MEPs ready to hold the bottom line

Date: 15/10/1998

MEPs will use next week's budget debate to try boost their role in the decision-making process. Rory Watson reports

NEXT year's European Union budget will be unique. It will be the first to be denominated in euro, the last in the current seven-year set of budgetary guidelines, and it will mark the end of a number of existing EU programmes.

All these factors are influencing the European Parliament's strategy as it prepares to carry out its first examination of the 1999 spending estimates in Strasbourg next week.

Politically, MEPs see the budget as a bridge between the present and the future financing arrangements which are due to operate from 2000.

They will also use it to try to strengthen their input into the Union's financial decisions by arm-wrestling governments into a new agreement which would tilt the procedure more in MEPs' favour.

"We must in some way ensure this budget leads to a new inter-institutional agreement. We will tell Union governments that if they want a new agreement, they must come and talk to the Parliament," says Spanish Socialist MEP Bárbara Dührkop, who is preparing the Parliament's opinion on the 1999 budget.

The existing agreement has largely ensured budgetary peace between the different EU institutions since 1982. Implicit in Dührkop's statement is the threat that without a new one, approval of the annual spending estimates would become a far more harrowing exercise.

The prospect of budgetary fights with the Parliament every autumn is not one most EU governments would relish and, as a further form of pressure, some MEPs are hinting that approval of the package of regional, social and agricultural reforms could be blocked next year if their demands are not met.

Next week, the Parliament will set out what it wants to see in the new deal, including greater flexibility to move funds between different categories of spending. This would allow unused funds to be switched from one policy area to another and give MEPs a say in all agriculture expenditure for the first time.

They also want annual estimates to be made of the needs of the Union's existing and future members, rather than figures being set in stone in advance. Their aim is to avoid repeating past mistakes, such as when EU leaders agreed six years' worth of regional and social spending in Edinburgh in 1992, and funding for foreign policy initiatives in Cannes three years later, only to find out subsequently that the money could not be spent.

"It is silly to fix figures in concrete for 2005 or 2006 when no one knows what will happen or how much funding countries will be able to take up. At the moment we have a huge amount of almost 11 billion ecu underspent, much of it from structural funds," complains British Conservative MEP James Elles.

As a result, the Parliament is likely to place 1.5 billion euro earmarked for regional and social spending in a special reserve. The move is designed to send a clear political message to countries such as Italy and Germany, which have difficulty spending the funds allocated to them because of their reluctance to provide matching finance from their own treasuries and have below average implementation rates.

"The Parliament is not rewriting the Edinburgh agreement. The money still belongs to each country to which it was assigned. But it will be put in a reserve until they want it or could be carried over to 2000 if they wish," explains Dührkop.

The inability of potential recipients to absorb the funds available to them is also behind the Parliament's likely move to cut 200 million euro from the Phare programme for central and eastern Europe.

"Phare is working very badly. There is a lack of capacity to absorb the funds in the candidate countries and it is a very bad message to say that you cannot spend it so we are giving you more," says Dührkop. "Politically, we will have to tell the countries that the money is not lost. But we must move to a realistic accession budget and not just have the money there because it was decided in Cannes."

Equally, part of the Tacis funds for Russia will be frozen until the European Commission can convince MEPs that they are being wisely spent and it has produced a global strategy to tackle the financial and government crises wracking the country.

Concern at the misuse of EU funding overseas also lies behind a Christian Democrat-led move to freeze the Union's humanitarian aid budget next year until allegations of fraud and financial irregularities have been cleared up.

But the area where the Parliament is expected to make the greatest changes to the Union's 96.5-billion-euro budget is in internal policies.

This spending was drastically cut back by budget ministers in July; so much so that the planned 1999 outlay of 5.45 billion euro is now well below this year's level.

"Just look at the declaration from the Cardiff summit with its talk of the need for a Europe of knowledge and social policy. That was in June. What happened in July? Budget ministers cut social policy. The Council of Ministers said Leonardo was a real success and then they cut its funding. It is totally incoherent," complains Dührkop.

"The difference between the European Parliament and the Council of Ministers is that we make policies which respond to the needs and wishes of the citizens of Europe while they are just worried about the bottom line so that the numbers add up."

The areas which were hit hardest by government cost-cutting are among the Parliament's priorities: education and training; protecting the environment; fostering Europe's cultural heritage; and promoting employment opportunities, especially within small and medium-sized enterprises. MEPs are likely to demand that all these budget lines are raised, at least back to the levels originally proposed by the Commission.

Despite this, the Parliament, in line with the Commission and member states, supports the concept of a rigorous budget as the Union prepares for monetary union.

Indeed, it is likely to take EU governments to task for their failure to apply tighter controls on agricultural expenditure and their refusal so far this year to involve MEPs in finding ways of achieving this.

Next year's budget will also be the last for a large number of the Union's multi-annual programmes. Heading the list come the structural funds with expenditure of 37.5 billion euro, but it also includes the Phare and Mediterranean programmes (2.3 billion euro and 1 billion euro respectively).

Internal policy areas where current programmes are coming to an end are dominated by research and development (3.5 billion euro), but they also range across a broad spectrum of education and cultural schemes such as Socrates, Youth for Europe, Leonardo and Voluntary Service, with a 420-million-euro budget, and the 132-million-euro Life environment project.

The Parliament will be looking for a clear commitment that successors to many of these initiatives will be in place by January 2000, to avoid disruption of ongoing work.

As usual, MEPs also look set to use their budgetary powers to strengthen their influence over the Commission's staffing policy.

Their latest target is 'parachuting': the practice of giving Commissioners' personal advisers plum jobs over the heads of longer-serving officials.

They intend to ask the Commission how many management posts, up to the rank of A3, have been given to cabinet members since January 1995 - the date which marks the arrival of the current team of Commissioners.

And as the present crop of advisers start to plan their future in the Commission once their political masters leave at the end of next year, the Parliament wants to know how many of the most senior posts, from grades A1 to A3, are currently vacant.

The MEPs' inquisitiveness extends even further. They are seeking information on the number of middle-management posts (A5 and above) which are occupied by officials who have not passed the Commission's stiff entry competition or who have only sat an internal exam.

But, without doubt, the Parliament's main priority is to strike a new deal with EU governments and the Commission which will increase its budgetary powers in the years ahead.

Major feature. MEPs are working on boosting their role in the budget decisionmaking process, and tightening up budgetary procedures in other EU Institutions and agencies.