Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation amending Regulation (EC) No 1258/1999 on the financing of the common agricultural policy as well as various other Regulations relating to the common agricultural policy"

(2001/C 123/17)

On 12 September 2000 the Council decided to consult the Economic and Social Committee, under Article 37 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 20 December 2000. The rapporteur was Mr Strasser.

At its 378th plenary session held on 24 and 25 January 2001 (meeting of 24 January), the Economic and Social Committee adopted the following opinion by 74 votes to 1, with 6 abstentions.

1. Introduction

1.1. On 26 July 2000 the European Commission proposed a radical revision of the EU Financial Regulation. The main purpose of the proposal was to simplify and restructure the existing Financial Regulation, which was introduced over 20 years ago.

1.2. The 1977 version has been amended 14 times, as and when necessary: firstly, in order to reflect institutional changes (the Maastricht and Amsterdam Treaties, funding for EFTA countries in the framework of the EEA) and then to ensure more rigorous management of Community resources.

1.3. The Commission considers that all the principles and key provisions for budget and financial management should be brought together in a single legal instrument, whereas detailed and technical provisions should be covered in implementing regulations.

1.4. In order to ensure the necessary transparency in budget accounting(1), the draft proposal provides for "negative expenditure" in the agricultural sector to be treated as earmarked revenue in accordance with the rules in effect for this sector.

1.5. The term "negative expenditure" is used on the one hand when referring to recovery of payments already made and on the other for revenue that could not yet be considered as revenue in budgetary planning. "Negative expenditure" is the result of a complicated budgetary mechanism and is divided into five categories:

- amounts recovered as a result of fraud or irregularities,

- corrections to advances made on the basis of Article 13 of the rules on budgetary discipline,

- any "profits" which may arise from sales from public storage,

- the additional levy on surplus milk production,

- the financial consequences of clearance-of-accounts decisions.

1.6. In order to transform "negative expenditure" from the EAGGF guarantee section into earmarked revenue, the Commission proposes to define what recoveries, levies and sums withheld under the common agricultural policy are to be considered as earmarked revenue in the following cases:

- financing of the common agricultural policy(2),

- the additional levy on surplus milk production(3),

- financing of intervention measures in the form of public storage accounts(4),

- and crediting of securities, deposits and guarantees furnished under the common agricultural policy and subsequently forfeited(5).

2. Comments

2.1. The Committee considers that the Commission's proposal to separate the budgeting and entering of "earmarked revenue" accords with the budget principle of transparency, and especially also the need to identify the various account movements in the agricultural budget.

2.2. The Committee therefore welcomes the proposal to transform "negative expenditure" into "earmarked revenue". This also provides the necessary clarification called for several times by the European Court of Auditors. This clarification also means that sums converted from "negative expenditure" into "earmarked revenue" are unquestionably available for purposes of the EAGGF Guarantee section. The Committee emphasises that this proposed amendment will not place any additional burden on the Community budget.

2.3. The Committee asks the Commission to ensure that its implementing rules contain clear instructions regarding the reports to be submitted by the member states.

Brussels, 24 January 2001.

The President

of the Economic and Social Committee

Göke Frerichs

(1) The European Court of Auditors has lamented the difficulty of identifying "negative expenditure" in the accounts (see for example its Annual report for the financial year 1998, point 2.39, OJ C 349, 3.12.1999).

(2) Regulation (EC) No 1258/1999, OJ L 160, 26.6.1999.

(3) Regulation (EEC) No 3950/92, OJ L 405, 31.12.1992.

(4) Regulation (EEC) No 3492/90, OJ L 337, 4.12.1990.

(5) Regulation (EEC) No 352/78, OJ L 50, 22 .2.1978.