A4-0404/96

Resolution on the draft budget of the European Union for the financial year 1997 Section III - Commission - as modified by the Council

The European Parliament,

- having regard to the draft budget for 1997 as presented after Council's second reading of 19 November 1996, accompanied by amendments and proposed modifications (C4-0600/96),

- having regard to Letter of Amendment No 2 to the draft general budget for the financial year 1997 established by the Council on 19 November 1996 (C4-0615/96),

- having regard to the Commission proposal to Parliament and the Council for a revision of the financial perspective (SEC(96)0492 - C4-0239/96) pursuant to Articles 11 and 12 of the Interinstitutional Agreement of 29 October 1993 on budgetary discipline and improvement of the budgetary procedure,

- having regard to its resolution of 28 March 1996 on the guidelines for the 1997 budget - Section III - Commission ((OJ C 117, 22.4.1996, p. 64.)),

- having regard to its resolution of 18 July 1996 on the 'ad hoc procedure' for the 1997 budget provided for in Annex II on interinstitutional collaboration in the budgetary sector to the Interinstitutional Agreement of 29 October 1993 on budgetary discipline and improvement of the budgetary procedure ((OJ C 261, 9.9.1996, p. 139.)),

- having regard to the Financial Regulation and in particular Articles 15 and 26, the latter permitting transfers of appropriations between chapters within each section of the budget,

- having regard to its deliberations at first reading and its resolution thereon adopted on 24 October 1996 ((Minutes of that sitting, Part II, Item 2(b).)),

- having regard to the report of the Committee on Budgets (A4-0404/96),

A. whereas the Council's draft budget of 19 November 1996 has increased commitments by ECU 298.4 million and payments by ECU 231.3 million over Council's first reading; whereas the Council's draft budget remains at 1.16% of GNP, and the actual own resources ceiling is 1.24% of GNP,

B. whereas the draft budget was established with regard for the budgetary austerity efforts called for by the Member States in order to enable them to achieve the convergence criteria leading to economic and monetary union as of 1999,

C. whereas Parliament has decided to maintain the 1997 budget at ECU 89,137 million in commitment appropriations and ECU 82,366 million in payment appropriations, below the level of the 1997 preliminary draft budget of the Commission and well below the overall financial perspective ceiling of ECU 90,229 million,

D. whereas the ECOFIN Council of 14 October 1996 decided unilaterally not to pursue, in the present circumstances, the Commission's abovementioned proposal to the budgetary authority for a revision of the financial perspective for the years up to 1999, or the proposal to adjust the financial perspective, called for by the European Parliament to step up its support for the three programmes to which it gave priority at its first reading,

E. whereas the Council rejected 229 of Parliament's first reading amendments in all sections, without individual justifications, adopted 57, and modified 14,

European Parliament: general approach

1. Decides that it shall provide adequate funding for the major priorities designated by Parliament at first reading - trans-European networks, research and technological development - without reducing the programme for peace and reconciliation in Northern Ireland, and the Community initiatives to assist regions affected by the decline of the textile and coal industries;

2. Regrets that the European Councils supporting such priorities and the other Councils were unable to provide the necessary new resources for these actions, and that no revision of the financial perspective was agreed in Council, and without appropriate political justification; reaffirms its right to adopt increases in non-compulsory expenditure by up to half the maximum rate of increase of such expenditure, pursuant to EC Treaty Article 203(9), fourth subparagraph;

3. Is pleased with its decision to find the funding for these priorities through its own efforts in the 1997 budget;

4. Considers that it should maintain support for EU activities as decided at first reading and has accordingly reintroduced the appropriate amendments, concerning in particular:

- actions to promote employment and social cohesion, by means of investment in infrastructure, support for SMEs and research;

- initiatives to tackle youth unemployment and continued social exclusion;

- actions to encourage education and training and to improve health;

- observance of environmental standards, and respect for equality of treatment of women and men, in implementing EU policies;

