Mr President, I am a somewhat unexpected rapporteur for this report. The report is in my name because the person who has done all the work on this, the standing rapporteur for the financial perspective, Mr Colom i Naval, decided after a lot of consideration that he could not present it to Parliament. I know his reasons why. I have spoken to him about them. I can respect those reasons but I am somewhat saddened that he is not giving this report instead of me. For the last three years the flexibility instrument has been the main aspect of the budget and it has overshadowed everything else. On this occasion we are using it for two programmes, as has been said by speakers before me. I do not have to outline what that is, but I have to outline one small problem which we have not yet resolved, that is, how the remaining money – the EUR 27 million for the reconversion of the Spanish fisheries fleet – will be found for the budget after next year. That remains an issue on which I am sure the Commission will be creative and inventive when it comes to next year's budget – to make sure that money can be found, because it is certainly expected. When the interinstitutional agreement was agreed, the flexibility instrument was one of the items which was reluctantly agreed by both sides – reluctantly from our side because there was a lot of resistance to the IIA anyway. Do not forget that it was passed in this Parliament by a simple majority, not by a qualified majority. That was an issue in itself. The Council did not really like this idea anyway. If I remember correctly it was the Commission that proposed it as a way out of the impasse. It is a good job that it was proposed because it has 'saved our bacon' for the last three years. In the first instance it was the great debate on how to fund Kosovo. The Council did not want to use it and we went to the wire, if you can remember that famous occasion in this Chamber when we each had two voting lists. Then last year it was on how to fund Serbia. That in itself was a problem and now on this occasion we have how to fund the reconversion of the fisheries fleet and also the cross-border initiatives. These last three years have shown the creaking structure of the financial perspective. I am sure that this is a point that Mr Colom i Naval would have made. We have a situation where the financial perspective has great problems with heading 3, heading 4 and certainly heading 5. Unless Parliament and Council begin to get some sort of agreement on how to fund these categories in the future, the consequences will be there for all to see. It is the consequences of pre-enlargement. It is not necessarily enlargement itself. The preparations for pre-enlargement will be as big a headache as the enlargement issue itself. We also have the needs of Afghanistan, or perhaps I should say the unknown needs of Afghanistan. What are we going to do about that? What are we going to do if we get a hoped-for peace agreement in the Middle East? Where is that money going to come from? There is no room at present in heading 4. I have heard rumours that the Commission may be proposing an extra flexibility instrument for heading 4. If it does, it will be a welcome addition, but whether it would be agreed by the Council is a different matter. This head-in-the-sand attitude cannot prevail if we are trying to be serious about how we manage the Union's budget and the taxpayers' expenses in the future. The negotiations with the Belgian presidency at the second conciliation were 100% better than the first conciliation, which was a waste of time, as I made known last time. At least this time it was good to do business with the Belgians, as it was last time when I was general rapporteur for the 1994 budget. There are areas where we have our differences, such as in heading 3 where we have always had difficulties. In heading 5, one of the main areas where we differ is in our support for the Commission on the reform programme, especially on the establishment plan and the posts that are needed. However, whilst we have agreed on the establishment plan, the Committee on Budgets voted for one third of those posts in reserve, albeit by a one-vote majority. The coordinators and the rapporteur are working very hard to try to ensure that we can get a position which will deliver a qualified majority on Thursday because if we do not, we may end up with the Council's position which would not aid the Commission's reform process as we would want it to do. I have seen the letter that Commissioners Schreyer, Kinnock and de Palacio have written, where they state that the conditions for release of the reserve have been met. If I was not the chairman of the Committee on Budgets I would say that I agree with those sentiments, but since I am the chairman of the Committee on Budgets I could not possibly say any such thing. I would like you to know that hopefully, between the vote on Thursday and the not-too-distant future, we can all be in a position where we can see the Commission's proposals coming to fruition and we can get on with the job of making Europe the place that the citizens expect it to be and not associated with the great mystique that it represents for too many of them right now.

Political group: PSE