development, I can only agree with Parliament’s rapporteur, Mr Garriga, who has also stated clearly in his report that we must use the figures of the preliminary draft budget.
At this point I would like to comment very briefly on the debate that was recently opened on whether structural funds should be cut for new Member States which lower their company tax rates considerably. In response to this, I can only stress that this proposal is unacceptable, and really quite unjustified. Firstly, with the exception of advance payments, no structural funds have been received by the new Member States. Secondly, each new Member State will have to contribute cofinancing in order to claim any structural funds at all. In principle, this means that the need for national public funds has increased rather than been reduced. This is something that we must also take into account.
Thirdly, it is in any case impossible to simply compare tax rates without taking into account the width of the tax base used in calculations. Many reforms in the new Member States have in fact been aimed at removing exemptions from the tax base, or rather at closing tax loopholes. All these issues must be taken into consideration.
Fourthly, the new Member States need help to enable them to bridge the large economic gap. We should not start to question the spirit of solidarity, which has always been a cornerstone of the European Union and must continue to be one, only a few months after enlargement, which was such a wonderful historical event.
Turning to internal policies, I would particularly like to emphasise a point which is always important for Parliament with regard to the pilot projects and preparatory actions. I can assure Parliament that we are in the process of improving dialogue between the Commission and Parliament on this issue, and we will shortly provide you with an update on their implementation.
As far as foreign policy is concerned, the available budget is currently undergoing a reduction in real terms as a result of the provisions of Agenda 2000. Not only, though, is there the political will to jointly take on more responsibility in the world, but we are also, in fact, constantly faced with new challenges. In the past few years we have always, in our budgets, managed to find the right responses to challenges, and I am optimistic and confident that we will also succeed in doing so in 2005.
In the past few years we have had to make use of the flexibility instrument on several occasions, and I believe that this will continue to be the case in 2005. Since the Commission submitted the preliminary draft budget, the Council, and in particular the European Council, has taken further political decisions with implications for the Budget. These include, firstly, the political decision to open accession negotiations with Croatia, which will affect the Budget, and, secondly, the quite justified political decision to provide financial assistance to the Turkish Cypriot community. That, too, of course, will affect the Budget. According to the Commission proposal, both decisions will have implications for heading 7, pre-accession aid, but also for heading 4, where more funds will also need to be released.
We will, in the next few weeks, submit letters of amendment on the 2005 preliminary draft budget to Parliament and the Council regarding this issue, and I hope that this will enable us to reach a positive decision both on heading 7 and on heading 4, external policy expenditure.
The priorities for this budget are clear to the Commission. Firstly, the integration of the new Member States must be promoted. Secondly, the forces of growth within the Community and cohesion in the enlarged Union must be strengthened. We should live up to our heightened responsibility in the world, and unfortunately we have no choice but to place the fight against terrorism at the very top of the agenda.
I am also optimistic with regard to administrative expenditure. This still has to be negotiated, but in recent years it has been possible to achieve compromise, and this will also be the case for next year. I agree with you entirely, Mr President-in-Office of the Council, that use of the flexibility instrument for administrative expenditure should be out of the question. We must therefore make every effort to find the necessary funds.
I was of course pleased on behalf of the Commission at the Council’s proposal to allow the Commission 680 extra posts next year for enlargement. Yet at the same time you have not granted the funds necessary to pay the new staff, which means that we would be forced to introduce a new European Volunteer Service in the Commission. I am not sure the trade unions and others would agree to this, and we must therefore continue to strive towards the provision of appropriate funding.
To return to the key figures: the Council is proposing a budget of EUR 116 billion for commitment appropriations and of EUR 105 billion for payment appropriations, which means a discrepancy of EUR 11 billion. I refer to this again because a number of Members have said in the debate on the next Financial Perspective that the Commission was allowing for too large a discrepancy, whereas the one we have proposed is in fact smaller than that in the Council’s preliminary draft budget. Further debate will be necessary on this issue. I also hope that the President-in-Office of the Council will not conduct the 2005 budget debate along ideological lines with regard to the 1.0% issue. The Dutch are well known, and rightly so, for acting in a very pragmatic and realistic manner, and I hope we will draw up a Budget which makes the necessary funding available for Community policies.
Parliament’s first reading will take place in late October, and I am glad that the debate on the reading will be one of my last official duties. In the meantime, we will of course devote a great deal of energy to achieving another firm basis for a good compromise on the 2005 budget.
Mr President-in-Office of the Council, you have presented the key elements of the Council’s draft budget and the outcome of the Council’s first reading. I would like to go over the key figures of the Commission’s preliminary draft budget once again. We had proposed a budget volume for 2005 of EUR 109.5 billion, which would correspond to 1.03% of the gross national product of the enlarged Union. Agenda 2000, which is the current Financial Perspective, provides for a much higher figure for the 2005 budget year, namely 1.08% of combined economic output. If you also take into account the fact that the European Development Fund is currently outside the budget and must be funded in addition, an actual figure of 1.11% is reached for financial programming for 2005. I mention this now because a decision must be taken on whether the Commission’s proposals for the next period are really such a dramatic increase. The figure of 1.11% in financial programming should therefore be compared with our proposal of 1.14% for 2007 and following years.
Today we are not talking about financial programming for the immediate future, but about the 2005 Budget, which is the first to include direct aid to farmers in the new Member States. This is a result of the time lag which exists in the field of agriculture, whereby expenditure takes place one year later. This is therefore the first time that direct aid to farmers in the new Member States is contained in the Budget.
There is a very sharp rise in overall expenditure on agriculture for 2005, of a total of EUR 4 - 4.5 billion according to the Commission’s preliminary draft budget, and EUR 3.5 billion even according to the Council’s draft budget. This is mainly due to enlargement, but I must point out that EUR 240 million of the increase is entirely attributable to changes in the euro/dollar exchange rate. Most importantly, the effect of the decisions made by the Council of Agriculture Ministers on agricultural reform will not be to reduce expenditure on agriculture next year, but to increase it. We must therefore also take the Council’s decisions into account, and of course I am emphasising this in the context of the comments that are often made to the effect that it is only the Commission and Parliament that propose increases in this area. We are often forced to incorporate the Council’s decisions into the Budget.
The Council is now proposing a EUR 1 billion reduction in spending on agriculture, although it remains to be seen whether this can be put into practice. As always, we will present updated estimates for agricultural expenditure in October, and it is then usually agreed that the new estimates should be used.
I must now go into a little more detail with regard to the Structural Funds. The Commission has proposed a considerable increase in payment appropriations for 2005, as well as an increase in commitment appropriations. The Council has not made any cuts to commitment appropriations, and indeed it cannot do so, as everything in this area has been laid down, on the one hand by Agenda 2000 and on the other by the accession treaties. No changes can therefore be made to commitment appropriations.
With regard to the issue of how many payment appropriations we will need next year, the Council believes that we can make do with EUR 3 billion less than the figure proposed by the Commission.
I must however point out that in 2005 we will be in the sixth year of the new programme, and we need more payment appropriations because the implementation of Structural Funds programmes is finally in full swing."@en1
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