19 November Budget Council

Date: 21/11/1996

THE Union is on course to maintain spending on EU policies at 1996 levels next year after ministers adopted rigorous budget proposals. As the draft 1997 budget faces its final hurdle in the European Parliament next month, planned EU expenditure now stands at 88.7 billion ecu in commitments and 81.79 billion ecu in payments.

EXPLAINING the zero-growth strategy, Irish Deputy Finance Minister Hugh Coveney said: “The budget is particularly restrictive for 1997 because of economic and monetary union and the Maastricht criteria and because of the impact on individual countries of what is happening in Europe and vice versa.” He also paid tribute to the “high degree of responsibility” the European Parliament had shown in its attitude to 1997 expenditure. MEPs had already agreed with EU governments on the need to shave 1 billion ecu from next year's farm budget and a similar amount from regional and social spending.

BUT four hours of talks between ministers and a parliamentary delegation led by French Christian Democrat MEP Nicole Fontaine failed to resolve a number of outstanding issues between the Union's two budgetary authorities. The most sensitive concerns the legal status of projects and programmes which have not been sanctioned by appropriate Union legislation, but which are still funded from the EU budget. The absence of this legal base has now raised question marks over the legality of almost 50 separate areas of Union expenditure. Ministers and MEPs failed this week to agree a procedure to clear up this uncertainty. But Coveney promised that the Irish government would use the remaining weeks of its EU presidency to try and broker a deal in bilateral meetings with the Parliament and individual governments.

MINISTERS and MEPs also disagreed over the Parliament's tactic of creating a 300-million-ecu reserve fund to boost spending on Trans-European Networks, Northern Ireland and research and development. The Parliament's approach had undermined relations between the two institutions, but a compromise reached by ministers this week effectively ensures that the funds will be available - but from different sections of the budget.

IN line with their strategy of opposing any increase in Union spending next year, ministers agreed to cut 600,000 ecu from the 900,000 ecu the Parliament added last month to the original expenditure estimates governments had agreed in July. Many of these - particularly those affecting internal EU policies - may well be reinstated when MEPs finally adopt the 1997 budget in mid-December.