A4-0500/98

Resolution on the draft general budget of the European Union for the financial year 1999 as modified by the Council (all sections) and on Letter of Amendment No 1/99 to the preliminary draft budget for 1999 - Section III - Commission

The European Parliament,

- having regard to the Treaty on European Union,

- having regard to the Council decisions of 24 November 1998 on the draft budget for 1999 as amended and modified by Parliament at first reading (C4-0600/98),

- having regard to Letter of Amendment No 1 to the preliminary draft budget for 1999 - Section III Commission (SEC(98)1766),

- having regard to Letter of Amendment No 1 to the draft general budget of the European Communities for 1999 established by the Council on 24 November 1998 (C4-0666/98),

- having regard to the Interinstitutional Agreement of 29 October 1993 on budgetary discipline and improvement of the budgetary procedure ((OJ C 331, 7.12.1993, p.1.)) and the financial perspective attached thereto, as revised and adjusted most recently on 2 April 1998 ((OJ C 138, 4.5.1998, p.155.)),

- having regard to its resolutions of 2 April 1998 on the guidelines for the 1999 budget ((OJ C 138, 4.5.1998, p.149 and 153.)),

- having regard to its resolution of 2 July 1998 on the ad hoc procedures for the 1999 budget as provided for in the Interinstitutional Agreements of 29 October 1993 on budgetary discipline and improvement of the budgetary procedure and 16 July 1997 on provisions regarding financing of the common foreign and security policy, and in the procedure concerning financing international fisheries agreements, pursuant to the Joint Declaration of 12 December 1996 ((OJ C 226, 20.7.1998, p. 46.)),

- having regard to the Financial Regulation, and in particular Articles 15 and 26 thereof, and the deliberations of the competent committees on such transfers,

- having regard to the report of the Court of Auditors on the financial year 1997 ((OJ C 349, 18.11.1997. )),

- having regard to its deliberations and amendments adopted at first reading and its resolutions adopted on 22 October 1998 on the draft general budget of the European Union for the financial year 1999 (Sections I, II, III, IV, V and VI) ((Minutes of that sitting, Part II, Item 1(a) and (b).)),

- having regard to the report of the Committee on Budgets and the opinion of the Committee on Agriculture and Rural Development (A4-0500/98),

A. whereas the Council's draft budget of 24 November 1998 has increased commitments by euro 392 million and reduced payments by euro 336 million over the Council's first reading; whereas the Council's draft budget remains at 1.10% of GNP in terms of payment appropriations, while the own resources ceiling is 1.27% of GNP; whereas the Council's draft budget has increased payment appropriations by 2.36% over 1998,

B. whereas the draft budget was established by Parliament as a bridge between the financial perspective for the period 1993-1999 and that which may be negotiated for the period after 1999; whereas some Council members have recognised this, claiming the 1999 budget as the base for the following years' perspective; whereas the 1999 budget heralds the third stage of Economic and Monetary Union and should be the first budget under which the Treaty of Amsterdam is implemented,

C. whereas the Council Presidencies have showed themselves ready to engage in a meaningful dialogue with Parliament throughout the year, in trialogues and other high-level meetings on 21 January, 23 February, 31 March, 23 June, 16 July, 13 October, 12-13 and 17 November and 1 December, and as demonstrated in the conciliations with the Council on 17 July, 24 November and 8 December 1998,

D. whereas the Council has adopted 144 amendments from Parliament's first reading and modified 59 or rejected 62 (a total of 121 amendments or modifications); whereas the Council has accepted all the amendments in Sections I, including the Annex for the Ombudsman, IV, V and VI,

E. whereas it was committed to maintaining payments roughly in line with the average increase of Member States' budgets as compared with their 1998 budgets, conditional upon the attainment of common positions between the two arms of the budgetary authority on key elements such as compliance with paragraph 21 of the Interinstitutional Agreement; more realistic forecasts of agricultural and fisheries expenditure through the presentation of a late Letter of Amendment to the PDB; an agreement on legal bases; the scrutiny of the effectiveness of all expenditure entered in the budget; the monitoring of the implementation of the budget, emphasising the quality rather than the quantity of expenditure, and continuing the fight against fraud,

