European Parliament resolution on the draft general budget of the European Union for the financial year 2007, Section III - Commission (C6-0299/2006 - 2006/2018(BUD)), and Letter of amendment No 1/2007 (SEC(2006)0762) to the draft general budget of the European Union for the financial year 2007
Date: 2006-10-26
Institutions: Committee on Budgets, European Parliament
Subjects: European Union, budget policy, budgetary expenditure, budgetary resources, draft budget, financial year, general budget, management techniques

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TEXTS ADOPTED

P6_TA(2006)0451

Draft general budget for 2007 (Section III)

European Parliament resolution on the draft general budget of the European Union for the financial
year 2007, Section III — Commission (C6-0299/2006 — 2006/2018(BUD)), and Letter of
amendment No 1/2007 (SEC(2006)0762) to the draft general budget of the European Union for
the financial year 2007

The European Parliament,

— having regard to Article 272 of the EC Treaty and Article 177 of the Euratom Treaty,

— having regard to Council Decision 2000/597/EC, Euratom of 29 September 2000 on the system of the

European Communities' own resources (1),

— having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial

Regulation applicable to the general budget of the European Communities (2),

— having regard to the Interinstitutional Agreement of 17 May 2006 between the European Parliament,

the Council and the Commission on budgetary discipline and sound financial management (3),

— having regard to the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the
Council and the Commission on budgetary discipline and improvement of the budgetary procedure (4),

— having regard to its resolution of 18 May 2006 on the Commission's Annual Policy Strategy report

(APS) (5),

— having regard to the preliminary draft general budget of the European Union for the financial year

2007, which the Commission presented on 3 May 2006 (SEC(2006)0531),

— having regard to the draft general budget of the European Union for the financial year 2007, which the

Council established on 14 July 2006 (C6-0299/2006),

— having regard to Letter of amendment No 1/2007 (SEC(2006)0762) to the draft general budget of the

European Union for the financial year 2007,

— having regard to the report of the Committee on Budgets of 11 July 2006 on the mandate for the

2007 draft budget conciliation procedure for the Council's first reading,

— having regard to Rule 69 and Annex IV of its Rules of Procedure,

— having regard to the report of the Committee on Budgets and the opinions of the other committees

concerned (A6-0358/2006),

General considerations: setting priorities, value for money, preparing for the 2008/2009 review

1.
Recalls that its political priorities for the 2007 budget were set out in its abovementioned APS resolu-
tion of 18 May 2006; notes that paragraph 5 of that resolution set out the three key elements of setting
policy priorities, ensuring qualitative value for money, and preparing for the 2008/2009 review of the
2007-2013 multi-annual financial framework (MFF);

2.
Notes that this strategy has been put into effect in preparing the Parliament's first reading on the 2007
budget with policy priorities set out in paragraph 6 of the APS resolution, and re-stated in paragraph 5 of
the abovementioned report on the mandate for the 2007 draft budget conciliation procedure with the
Council; notes that these priorities were central to Parliament's budget amendments on priority pro-
grammes;

(1) OJ L 253, 7.10.2000, p. 42.
(2) OJ L 248, 16.9.2002, p. 1.
(3) OJ C 139, 14.6.2006, p. 1.
(4) OJ C 172, 18.6.1999, p. 1. Agreement as last amended by Decision 2005/708/EC of the European Parliament and of

the Council (OJ L 269, 14.10.2005, p. 24).

(5) Texts Adopted, P6_TA(2006)0221.

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3.
Remarks that this is the first budget under the new Financial Framework, under a new Interinstitu-
tional Agreement (IIA) and with many new multiannual programmes; remarks further that a new Financial
Regulation should ideally apply for the implementation of the 2007 budget;

4.
Highlights that, in line with the cost-benefit approach set out in paragraph 7 of the APS resolution, a
qualitative value for money approach was started through policy hearings in the Committee on Budgets, and
a thorough analysis of a number of sources of information on the quality of spending of EU funds and on
budget implementation; notes that budget amendments were prepared inter alia on the basis of the informa-
tion thus obtained; welcomes the fact that Council, Commission and Parliament all participate in a value-
for-money trend;

5.
Considers that the level of aggregate appropriations proposed by the Council in its draft budget falls
well below the level needed for the EU to respond effectively to the challenges of globalisation it faces,
which only serves to highlight the importance of the third strand of Parliament's strategy, preparing for
the review of the MFF, which should deliver EU spending that is better focused on policy priorities; believes
that by focusing commitments on priority programmes and by ensuring that funds are well spent, EU
spending will better serve the interests of citizens;

