EN Official Journal of the European Union CE 117/95

Wednesday 25 March 2009

Mid-term Review of the 2007-2013 Financial Framework

P6_TA(2009)0174

European Parliament resolution of 25 March 2009 on the Mid-Term Review of the 2007-2013 Financial Framework (2008/2055(INI))

2010/C 117 E/16

The European Parliament,

having regard to the EC Treaty and in particular Articles 268 to 280 thereof,

having regard to the ongoing ratification process of the Treaty of Lisbon,

having regard to the Interinstitutional Agreement (IIA) of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (1),

having regard to its resolution of 8 June 2005 on Policy Challenges and Budgetary Means of the enlarged Union 2007-2013 (2),

having regard to the Commission working document of 3 November 2008 on Reforming the Budget, Changing Europe (SEC(2008)2739),

having regard to the results of the Conference on Reforming the Budget, Changing Europe hosted by the Commission on 12 November 2008,

having regard to its resolutions of 13 December 2007 on the 2008 draft general budget of the European Union (all sections) (3) and of 18 December 2008 on the 2009 draft general budget of the European Union (all sections) (4),

having regard to its resolution of 29 March 2007 on the future of the European Union's own resources (5),

having regard to its resolution of 12 December 2007 on the amended proposal for a decision of the European Parliament and of the Council amending the Interinstitutional Agreement of 17 May 2006 on budgetary discipline and sound financial management as regards the multiannual financial framework (6),

having regard to its position of 4 December 2008 on the proposal for a regulation of the European Parliament and of the Council establishing a facility for rapid response to soaring food prices in developing countries (7),

having regard to its resolution of 21 February 2008 on the fourth report on economic and social cohesion (8),

having regard to its resolution of 12 March 2008 on the CAP ‘Health Check’ (9),

having regard to the conclusions of the European Councils of 15-16 December 2005, 21-22 June 2007 and 11-12 December 2008,

having regard to the response by the European Court of Auditors to the Commission's communication ‘Reforming the Budget, Changing Europe’ (SEC(2007)1188),

having regard to Rule 45 of its Rules of Procedure,

having regard to the report of the Committee on Budgets and the opinions of the Committee on Foreign Affairs, the Committee on Development, the Committee on Budgetary Control, the Committee on Industry, Research and Energy, the Committee on Regional Development and the Committee on Agriculture (A6-0110/2009),

A. whereas the European Parliament, the Council and the Commission agreed on the IIA of 17 May 2006 on budgetary discipline and sound financial management (‘IIA of 17 May 2006’) following intense negotiations based on the European Parliament's negotiating position of 8 June 2005, which was based on an in-depth analysis of the needs in order to identify political priorities, and on the agreement achieved by the Member States in 2005,

B. whereas the IIA of 17 May 2006 provides that the Commission will report on the functioning of the IIA by the end of 2009 and invites the Commission to undertake a full wide-ranging review covering all aspects of EU spending, including the Common Agricultural Policy and resources, including the UK rebate, and to report in 2008-2009,

C. whereas the Commission launched a wide public consultation in September 2007, to which more than 300 contributions were made, and hosted a conference ‘Reforming the Budget, Changing Europe’ on 12 November 2008 which marked the first step of the review process,

D. whereas the Commission intends to present a Communication outlining the main orientations that should design the next financial framework at the latest in Autumn 2009 and should present a report on the functioning of the IIA of 17 May 2006 (step two of the process) while the proposals for the next multiannual financial framework (MFF) and IIA will be made by the next Commission (step three) in the course of 2010,

E. whereas the ratification process of the Treaty of Lisbon is not yet completed,

F. whereas the financial provisions of the Treaty of Lisbon provide that the MFF will have legally binding status under the Treaty on the Functioning of the European Union and have a duration of ‘at least 5 years’,

G. whereas the Treaty of Lisbon provides for an extension of competences of the European Union, the consequences of which might be reflected in a number of new policies for which appropriate legal bases and financing might be necessary,

H. whereas the institutions should ensure that the calendar of the next financial framework allows for democratic legitimacy and matching of the Commission and Parliament mandates as far as possible, considering a possible prolongation and adjustment of the current MFF until 2015/2016,