F. whereas paragraph 17 of the abovementioned Interinstitutional Agreement of 29 October 1993 stipulates that the two arms of the budgetary authority agree to accept, for each of the financial years from 1993 to 1999, the maximum rates of increase for non-compulsory expenditure deriving from the budgets established within the ceilings set by the financial perspective,

G. whereas the Early Warning System's communication No 12 shows that ECU 1.4 billion has not been spent from the appropriations for the 1998 EAGGF; whereas the Council has adopted a new heading for food aid for Russia in its first reading of Draft Supplementary and Amending Budget 1/98 with ECU 400 million against the heading,

H. whereas Parliament has decided to adopt the 1999 budget at euro 96 929 million in commitment appropriations and euro 85 558 million in payment appropriations, which represents 1.10 % of GNP,

1. Approves the budget decisions to confirm its first-reading priorities and to provide adequate funding for the major priorities designated by Parliament and by Council at their first readings while respecting budgetary rigour;

2. Welcomes, for the second year, the fact that these decisions of the budgetary authority were made largely through joint efforts; recalls that these priorities include creation of employment throughout the European Union; fostering education and training, and research and development, working towards the concept of the 'Europe of knowledge'; protecting the environment and taking measures to reduce climate change in the world; strengthening the European Union in the world through a coherent development policy capable of reaching internationally set targets; and more intensive monitoring of implementation and real effectiveness of all programmes in order to strengthen and sustain the process of economic convergence;

3. Notes that the Council is beginning to assume its role as a political interlocutor in the budgetary process, and proposed a compromise for the 1999 budget, containing many elements in all expenditure headings, concerning both the 1998 and 1999 budgets, and a possible future interinstitutional agreement on future financial arrangements; considers that the negotiation of this compromise is a step towards genuine budgetary co-decision, which is sought by Parliament;

4. Notes that when the budgetary authority acts in close cooperation, it benefits the Union as a whole and its citizens; expects this message to be taken to heart by Council in its consideration of a new financial perspective and in its negotiations with Parliament on a possible future interinstitutional agreement;

5. Welcomes the joint declaration of the three institutions made on 8 December 1998 on flexibility in the new interinstitutional agreement; welcomes the acceptance by the Council of majority voting for the proposed instrument and the concept of co-decision for the mobilisation of the facility; calls on its committee responsible to implement this guideline in the negotiations for the revision of the interinstitutional agreement and financial perspective;

6. Welcomes the application of the legal bases agreement through principles established by common accord between the three institutions; welcomes Council's acceptance of Parliament's initiatives through pilot projects and preparatory actions aimed at Union support for activities in the field of social exclusion, multicultural integration, gender discrimination, and refugees and asylum seekers, aid to the disabled and to combat violence against, and ill-treatment of, women and children; now expects these to be fully implemented in 1999 by the Commission; calls on its committees to review the implementation of these projects and actions during the year, so as to provide input into the following budgetary procedure and legislative programme;

7. Notes that, as a general rule for headings where legal bases are outstanding, appropriations are being placed in the reserve, but reminds the Council of its undertaking on 17 July 1998 to speed up the legislative process for actions where a legal basis has already been proposed; furthermore, asks the Commission to specify, in its annual legislative programme for 1999, those proposals which are pending before the legislative authority the adoption of which is necessary for the implementation of the budget, and the timetable foreseen for such adoption; requests the Commission to encourage the two arms of the legislative authority to co-operate in ensuring the rapid adoption of the necessary legal bases, and to indicate to the budgetary authority any problems that will arise, notably as 1999 is an election year; instructs all its committees to take steps to ensure regular review and follow-up of this matter;

8. Takes note of the Commission's late Letter of Amendment 1/99; welcomes the final outcome of negotiations between the two arms of the budgetary authority in accepting the new updated figures for many headings, with the total amount for B1 (EAGGF) remaining euro 40 440 million; welcomes the increase in funding for the agri-environmental measures (B1-5011) through a reserve of euro 20 million, and the reserve of euro 80 million from headings in B1-15 ('Fruit and vegetables¨) and in B1-20 ('Milk and milk products¨); notes that the Council has created a new heading B1-315 ('Food aid for Russia¨) with a token entry, as a budgetary frame for a carryover of euro 400 million from 1998;