- measures to provide support for third countries, and to encourage democracy and respect for human rights;

- actions to aid refugees and displaced persons, and to promote civil society within the Union and outside;

5. Is, furthermore, of the opinion that its decisions on the 1997 budget have fully observed the guidelines expressed in its abovementioned resolution of 28 March 1996 and thus contributed to the establishment of a very rigorous and financially responsible budget in line with Member States' national budgetary decisions, thereby supporting the efforts to achieve the convergence criteria laid down by the Treaty on European Union for the completion of economic and monetary union;

Council's attitude

6. Expresses its grave concern at the persistent incapacity of Council, amounting to a lack of political will, to engage in a real and meaningful dialogue with Parliament throughout the current budget year, in particular as demonstrated in the conciliation with Council on 19 November 1996;

7. Regrets that, on the contrary, the Council has constantly adopted a legalistic and confrontational approach, which does not reflect the spirit of the Joint Declarations and Interinstitutional Agreements of 1982, 1988 and 1993; points out that the Council has thus reduced the dialogue with Parliament to a sterile, bureaucratic and purely technical exercise;

8. Regrets that the Council has rejected a minor revision of the financial perspective to allow for the priorities voiced by the budgetary authority, within conciliation, contrary to what has been decided by common accord on several previous occasions;

9. Is of the opinion that this negative attitude has been apparent in the discussions on all three major items of the 19 November 1996 conciliation:

- legal bases;

- budgetary information on fisheries agreements;

- financing of Council priorities on Northern Ireland, TENs and R& D;

notes that, on the fisheries issue, progress has very recently been made;

10. As to legal bases, regrets that Council has changed its own stance since April 1995; recalls that a Member State began a legal action against the Commission on legal bases sixteen days before the trialogue of 16 April 1996 was due to negotiate on this; deplores the fact that the Council insisted on imposing extra, unrealistic conditions to an agreement on this subject after the conciliation of 25 July 1996; notes that Parliament's guidelines on legal bases adopted at its first reading were not taken up constructively by Council; reiterates its willingness to negotiate a joint declaration on this in good faith on the basis of the principles outlined in paragraph 19 of this resolution;

11. Welcomes the conclusion of the negotiations on the joint declaration (see Annex II), which should permit improvement of the provision of information to the budgetary authority, confirms the criteria for entering certain appropriations in the reserve (B0-40) and should act as a bar to the Council's and Commission's systematic practice of provisionally applying fisheries agreements and protocols; points out that this joint declaration shall be without prejudice in any respect to Parliament's views on the classification of expenditure under Article B7-800 and on the amounts entered in the B0-40 reserve;

12. Deplores the fact that:

(a) Parliament's efforts to develop a dialogue on classification, as required by the 1982 Joint Declaration and the judgment of the Court of Justice in case C41/95, were rebuffed by Council;

(b) proposals are even now being prepared in connection with the IGC to reclassify certain EU non-compulsory expenditure as compulsory;

13. Warns the Council that such developments would further increase the democratic deficit of the EU;

14. Considers that, for all these reasons, the Budgets Council cannot be considered a reliable and effective interlocutor for Parliament during the budgetary procedure, without a proper political mandate, and instructs its President to examine with the Presidents of the Council and the Commission the possibility of arranging budget conciliations and trialogues with Ministers of the ECOFIN Council;

15. Finally, regrets Council's response to Parliament's financing of the Union priorities; protests against Council's interpretation of the Interinstitutional Agreement of 1993 rejecting the recategorization of expenditure;

Specific requests

16. Considers it essential that, when the European Council members make proposals with financial consequences, they provide financial statements or estimates on how such initiatives should be financed, thus respecting the requirements of budgetary discipline that they so often espouse;

17. While recognizing the need for studies permitted under the various legislative acts and certain specific programmes, confirms its decision to limit funding for support measures specifically undertaken according to the Commission's communication of 22 April 1992; requests the Commission to provide the budgetary authority with information on implementation of the measures taken on support measures (studies, research, information, and meetings) for the 1997 budget;

