Parliament set for budget showdown with governments

Date: 25/05/2000

By Simon Taylor

MEPS are heading for a bruising battle with governments over next year's EU budget after threatening to force through a massive €2-billion increase in spending unless member states provide more money for the Balkans.

Spanish Socialist MEP Joan Colom i Naval, who has drafted the assembly's initial reaction to the European Commission's proposals for the 2001 budget, says the Parliament is prepared to use its special powers under the budget-fixing rules to put up spending by the maximum amount if Union finance ministers refuse to bow to its demands.

The Parliament is strongly opposed to plans drawn up by Budget Commissioner Michaele Schreyer to bridge a 3.65-billion-euro shortfall in funding for the Balkans by raiding money from farm spending and other external relations projects.

Its tough stance not only makes a fierce tussle with finance ministers inevitable, but could also threaten the Commission's plan to provide Serbia with €1.8 billion of funding if and when President Slobodan Milosevic is toppled from power.

Under rules agreed as part of last year's Agenda 2000 package, the Parliament has the power to force a 3.2% increase in all EU expenditure apart from agriculture. This would mean that non-farm spending in 2001 would rise to around €74 billion instead of the €72 billion proposed by Schreyer.

Colom warned that if the Council of Ministers did not demonstrate a willingness to negotiate, MEPs would see this as a violation of the budget agreement and consider invoking these powers.

The MEP said he had written to the Portuguese presidency calling for an emergency meeting to try to thrash out a solution before the first formal negotiating session with budget ministers on 20 July. "The European Parliament will be very strong in its claim for fresh money," he told European Voice, insisting that the assembly was not prepared to accept any further reductions in farm spending to finance aid for the Balkans. "We cannot go any further under the line for psychological reasons," he added.

Nor, Colom insisted, would MEPs accept the Commission's plan to slice nearly €1.5 billion off other international aid projects in order to earmark money for Serbia to encourage political change. "What kind of political signal is it to suggest to a young democracy like South Africa in a very sensitive part of the world that you are cutting their budget lines?" he asked.

In a fiercely critical report on the Commission's plan, Colom says the proposal is "contrary to the principle of sound management" because it would involve increasing the budget ceiling to set aside funding for Serbia without any guarantees that the money would actually be spent.

He also criticises the Commission for 'gambling' on raising the money for the Balkans from "hypothetical savings made on the basis of a future reform", referring to the plan to shave €300 million off the cost of the EU's sugar support regime.

Colom warns that the proposed tight limits on external aid projects would leave the Union unable to cope with any new humanitarian aid crises.

MEPs are heading for a bruising battle with governments over next year's EU budget after threatening to force through a massive €2-billion increase in spending unless Member States provide more money for the Balkans.