9. Notes that the Council rejected Parliament's proposal to place in the reserve part of the appropriations for heading 2, which aimed to facilitate the carryover thereof to the 2000 financial year and thus to compensate for foreseeable low implementation by certain Member States in 1999; considers that low implementation of heading 2 appropriations by certain Member States will nevertheless occur in 1999; underlines the fact that the total of appropriations under this heading has to be considered an expenditure target, as Parliament has recalled on numerous occasions; recalls that the regions concerned need such funding to encourage their economic and social development; calls therefore on the Commission, if necessary, to request the budgetary authority to carry over unused Structural Fund appropriations to the financial year 2000 in the same way as has hitherto been done;

10. Notes that it has once again found funding for the PEACE and for the RECHAR, RESIDER and REGIS II Community initiatives; calls on the Commission and the Member States concerned to make greater efforts to ensure that these appropriations are fully utilised;

11. Welcomes the accord reached by the two arms of the budgetary authority, compensating the funding used for administrative purposes over the last few years for the operational needs of the Socrates and Youth for Europe programmes within the financial framework agreed in co-decision, and pursuant to the Joint Declaration by the European Parliament, the Council and the Commission of 6 March 1995 concerning the inclusion of financial provisionis in legislative decisions ((OJ C 102, 4.4.1996, p. 4.)); takes note of the observance by Council of Parliament's priorities regarding Europe of Knowledge by accepting Parliament's allocation for Leonardo and Connect, while Council proposed the addition of the funding for the extra year of the Kaleidoscope and Ariane programmes for an amount of euro 10.2 million and euro 4.3 million respectively;

12. Records that, in accordance with the results of conciliation on the Fifth EU R& D Framework Programme, the total amount for research, technological development and demonstration in the 1999 budget is euro 3 450 million, which represents about 54% of the maximum amount foreseen in the financial perspective for heading 3 in 1999, within the range for the share of research as laid down by the European Council at the 1992 Edinburgh Summit (50 to 66.66%); notes that appropriations for the EC programme total euro 3 140 million in 1999, and for the Euratom programme euro 310 million; nevertheless agrees with the Council's second-reading estimates, which also reflect the breakdown between budget lines proposed by the Commission;

13. Welcomes the Council's acceptance of actions for refugees, given the forthcoming ratification of the Treaty of Amsterdam, which transfers this policy area from the Third Pillar to the First; urges the Commission to submit promptly the appropriate legal basis allowing the Union to give its support to this policy for refugees and asylum seekers;

14. Agrees to transfer to Part A of the budget the appropriations in Part B for conferences and congresses authorised by the 1993 communication, with a view to clarifying the operational nature of appropriations in Part B and to supporting the MAP 2000 decentralisation process;

15. Takes note of the Agencies' commitment to respect the proposed Code of Conduct aiming to increase transparency and ensure the forwarding of budgetary information to the budgetary authority; therefore proposes to release the amounts entered in the reserve, considering that the Commission should be as involved as the Agencies themselves in such a process;

16. Is still not convinced of the immediate capacity of the receiving countries to absorb the extra funding foreseen by the European Council for the PHARE programme, but wishes to fix realistic spending targets for EU funding in the applicant countries to allow them and the Union to fulfil the expectations of their citizens in the run-up to accession;agrees therefore to increase commitment appropriations by more than Euro 48 million over its first reading; decides to enter those appropriations in the reserve (B0-40), pending information on improvement of beneficiary countries' take-up capacity;

17. Enters the previous year's amount against B7-502, pending a coordinated regulation (between PHARE/CBC and INTERREG) to improve and speed up cross-border projects at the frontiers between the EU and Central and Eastern European countries, and points out that it must be consulted before its adoption; expects a practice-oriented regulation, which respects the needs on the spot; asks for effective involvement of the concerned regions in the implementation of the programmes;

