Compromise on the cards in budget power game

Date: 19/11/1998

By Rory Watson

ARGUMENTS over the level of EU spending in 1999 will be overshadowed next week by a wider power play over the budget, which is pitting MEPs against EU governments.

Union budget ministers will insist that the European Parliament must withdraw its plan to create a special reserve of 2.3 billion ecu as a lever to increase its power over the Union's purse-strings.

"Governments are insisting that the Parliament withdraw this amendment before there can be any discussion on other aspects of the budget. If it does not do so, then the Council of Ministers will go back to the rigorous financial situation it laid down in July," explained one official closely involved in the negotiations.

Before the summer recess, EU governments cut millions of ecu off a range of 1999 internal policies, in particular those geared to training, research and youth programmes. These have since become a budgetary ping-pong ball between the two institutions, with MEPs reinstating the proposed increases last month.

Many of the member states, which would have to increase their monthly payments into EU coffers from January if the Parliament sticks to its guns, believe the strategic reserve is both politically and legally unacceptable. Some even argue that it should be challenged in the European Court of Justice.

But the initiative is strongly defended by MEPs who consider it a useful insurance policy in their quest to increase the Parliament's influence in the Agenda 2000 negotiations on regional, social and agricultural reforms, which will only come to a head after the 1999 budget is approved.

However, confidential talks between senior MEPs and the Austrian EU presidency this week produced signs of a possible compromise, with the Parliament looking for firm guarantees that existing budgetary arrangements will be changed when they are re-examined next year.

If a deal can be hammered out before EU budget ministers meet next Tuesday (24 November), the way will be clear for the budget to be approved by the Parliament shortly before Christmas.

Provided the 2.3-billion-ecu strategic reserve is withdrawn, MEPs are likely to succeed in overturning many of the 200-million-ecu-plus cuts in internal policy spending agreed by ministers in the summer.

Under present plans, the axe would fall on Trans-European Networks (-30 million ecu), research (-55 million ecu), EU refugee funds (-10 million ecu), Mediterranean programmes (-28 million ecu), Phare (-69 million ecu), Socrates (-7.8 million ecu) and youth projects (-1.9 million ecu).

Governments have already indicated that they can agree to the Parliament's move to slice 513 million ecu from 1999 farm expenditure, 500 million ecu from regional and social spending and freeze a further 1.5 billion ecu, on the grounds that this money is unlikely to be spent and therefore should be kept in a reserve fund.