6.
Expects that all new elements and reforms set down in the new IIA of 17 May 2006 will be fully
implemented in the course of the 2007 budget in order to have a rapid effect on the qualitative implemen-
tation of the budget and the inter-institutional relationship;

Horizontal issues

Focusing on priorities

In line with Parliament's priorities, considers that EU spending should be focused on priority areas and
7.
at a higher level than proposed in the draft budget of the Council in order to ensure effective delivery of
priority programmes to citizens; therefore proposes to increase payments in the 2007 budget to a level of
1,04 % of EU GNI by increasing appropriations on budget lines linked to the Parliament's political priorities;
notes that most of the specialised parliamentary committees have proposed to restore the amounts of the
Preliminary Draft Budget (PDB), in line with the ongoing legislative procedures, or those beginning in 2007;

Tackling the challenges of globalisation

8.
Believes that the European Union must actively address and engage more effectively with the eco-
nomic, political, social, environmental and development challenges presented inter alia by the ongoing
process of globalisation; therefore presents amendments to the 2007 budget that aim at boosting the
capacity of the EU economy to engage with these challenges in a more strategic manner, and raising
the amounts of development assistance available to regions such as Asia and Latin America and the
Mediterranean;

Delivering value for money

Emphasises the need for improved value for money in the EU budget; proposes amendments to place
9.
30 % of appropriations in reserve on a number of budget lines until the Commission can reassure the
Parliament that this money will be spent in a manner that delivers value for money to the European
taxpayer;

10.
Recalls that these budget lines were selected on the basis of a thorough examination of the special
reports of the Court of Auditors, the Synthesis Reports on the Commission's management of funds, the
Budget Forecast Alert prepared by the Commission, and cost-benefit analyses carried out at the request of
the Committee on Budgets and taking into account the activity statements prepared by the Commission
services;

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11.
Specifically welcomes the call for a hearing in mid-November for the Commission to respond to the
concerns raised in these amendments; urges members of Parliament's specialised committees to participate
in this hearing;

12.
Reduces by 10 % the appropriations for administrative management directly linked to programmes
on a horizontal basis; sees no contradiction for budget lines on which the Parliament both places amounts
in reserve due to some concerns about the quality of implementation and increases appropriations accord-
ing to political priorities; reaffirms, in this connection, that it wishes to see qualitative value for money in all
areas of EU spending;

13.
Recalls the importance attached by Parliament to achieving a positive statement of assurance for
funds under shared management; underlines its intention to ensure that, in line with the IIA of 17 May
2006, the relevant audit authorities in Member States produce an assessment concerning the compliance of
management and control systems with the regulations of the Community; reiterates that Member States
therefore undertake to produce an annual summary at the appropriate national level of the available audits
and declarations;

Pilot projects and preparatory actions

14.
As regards pilot projects and preparatory actions, notes the increased ceilings for new projects set out
in the IIA of 17 May 2006; proposes a number of new projects broadly in line with the priorities set out in
paragraph 6 of the APS resolution;

Agencies

For existing agencies proposes, as a general approach with a small number of specific exceptions, to
15.
restore appropriations in the PDB but placing increases above a reference amount in reserve, pending a
positive evaluation of the performance of the agency against its final work programme containing a com-
plete task list for 2007 and the new staff policy plans by the Commission; as regards the new agencies
(Chemicals Agency, Gender Institute, Fundamental Rights Agency), with a view to ensuring the application
of Point 47 of the IIA of 17 May 2006, proposes to delete the appropriations entered in the draft budget
in particular in light of the fact that no legal base yet exists for these agencies; expects the Council to
clarify host countries' contributions to agencies already established and to adopt a set of binding common
standards;

Specific approach per heading

Heading 1a — Competitiveness for growth and employment

16.
Confirms its conviction expressed in its APS resolution that knowledge, skills, research and develop-
ment, innovation, information society technologies, and a sustainable transport and energy policy form the
basis of a healthy modern economy and are essential for job creation; has therefore decided to reject the
Council's approach of reductions in a number of crucial budget lines aiming at improving the competitive-
ness of the EU's economy; has decided to increase payment appropriations for priority programmes linked
to the Lisbon agenda such as the Competitiveness and Innovation Programme (CIP) and the Seventh Frame-
work Programme of the European Community for research, technological development and demonstration
activities (2007-2013);

17.
Regrets that the appropriations for trans-European transport networks (TEN-T) have been consider-
ably reduced for the 2007-2013 MFF to a level lower than had been anticipated; underlines the importance
of a clear statement from the Commission of its proposed priorities for TEN-T investment; awaits a satis-
factory agreement with the Council and the Commission on a regulation on financial aid in the field of
trans-European transport networks and priority projects to which funds should be allocated;