I. whereas the designation of a new Commission and the hearings due to take place in this context should be an opportunity for the newly elected Parliament to question and evaluate the new Commissioners on their respective policy priorities and the budgets deemed necessary for that purpose,

J. whereas the mid-term evaluation of the ongoing legislative programmes, due in 2010-2011, should represent a major basis for a future assessment of ongoing programmes and future priorities, and should be duly taken into account in the context of a possible prolongation and adjustment of the current financial framework until the end of 2015/2016,

1. Recalls that Parliament has intensively contributed to the setting-up of the 2007-2013 MFF and IIA of 17 May 2006 while, in parallel, allowing the continuity of Community legislation through the launching of a huge number of multiannual programmes; thinks that most of the recommendations of the Parliament's report are still valid because they were based on a bottom-up approach that linked tasks and promises with the necessary budgetary means; in this context, is of the opinion that some broad principles and orientations based on past experience should be transmitted to the incoming Parliament;

A three-step approach

2. Welcomes the initiative taken by the Commission in organising a broad open consultation seeking to find new ideas and emerging trends; recalls, however, that, within the bounds of the institutional prerogatives which each institution enjoys, Parliament is entitled to explore other solutions and lines of thought on the basis of consultations and hearings it has planned itself;

3. Considers that, over the last two years following the entry into force of the current MFF (2007-2013) and of the IIA of 17 May 2006, some progress has been made on the three pillars developed by Parliament in its resolution of 17 May 2006 on the conclusion of an interinstitutional agreement (10): matching political priorities and financial needs, modernising the budget structure and improving the quality of implementation of the EU budget; notes nevertheless that there is still space for improvement like fulfilling the then agreed ‘déclaration d'assurance’ (DAS), simplification of rules and improvement of the use of already provided-for but highly under-implemented funds;

4. Recalls its awareness of the fact that a number of deficits remained unresolved in the final agreement - such as the introduction of regional and national management declarations; stresses that the need for additional financing for EU political priorities, notably for Galileo, the European Institute of Technology and the food facility arose and a solution was found through the use of the existing instruments of the IIA of 17 May 2006; notes that the Council itself has been unable to implement the European Council’s agreement seeking to allocate EUR 5 000 000 000 from the EU budget to the economic recovery and support programme; believes that further adjustments within the current MFF and IIA based on a sufficient and ambitious review will be necessary;

5. Points out that a distinction should be made between the review of certain programmes within the current MFF based on the mid-term evaluation of legislation to take place in 2010-2011, the existing challenges resulting from the insufficient financing of heading 4 and heading 1a, and the new challenges such as energy, climate change, citizenship, freedom, security and justice, the fight against organised trans-border crime, Common Foreign and Security Policy (CFSP) and other policies linked to the new competences provided by the Treaty of Lisbon and the preparation of the new MFF; stresses that a prolongation of the present MFF makes an ambitious mid-term review an even more necessary precondition;

6. Stresses that the current context and a number of uncertainties linked to the ratification process of the Treaty of Lisbon on the one hand, and, on the other, the end of the current parliamentary term, the outcome of the European elections and the setting-up of the new Commission in the current economic context, will not permit detailed positions aiming at an ambitious review to be taken in the coming months; stresses, though, that an ambitious review should be an urgent priority for the new Parliament and Commission;

7. Is therefore of the opinion that a realistic mid-term review should develop in three steps: (a) (i) resolving deficits and left-overs in the context of the annual budgetary procedures, if possible through more flexibility and, if necessary, using part of the margin left below the own resources ceiling, (ii) assessment of the mid-term evaluation, (b) (i) preparation of a possible adjustment and prolongation of the current MFF until 2015/2016 in order to allow for a smooth transition for a system of an MFF of five years’ duration which gives to each Parliament and each Commission, during each of their respective terms of office, the political responsibility for each MFF, (ii) possible adjustments and prolongation of the current programmes as provided for by legislation (2010-2011) in line with the possible prolongation of the MFF, as already demanded several times by Parliament, (c) preparation of the next MFF starting in 2016/2017; this phase will be the responsibility of the Parliament elected in 2014;