18. Welcomes the Council's acceptance of the measures to pursue the policy of greening, and repeats that all projects of a significant size, financed under the items covered by the amendments, should be accompanied by an environmental statement, on the basis of EC Treaty Article 130r, thus building on the code of conduct on this matter agreed between the Commission and Parliament in 1995;

19. Reconfirms its position stated in its resolution of 12 December 1995 on the Commission's communication to the budgetary authority concerning legal bases and maximum amounts ((OJ C 17, 22.1.1996, p. 27.)), and in its first reading amendment, that, apart from measures coming within the scope of the Institutions' administrative autonomy, all significant measures must, in good time, have a legal basis, and that pilot projects and preparatory measures involving more than ECU 10 million should be implemented over a period which is sufficiently long to allow the adoption of a legal basis, provided that funding remains within the financial perspective ceiling; confirms its right to create financing for new initiatives within the mentioned procedure and invites the Commission to conclude a special agreement for the activities being financed in more recent years;

20. Reminds the Commission to ensure that the 1997 budget is implemented in accordance with the decisions taken by Parliament, in accordance with EC Treaty Article 205, and to take appropriate account of these budget decisions in its 1997 legislative programme, with particular regard to the following lines, which Parliament has entered in the draft budget for the first time:

- third system and employment (B3-4010N) and promotion of SMEs and the craft sector and micro-enterprises (B5-3201N and B5-3202N);

- measures to combat violence against children, adolescents and women (B3- 4100N);

- measures to assist refugees (B3-4113 and B7-6008N) and actions in the fields of asylum and refugee policy (B5-803N);

21. Decides to place appropriations in reserve on 38 lines, so as to supervise closely the implementation of these lines during the 1997 financial year (see annex I); 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;

22. Expects budget management to be improved by the prompt application, by the Commission and by the Member State administrations, of the recommendations adopted under the SEM 2000 programme;

Agricultural policy

23. Welcomes the fact that Letter of Amendment 2/97 provides appropriations for farmers suffering the dramatic effects of the BSE crisis, and is prepared to treat the matter exceptionally, given Council's decisions of 30 October 1996; notes, however, that the Council has proposed appropriations on the lines, while no appropriate legal basis has been adopted, in contradiction to the Council's own current proposals on legal bases;

24. Recalls its insistence that the Letter of Amendment step up funding for promotion measures for quality beef consumption throughout the Union by ECU 20 million, as requested by its Committee on Agriculture at first reading, and welcomes the agreement reached with the Council in the trialogue of 19 November 1996 that consumer confidence in the market can only be re- established in connection with quality labels indicating the origin of beef;

Structural actions

25. Confirms its decision to ensure the implementation, monitoring and assessment of Community support frameworks and single programming documents for the programmes and projects under the Structural Funds, Community support frameworks, the Community initiatives and the Cohesion Fund;

Internal policies

26. Expects the Commission to bring forward the appropriate proposals to operationalize the report it presented on the harmonization of the financial regulations of the agencies without further delay; such proposals are to include the aspects of a harmonized system of financial control and of individual discharge procedures; instructs its Committee on Budgets to examine the budgetary implications of the agencies' buildings policy and tax status;

27. States that, with regard to the Agency for Safety and Health at Work, the reserve may be released during the course of the budget year if the agency proves to the budgetary authority that the available funds have been fully executed according to the terms of the work programme and that further means are necessary for operational purposes; the agency may also apply for further appropriations in the framework of a supplementary and amending budget if it is proved to be justifiable and the means are available;

28. Underlines its conviction that revenues collected by European institutions and agencies are own resources of the Union without regard to their re-use; reminds the Commission of its undertaking, given in January 1995, to submit a report to the budgetary authority on the budgetization of such revenues in 1996;