18. Agrees with the common approach that has been negotiated to strengthen a number of external actions, initially radically reduced by the Council in first reading, such as rehabilitation activities, reconstruction in Latin America, actions promoting democracy and respect for human rights, tropical forests, and non-governmental organisations working in developing countries;

19. Agrees with the decision to place euro30 million in the reserve for B7-541 (Measures for reconstruction of the republics formerly part of Yugoslavia), to be released once the Commission has come forward with a new consolidated draft regulation for this action for the period after 2000;

20. Approves the budgetary decision on the reserve in connection with TACIS funding, in view of the measures proposed for emergency aid to Russia; insists that the appropriations to be allocated to this initiative shall also cover the necessary controls on the spot in order to avoid any misuse of the EU aid and to avoid any risk of re-export, or exports of the same products, and shall be conditional upon adequate anti-fraud measures, guarantees as to the local use of the products in Russia, assurance of proper distribution to the neediest and most vulnerable regions, and adequate finance for real needs; insists furthermore that any revenue generated be used in the social and health sectors in cooperation with the Red Cross and other non-governmental organisations; requires the Commission to report back to the budgetary authority regularly on the implementation of this aid;

21. Agrees to place against heading B7-531 a further euro3 million in appropriations for exceptional financial assistance for Armenia and Georgia, and underlines the fact that during the trialogue of 17 November 1998 the two arms of the budgetary authority recognised the earlier accord that the overall reference amount would be euro50 million for the period 1997-2001;

22. Notes that the Commission proposals to increase payment appropriations for the TACIS (euro 25 million), cooperation with Asia (euro 30 million) and tropical forests (euro 5 million) were not accepted under the 1998 Notenboom procedure; expects the Commission to propose, during 1999, by means of transfers or if necessary a SAB, the topping-up of appropriations which could be necessary for external policy;

23. Notes that the Council has adopted the European Parliament amendment on Tropical Forests (B7-6201) fixing the total amount to euro45 million in commitment appropriations; urges the Commission to reinforce the budget item during the 1999 financial year, if it is necessary, by transfer or through a supplementary budget, in order to enter the appropriations previously envisaged by Parliament and to make possible the full implementation of this programme.

24. Welcomes the reduction of the item in the B0-40 reserve for international fisheries agreements proposed by the Commission in its late Letter of Amendment 1/99; notes, however, the long delay in receiving the necessary confidential information on this matter and insists that the Commission respect the time limits imposed;

25. Takes note of the requirements presented by the Commission, and the formal commitment made by Commissioner Liikanen, to ensure future transparency on the level of administrative and technical assistance for each Union action or programme funded in Part B; considers that verification of the use of operational appropriations for administrative purposes requires the following principles to be observed, and has made the appropriate budget decisions accordingly:

- a general ban on using Part B appropriations for administrative expenditure in the interests of the Commission, unless duly authorised in the remarks against the specific budget heading;

- authorisation in the remarks against specific headings, where the existence of such expenditure is permitted, with a ceiling;

- entry of an amount of euro 17 million to finance part of such activities in Part A of the budget;

requests the Commission to provide full details of such exceptions by 30 April 1999, when the 2000 preliminary draft budget is submitted, such as the funding needs, the number of persons and cost per person/year, the type of contract (intra/extra muros), the purposes of the support, and the controls carried out, and requires it to report on the application of these decisions so that the results can be taken into account in the first reading by Parliament of the 2000 draft budget;

confirms that all amounts used beyond the ceiling agreed by the budgetary authority, and not declared and specifically authorised, will be considered a violation that is subject to disciplinary measures; invites the Commission to include these principles in the forthcoming proposal for the recasting of the Financial Regulation;

Reserves

26. Decides to place appropriations in the reserve for the headings listed in the Annex, so as to supervise closely the implementation of these headings during the 1999 financial year; recalls the conditions for their release as indicated in the amendments it has adopted; agrees to release the appropriations once the conditions set by Parliament are fulfilled;

27. Repeats its call to the Commission to submit all transfers of appropriations entered in Chapter B0-40, for specific headings, as far as possible before 15 September 1999; calls on the Commission to notify the budgetary authority in full no later than 10 days prior to the latter's deliberations thereon; such proposals for transfers must be submitted separately from the Notenboom-Bourlanges global transfer, and from any supplementary and amending budget proposed in the last four months of the year;