General principles

8. Recalls that the own-resources ceiling represents 1,31 % of EU GNI in commitments and 1,24 % of EU GNI in payments; also recalls that every year significant margins are left below the ceiling set up by the financial framework, notably in payments (EUR 8 300 000 000 in 2007, EUR 13 000 000 000 in 2008, EUR 7 800 000 000 in 2009); moreover recalls that huge margins exist between the MFF ceiling and the ceiling of the EU own resources (11) (EUR 36 600 000 000 in 2010, EUR 44 200 000 000 in 2011, EUR 45 000 000 000 in 2012 and EUR 50 600 000 000 in 2013) (12);

9. Confirms its position as expressed in its abovementioned resolution of 29 March 2007 in which it stressed that ‘the political link between the reform of revenue and a review of expenditure is inevitable and perfectly reasonable’; believes that the two processes should be run in parallel with the aim of merging them in a global and integrated reform for a new system of EU financing and spending at the latest for the MFF starting in 2016/2017, which would require the preparatory work, including ratification, to be done beforehand; calls for consideration of a system whereby benefits and burdens between the Member States come to a generally more adequate level;

10. Believes that the general magnitude of EU resources must not be affected by the current world economic crisis, even if the Member States’ GNI will cease to follow an ever increasing curve; is therefore convinced that EU spending should concentrate on policies with a clear European added value, fully in line with the principles of subsidiarity proportionality and solidarity; recalls that in a time of crisis this added value is measured largely in terms of the fundamental principle of solidarity between European peoples;

11. Stresses that sound financial management, improved management by the Member States and the Commission matching political priorities and financial needs should remain a priority for the coming years, and that this objective should be pursued through prior identification of positive and negative priorities rather than through self-imposed ceilings, therefore believes that the MFF should have a greater degree of flexibility; emphasises that the challenges facing the EU (with crises in food, energy and the financial sectors) are of a magnitude rarely seen in its history; considers that a truly European response to these crises requires international legislative and budgetary measures;

12. Believes, since the Union's policy priorities are in a state of constant evolution as a result of globalisation, demographic change, technological development, the need to ensure secure and diverse sources of energy supply, and climate change, that it is essential that EU spending be re-evaluated and optimised in order to achieve the highest value added and most effective EU action;

13. Is convinced that more flexibility within and across headings is an absolute necessity for the functioning capacities of the Union not only to face the new challenges of the EU but also to facilitate the decision-making process within the Institutions; expects the Commission in its forthcoming proposals, based on Declaration No 1 of the IIA of 17 May 2006, to take relevant initiatives in this sense;

14. Recalls that Point 21 of the IIA lays down that ‘in the event of unforeseen circumstances the financial framework may, on a proposal from the Commission, be revised in compliance with the own-resources ceiling’; once again criticises the irrational behaviour of the Council which repeatedly opposes the use of this possibility of revision;

15. Reiterates its will to see a concrete and rapid improvement of the Member States’ and the Commission's implementation of EU policies and of the cohesion policy in particular; firmly expects the joint commitment made by the Commission and the Council on behalf of the Member States in November 2008 to simplify the procedures (notably of the Management Control Systems (MCS)) in order to accelerate payments, and to produce a positive effect in the coming budgets; is ready to take political and administrative measures, should the current situation remain unchanged; suggests that simplification of procedures must be a priority also in other areas, for example research and innovation and SME policy;

16. Notes that high priority should be given to effective management of EU spending; notes, further, that it is particularly important that allocations of funds are based on objective criteria and on a continuous evaluation of their performance; considers that strong and efficient Public-Private Partnerships (PPP) should be fostered in this respect;

17. Regrets the slow progress of the debate on reforming the EU budget financing system, which has become even more urgent as a result of the economic crisis; regrets in particular that the opportunity of establishing a system for auctioning greenhouse gas emission rights was not seized so as to launch a fundamental political debate on allocation of the new public resources created by EU decisions; urges that this debate be launched in the context of the mid-term review of the current MFF;

18. Notes that a large proportion of the Union’s objectives have been taken into account by the Member States in their national budgets; insists that the appropriations thus mobilised be recorded and published in each Member State to make it easier to gauge the effort made by each one and assess the amounts for which provision needs to be made in the EU budget in fields where Member States’ efforts need to be encouraged or complemented;

