MEPs wield their new budgetary powers to enforce belt-tightening measures

Date: 09/10/1997

OVER the next few years, subsidies to the many restaurants in the different EU institutions will gradually be phased out.

The decision will be a direct consequence of negotiations on next year's Union budget. The initiative was launched by British Socialist MEP John Tomlinson, who firmly believes that the general public would find it hard to understand why the users of EU canteens should be given subsidised meals.

He started the ball rolling by recommending that the 1.2 million ecu of subsidies earmarked for the European Parliament's restaurants next year should be placed in a special reserve fund - chapter 100 of the budget, to use the formal EU jargon - and only released after a proper evaluation of all the costs involved.

Because of the upheaval surrounding the MEPs' move to their new Brussels premises, he has agreed that the full amount should be available next year. But in exchange, he has extracted a commitment from the parliamentary hierarchy that the subsidies will be phased out over three years - a policy the Parliament wants to apply to other EU institutions.

Similarly, he is recommending freezing a large part of the money being allocated to institutions for their telecoms needs in 1998. Its release will be conditional on the recipients putting out a call for international tenders to try to reduce costs. With a liberalised telecoms market in the offing, he anticipates that savings of up to 30&percent; could be available to the EU budget.

The Parliament's budgetary powers have been considerably enhanced since it began to use the strategy of freezing - as opposed to cutting - part of the funds destined for particular areas of expenditure and only releasing the money once specified policy or administrative changes are implemented.

This tactic was largely developed by British Conservative MEP James Elles a few years ago and even the threat of such behaviour can yield results.

When MEPs mooted that Commissioners' salaries might be subjected to such treatment, they soon achieved their aim of ensuring that President Santer and his colleagues itemised any outside financial interests they might have.

Elles and Greek New Democracy MEP George Anastassopoulos have employed the technique as a lever to push through changes they consider necessary to improve the public information policies of both the Commission and the Parliament.

Both believe that further reforms are necessary if the EU institutions are to disseminate a clear message to the outside world but, says Elles, “if we had not used the tactic of putting funds in reserve, then nothing would have been done”.

One frequent target for the Parliament's use of chapter 100 is the European Commission. No clearer example exists of MEPs deploying their budgetary powers to encourage administrative changes than in the saga of the institution's overseas offices in more than 100 countries around the world.

By freezing part of the offices' running costs, the Parliament forced the Commission to review its staffing levels in the different delegations, adapt these to changing demand and gradually forge separate departments into a genuine common service. Satisfied with the reforms, the Parliament last month released the remaining funds.

“We really did achieve quite a lot and we will continue pursuing this policy. Scarcity of money always focuses the mind wonderfully,” explains Dutch Liberal MEP Laurens Brinkhorst.

The Commission does not take kindly to the tactic, complaining that it complicates its ability to plan financial expenditure over 12 months and can tend to bunch spending at the end of the year. This point is taken on board by MEPs, who maintain they do not use the strategy indiscriminately.

“We are all learning from the process, but it is clear you must be selective. It should not be used as a sledgehammer. It is also very important that the criteria we set out for the money's release should be clear and not be changed,” explains Brinkhorst.