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18.
Is convinced that raising the EU's competitiveness is an essential element of the EU's response to the
challenges of globalisation; therefore considers increases in appropriations in heading 1a to be a clear signal
of the future direction that EU spending should take; recalls the need for adequate public funding to create
the pump-priming effect expected of European Investment Bank cofinancing; awaits with impatience the
proposals by the Commission and Council on this subject; stresses that an increase in the long-term sub-
scribed capital would be desirable for the European Investment Fund, both to accompany the introduction
of the new mandates (including the CIP) in 2007 and to finance the new technology transfer project
operations, as wished by Parliament, the Council or the Commission;

Stresses the extraordinary technological and economic significance of

19.
the Galileo programme;
reminds the Commission that, taken over the period as a whole, this programme is underfinanced in the
new MFF and calls on the Commission to seek promptly a workable and lasting solution in order to ensure
the success of this programme;

Heading 1b — Cohesion for growth and employment

20.
Notes that the appropriations for the structural and cohesion funds are considerably lower for the
2007-2013 MFF than had been anticipated, largely as a result of the conclusions of the December 2005
European Council; considers therefore that the appropriations in the PDB should be restored; underlines the
importance of establishing and approving as quickly as possible national programmes now that the new IIA
has been agreed; stresses the importance of cohesion as one of the policy priorities of the EU; has decided
to increase payment appropriations for budget lines linked to cohesion in line with its policy priorities;

21.
Calls on the Commission to present the requisite texts and initiate procedures as soon as possible to
enable the allocation of resources for the International Fund for Ireland during the 2007 budgetary exercise;
further calls on the Commission to clarify the legal basis for the Peace Programme;

Heading 2 — Preservation and management of natural resources

Notes that 2007 will be the first year of full

22.
implementation of the most recent reform of the
Common Agricultural Policy (CAP); deplores the Council's drastic across-the-board cut in market expendi-
ture of EUR 525 million, based on accounting criteria and without taking account of Parliament's priorities;
calls therefore for the re-establishment of the figures in the PDB;

23.
Deplores the fact that in spite of the major needs for restructuring, modernisation and diversification
of Europe's rural economy, the resources allocated to rural development are set to fall in real terms; con-
siders that a voluntary transfer of funds from direct agricultural support (CAP ‘first pillar’) to rural develop-
ment is not the appropriate means for remedying this situation; expresses in this connection strong reserva-
tions about the current Commission proposal concerning voluntary modulation of up to 20 % of direct
agricultural support to rural development; calls on the Commission to conduct an impact assessment in
accordance with the Interinstitutional Agreement of 16 December 2003 between the European Parliament,
the Council and the Commission on better law-making (1) and on that basis to submit a revised proposal on
voluntary modulation;

Urges the Commission, in the absence of agreement between the co-legislators on LIFE+, to include
24.
in an amending letter the necessary modifications to allow the provisional financing of activities contribut-
ing to preparatory work and continuity of the environmental programmes;

Heading 3a — Freedom, security and justice

25.
Points out that the area of Freedom, Justice and Security, and in particular the promotion of funda-
mental rights, the definition of a common asylum and migration policy and the fight against terrorism and
organised crime, is one of the Union's key priorities; resolves accordingly to increase the resources allocated
to this area, in particular to Eurojust, the sole body for judicial cooperation between the Member States in
the criminal law field, the growing effectiveness of which must be stepped up still further;

(1) OJ C 321, 31.12.2003, p. 1.

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26.
Considers that integrated management of the Union's external borders is one of the objectives cur-
rently requiring urgent, and greater, support; accordingly backs the increase in resources made available to
the External Borders Fund; increases the resources made available to the Frontex Agency; restates its repeat-
edly made demand that Europol be placed on a Community footing in order both to increase its effective-
ness and to step up the democratic and judicial oversight to which it must be subject;

Heading 3b — Citizenship

27.
Recalls the importance of the principle of subsidiarity in the field of culture, education, training and
youth, and believes that respect for pluralism of opinion is the first condition for an effective communica-
tion policy in order to bring the EU closer to citizens; considers that better use can be made of new
communications media to bring together European policymakers from all political opinion to share ideas;
urges the Commission to clarify the budget implications of and the actions to be taken under the Plan D for
Democracy Debate and Dialogue; asks the Commission to publish on the Internet the detail of allocation of
subsidies (amounts and beneficiaries) for all actions;