29. Decides to modify its amendment concerning the European Observatory for Textiles and Clothing to confirm its role as a non-political body aiming to carry out objective research in the sectors, but agrees to reconsider in the 1998 procedure whether this Observatory should continue to receive public funding, from the EU budget, and if so under which conditions;

30. Deplores the Commission's attitude of combining several elements in one proposal, so as not to use legal bases with procedures more favourable to Parliament; regards this attitude as unacceptable; takes note of the proposal concerning posts and telecommunications and voices its willingness to consider entering the appropriations on the line when the Council has adopted the legal basis;

31. Has taken due note of the Commission's decision concerning the guidelines for reorganization of DGX; notes that the basic principles of the proposed reform are commensurate with the remarks in the budget amendment to line B3- 300; resolves therefore to release half the appropriations entered in the reserve against this line;

32. Requests the Commission to present, before the end of March 1997, a report on the future needs of television support through the European Union budget, particularly for EURONEWS, and instructs its appropriate committees on this basis to report on the quality and financing of the various TV activities under this item with a view to phasing out such direct financing from the EU budget by 1999; releases 50% of the appropriations for EURONEWS (B3-2012) from the reserve, having received the report on the financing arrangements for EURONEWS, its costs and its impact;

33. Approves the decision to place in reserve the supplementary funding for the 4th Framework programme which should be divided as follows:

- 15% (at least ECU 10 million) for the R& D programme on non-nuclear energies for water research and renewables,

- 10% for the R& D programme on biomedicine for BSE,

- 35% for the R& D programme on industrial and material technologies for aeronautics; water research; intermodality of transport and location of mines (ECU 3 million),

- 20% for the R& D programme on telematics for educational multimedia and intermodality of transport,

- 10% for the R& D programme on information technologies for multimedia and location of mines (ECU 3 million),

- 10% for the R& D programme on environment for water research and location of mines (ECU 4 million);

External actions

34. Expresses its full support for the implementation of the MEDA programme and calls for respect of the conditions laid down in its resolution of 19 September 1996 on the political situation in Turkey ((Minutes of that sitting, Part II, Item 6.));

35. Recalls that the Commission must find appropriate ways within the existing budgetary structure to provide funding for reconstruction efforts in Chechnya;

36. Invites the Commission to report on the operation of the new 'Liikanen facility', first laid down in SAB 1/96 for the Phare, Tacis and MEDA programmes, when it submits the preliminary draft budget for 1998;

37. Confirms its decision at first reading that the activities under the Euratom Treaty for training experts in the PHARE and TACIS countries in the area of safeguards and implementation of a nuclear material accountancy and control system in those countries should be conducted under lines B7-500 and B7-520;

Administrative expenditure

38. Notes the Commission's decisions concerning the reorganization of specific Commission services, as requested at its first reading; awaits a copy of the complete report of the Task Force, which is to be submitted to its Committees on Budgets and on Budgetary Control; notes that, while awaiting a general debate with the Commission on the management of human resources before its presentation of the PDB, the main conditions set out at its first reading have been fulfilled in good time for the lifting of the reserve on A-1000 at second reading;

39. Regrets that the Commission has not filled a large number of vacant posts requested in the 1996 budget; requests the Commission, therefore, to submit to the budgetary authority by 31 May 1997 proposals for reallocation of staffing where vacancies persist;

40. Awaits the detailed evaluation of the application concerning conversion of appropriations into posts begun in 1993;

41. Confirms its decision to arrive at a completely transparent administrative procedure for the management of contracts concerning external relations; confirms its decision to delete the subsidy to EAC and takes note of the commitment by the Commission to present an alternative regime before the end of March 1997; requests the Commission to take the necessary temporary measures to respect the existing contracts;

42. Confirms its decision to set up a global reserve for delegations (ECU 15.3 million) pending assessment of the communication which the Commission is to submit, and practical implementing measures on redeployment and reform in the external services of the Commission;