Specific observations

19. Is determined to find appropriate financing for the new or additional policies which might follow from the possible entry into force of the Treaty of Lisbon (such as energy and space policies, research under heading 1a; judicial cooperation under heading 3a; youth, sport, information and communication policy, public health under heading 3b; humanitarian aid, European External Action Service under heading 4);

20. Recalls that headings 1a, 3 and 4 are already under-financed in the current MFF; stresses that additional policies should not change the balance between the main categories of the current MFF nor jeopardise the existing priorities; stresses also that, should some Member States continue to insist on a ‘1 % approach’, there will be no budgetary way to finance new priorities which should not be acceptable for the Council and not at all acceptable for Parliament;

21. Considers that providing the Union with the means to fulfil its political ambition in the areas of energy security and the fight against climate change should be part of a short-term review, independent of the entry into force of the Treaty of Lisbon; is ready to examine the possibility of the creation of a specific fund for that purpose; stresses that this must also be a top priority for the next MFF, preferably through a global agreement on how to finance climate change policies; considers, with a long-term perspective, the creation of a new category bundling all budget-relevant policies in the fight against climate change;

22. Stresses the need for policy coherence in this respect and points to the need to carry out a climate change proofing of all major programmes including agriculture, cohesion programmes, transport and energy networks, and development programmes;

23. Reiterates its readiness to enter into negotiations with the Council on the Commission proposals to finance energy and network projects (broadband) in the context of the EU Recovery Plan;

24. Stresses that the current context of economic slowdown should not be used as a pretext to delay but on the contrary be seen as an opportunity to increase investments in green technologies;

25. Insists on pursuing the target of an increase of Research and Innovation expenditure to 3 % of EU GNI by the year 2010; stresses that scientific research, scientific infrastructure, technological development and innovation are at the heart of the Lisbon Strategy and key factors for growth, job creation, sustainable development and EU competitiveness;

26. Underlines the potential of education, culture and youth programmes to bring Europe closer to its citizens and to foster cultural diversity as well as mutual understanding, apart from the role that education plays in reaching the Lisbon targets and in matching skills with the new challenges and opportunities that arise from the financial and economic crisis and from climate change;

27. Recalls that heading 4 ‘The EU as a global partner’ remains chronically under-financed; asks the Commission to make proposals: for financing with a long-term perspective to help reach the Millennium Development Goals; for commitments resulting from an international climate change agreement independent of development aid; for preventing conflicts and promoting human rights and fundamental freedoms; for a credible neighbourhood policy; and for CFSP/ESDP (subject to adequate discharge procedures), in order to avoid recurrent and endless negotiations with the Council during the annual budgetary procedures; highlights that new needs should be financed with additional resources;

28. Recalls the commitments made by the Member States in 2005 in view of reaching the target of 0,7 % of EU GNI for the official development assistance (ODA) in 2015; believes that the support of the EU budget can be a useful incentive to help the Member States to keep to this goal; reiterates its will to integrate the European Development Fund into the general budget so as to enhance transparency with its parliament-accompanied and -controlled decision-making procedures;

29. Invites the Parliament elected in 2009, for reasons of transparency, to incorporate funds currently operating outside the budget into the regular budget structure;

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30. Instructs its President to forward this resolution to the Council and Commission.

(1) OJ C 139, 14.6.2006, p. 1.

(2) OJ C 124 E, 25.5.2006, p. 373.

(3) OJ C 323 E, 18.12.2008, p. 454.

(4) Texts Adopted, P6_TA(2008)0622.

(5) OJ C 27 E, 31.1.2008, p. 214.

(6) OJ C 323 E, 18.12.2008, p. 263.

(7) Texts Adopted, P6_TA(2008)0576.

(8) Texts Adopted, P6_TA(2008)0068.

(9) Texts Adopted, P6_TA(2008)0093.

(10) OJ C 297 E, 7.12.2006, p. 182.

(11) Council Decision 2000/597/EC, Euratom of 29 September 2000 on the system of the European Communities' own resources (OJ L 253, 7.10.2000, p. 42).

(12) 1.24 % own resources ceiling vs. MFF ceiling based on 2009 estimated EU 27 GNI.