Heading 4 — The EU as a global player

28.
Believes that the EU can and should be engaging more quickly and more strategically with the
process of globalisation; proposes the restoration of PDB figures on a number of lines and increases beyond
the PDB in payments and in commitments in some areas with a view to boosting EU activities through
Community programmes in the fields of foreign policy, development and humanitarian aid, and business
and scientific exchanges with key emerging countries such as China and India;

29.
Notes that the new legal framework for the EU's external actions also implies a new budget structure;
welcomes in general the simplification of instruments and the new budget nomenclature proposed with it;
welcomes also the presentation of a separate instrument on Human Rights and Democracy, which requires a
modification of the nomenclature of the PDB; cannot accept, however, that a number of the proposed
changes reduce transparency for either sectors and/or regions and countries; has introduced necessary mod-
ifications in this respect; calls on the Commission to provide also a breakdown per activity and pre-acces-
sion country and, in the interests of transparency, a corresponding nomenclature in all corresponding bud-
get lines; moreover, calls on the Commission to provide a regular monitoring report to the budgetary
authority on the progress of both the two new Member States and the pre-accession countries;

30.
Is concerned that the expansion of activities in the area of the Common Foreign and Security Policy
has not been matched by increased democratic accountability and parliamentary scrutiny; proposes budget-
ary amendments that seek to foster a greater degree of transparency and cooperation in this regard;

Heading 5 — Administration

31.
Is firmly opposed to the approach adopted by the Council in the draft declarations annexed to the
draft budget on administrative resources that advocated cutting 200 posts in the EU institutions, principally
the Commission, in 2008 and a further 500 posts between 2008 and 2010;

Decides to restore the cuts made by the Council on the Commission's administrative expenditure
functioning; however, enters

32.
including for
EUR 50 million in the reserve with four conditions as follows:

the establishment plan in order

to allow its proper

— commitment to carry out a screening exercise before 30 April 2007 providing a mid-term evaluation of
its staff needs and a detailed report on the Commission's staffing of support and coordination functions
covering all places of work;

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— commitment to set down an improved procedure in line with the Framework Agreement to include
Parliament's legislative and budgetary priorities in its legislative and work programme, allowing a pre-
sentation before Parliament in February 2007 of the Union's work programme;

— agreement on a joint programme on simplification of the Union's regulatory environment;

— commitment to provide a state of play of the review of all outstanding regulations including a report
on the Commission's activities to improve the transposition of EU law into national law to ensure that
the criteria to strengthen competitiveness are met;

33.
Is of the opinion that the European Communities Personnel Selection Office (EPSO) should introduce
radical changes in its operating methods in order to offer to the Institutions more quickly a greater number
of candidates who are more suited to the Institutions' needs;

*

*

*

34.

Takes note of the opinions voted by specialised committees as contained in report A6-0358/2006;

35.
Instructs its President to forward this resolution, together with the amendments and proposed mod-
ifications to Section III of the draft general budget, to the Council and Commission, and to the other
institutions and bodies concerned.

P6_TA(2006)0452

Draft general budget for 2007 (Sections I, II, IV, V, VI, VII and VIII)

European Parliament resolution on the draft general budget of the European Union for the financial
year 2007, Section I — European Parliament, Section II — Council, Section IV — Court of Justice,
Section V — Court of Auditors, Section VI — European Economic and Social Committee, Section
VII — Committee of the Regions, Section VIII(A) — European Ombudsman, Section VIII(B) —
European Data Protection Supervisor (C6-0300/2006 — 2006/2018B (BUD))

The European Parliament,

— having regard to Article 272 of the EC Treaty,

— having regard to Council Decision 2000/597/EC, Euratom of 29 September 2000 on the system of the

European Communities' own resources (1),

— having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial

Regulation applicable to the general budget of the European Communities (2),

— having regard to the Interinstitutional Agreement of 17 May 2006 between the European Parliament

the Council and the Commission on budgetary discipline and sound financial management (3),

— having regard to the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the
Council and the Commission on budgetary discipline and improvement of the budgetary procedure (4),
and in particular point 26 thereof,

— having regard to its resolution of 15 March 2006 on the guidelines for the 2007 budget procedure —
Sections II, IV, V, VI, VII, VIII (A) and VIII (B) and on the European Parliament's preliminary draft
estimates (Section I) for the 2007 budget procedure (5),

(1) OJ L 253, 7.10.2000, p. 42.
(2) OJ L 248, 16.9.2002, p. 1.
(3) OJ C 139, 14.6.2006, p. 1.
(4) OJ C 172, 18.6.1999, p. 1. Agreement as last amended by Decision 2005/708/EC of the European Parliament and of

the Council (OJ L 269, 14.10.2005, p. 24).

(5) Texts Adopted, P6_TA(2006)0090.