43. Draws attention to the importance of stepping up interinstitutional cooperation, to achieve the synergy and economies that have been forecast; invites the Commission to bring forward an estimate of the savings in all institutions that have been achieved, and the forecast savings until 1999;

44. Reiterates its wish that the projects developed on the basis of budget line A-431, Advanced telecommunications systems, should be implemented through synergy between the European Parliament and the Commission; points out that a report together with an exhaustive financial statement on the arrangements for implementing this interinstitutional cooperation must be submitted to the budgetary authority before 31 March 1997;

45. Invites the Commission to complete its current study on all subsidies (Parts A and B of the budget), so that this document could serve as the basis for an evaluation, drawn up by the Budgets Committee by 31 May 1997, on the procedures for entry into the budget of subsidies granted under the EU budget (Parts A or B);

Reserve

46. Calls on the Commission to submit all transfers of appropriations entered in Chapter B0-40, for specific lines, as far as possible before 15 September 1997; 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;

47. Requests the Commission to draw up a report on the financial aspects of the Common Foreign and Security Policy and of the information provided to the Budgetary Authority in support of transfer requests; instructs its Committee on Budgets to draw up a report on this before 30 June 1997;

Negative reserve

48. Invites the Commission not to target certain items at the beginning of the year as likely contributors to the negative reserve;

Margins

49. Notes the margins left available for a possible supplementary and amending budget of ECU 1 billion in heading 1, ECU 2.1 million in heading 3, ECU 21.4 million in heading 4 and ECU 68.3 million in heading 5;

Final provisions

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

51. Instructs its President to forward these budgetary decisions to the Council and the Commission.

ANNEX I1997 BUDGET

Appropriations entered in reserve B0-40

(situation at the end of Parliament's second reading)

>TABLE>

Note: At first reading, the Council entered appropriations in reserve B0-40 for the following lines (a decision endorsed by the EP at first reading):

B1-1501 - Compensation for withdrawals 319 000 000

1 999 000

B1-2000 - Refunds on butter 304 000 000

7 200 000

B1-2220 - Ewe and goat premiums 1 614 955 000

42 900 000

B5-800 - Cooperation in the fields of justice and home affairs p.m.

9 300 000

ANNEX IIJOINT STATEMENT ON IMPROVING THE PROVISION OF INFORMATION

TO THE BUDGET AUTHORITY ON FISHERIES AGREEMENTS

The institutions agree on the following points and undertake to abide by them in the present and future budgetary procedures:

Nomenclature1. Two budget headings for fisheries agreements are hereby created:

(a) International fisheries agreements (B7-8000): will cover all amounts referring to the agreements and their protocols which are in force at the beginning of the financial year in question. Amounts referring to all new (or renewable) agreements will be attached to B7-8000, but inserted in the reserve, B0-40.

(b) Contributions to international organizations (B7-8001).

2. During the ad hoc conciliation procedure provided for in Annex II.B of the Interinstitutional Agreement, the European Parliament and the Council will seek to agree on the amount to be entered in the headings and in the reserve (B0-40) on the basis of the proposals made by the Commission.

3. The European Commission confirms the undertaking given in the code of conduct to keep the European Parliament regularly informed through its parliamentary committees regarding the preparation and conduct of the negotiations, including the budgetary implications.

As part of the legislative process relating to fisheries agreements, the three institutions undertake to make every effort to ensure that all procedures are carried out as soon as possible.

If appropriations relating to fisheries agreements (including the reserve) prove insufficient, the Commission shall provide the budgetary authority with the necessary information for an exchange of views in the form of a trialogue, possibly simplified, on the causes of the situation, and on the measures which might be adopted under established procedures. Where necessary, the Commission will propose appropriate measures.

Information4. Every quarter the Commission will present detailed information to the budgetary authority concerning the execution of ongoing agreements and the financial forecasts for the remaining part of the year.