28. Commits itself to evaluating interinstitutional cooperation, and to encouraging it in identified priority areas so as to achieve the synergy and economies that have been forecast;

29. Approves its budget decision to allocate subsidies from the Union budget (Part A of the budget) to organisations and projects receiving support also from other sources; commits itself to watching closely the implementation of the subsidies system and encourages further improvement of internal procedures, so as to reduce the waiting time for recipients and to avoid duplication of subsidy from the two parts of the budget;

30. Accepts the Council's proposal to leave 50% in the reserve for the four items A-7030 to A-7033, in order to maintain pressure on all sides to come to a equitable and effective solution on the new commitology structure, before the beginning of May 1999, after real trilateral negotiations; notes that the conditions for the release of the funding represent the main lines of Parliament's mandate on this matter adopted in September 1998;

Pensions

31. Regrets that Council has not been playing a constructive role in the reshaping of the pension system for staff of the European institutions, although it had been defined as a common priority by both arms of the budgetary authority; insists nevertheless on improving transparency of and bringing up-to-date the pension system and centralizing it in the Commission; repeats its request to the Commission to present by 31 March 1999 a proposal for reform of the pension system for the staff and other servants of the institutions and bodies of the Union, which should center around greater transparency and the elimination of elements of inter-generational redistribution; asks the Commission to make a proposal for the amendments to the Staff Regulations which might be needed e.g. for the establishment of a fund;

Other institutions

32. Notes that, apart from the amendments made by the Parliament to its own budget and to that of the Ombudsman, for the second time the Council has endorsed Parliament´s first reading of the draft budget (other institutions) without amendment;

33. Once more underscores the vital need for the institutions to take on ownership of the buildings used, since this would entail major savings for future Union budgets;

34. Calls on the Court of Justice to make changes to its translation policy, including through the use of computer-assisted translation systems, at least for administrative and bureaucratic texts, so as to be able to keep the total number of documents to be translated under control and to use lawyer-linguists solely for legal translation work; calls furthermore for it to submit to the budgetary authority proposals to facilitate its translation policy;

35. Calls on the Economic and Social Committee to change its internal rules in such a way as to bring the number of meetings and working parties into line with the recent reduction of the number of specialist sections from nine to six;

36. Calls on the Committee of the Regions to submit to the budgetary authority solutions which are technically and financially implementable concerning the forthcoming expiry of its Secretary-General's term of office, and with a view to strengthening management structures in response to the increasingly heavy work load following ratification of the Treaty of Amsterdam;

37. Calls on the administrations of the Commission, Council, Parliament, the Court of Justice and the Court of Auditors, as well as of the Economic and Social Committee, the Committee of the Regions and their Joint Structure, to have a study made, within inter-institutional cooperation, on the environmental aspects of their administration. The study should include a timetable for the implementation of the proposals resulting from the study. The study should cover the following areas: general administration, mobility and transport and energy policy. The study should be available at the latest on 1 April 1999 in order to take the required actions on board in the preliminary draft budgets of the institutions and bodies mentioned for the year 2000; the studies will be made available to both arms of the budgetary authority.

Margins

38. Notes the margins remaining available for a possible supplementary and amending budget of euro 4.748 billion in heading 1, euro 524 million in heading 3, euro 962 million in heading 4 and euro 220 million in heading 5;

Final provisions

39. Expects the Council - with a view to continuing the negotiations on signing a new Interinstitutional Agreement and a new Financial Perspective - to comply with the provisions of paragraph 17 of the current IIA of 29 October 1993;

40. Considers that the Council's failure to comply with the provisions of paragraph 17 of the Interinstitutional Agreement, referred to above, means that the Council is unilaterally terminating the aforementioned Agreement and the Financial Perspective annexed thereto;

41. Instructs its President to designate the budgetary act as the budget of the European Union;

42. Instructs its President to forward these budgetary decisions to the Council, the Commission and the institutions and advisory bodies concerned.

ANNEX

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