MEPs shy away from budget fight

Date: 13/07/2000

By Simon Taylor

THE European Parliament is set to back down in its fight with EU governments over demands for an increase in the Union's budget next year, despite finance ministers' plans to slash €1.3 billion off the spending proposals.

EU governments want to make large cuts in spending on agriculture, and external relations and enlargement-related projects to limit the overall increase in the 2001 budget to 3.6%, instead of the 5% proposed by the European Commission in May.

The Parliament had threatened to force through a €2-billion increase in the budget unless member states agreed to increase the sums allocated to certain policy areas to pay for extra aid for Kosovo. But senior MEPs said this week that the assembly would broadly accept the amendments proposed by finance ministers, provided a few changes were made to planned reductions in certain areas.

Spanish Socialist MEP Joan Colom I Naval said the Parliament had lost its stomach for a fight with EU governments because the Commission had not supported its call for extra funds. "The proposal from the Commission makes it very difficult for us to fight alone," he said. "We do not like the fact that there is no multiannual programme for the Balkans, but we are not going to break the terms of the inter-institutional agreement over this."

National budget officials also predict that MEPs will fall into line with the new proposals. "This is a credible, coherent draft budget. If the Parliament does not accept this, it is not being a responsible part of the budget-fixing process," said one.

Under draft plans due to be agreed by budget ministers at a meeting next Thursday (20 July), overall spending in 2001 would be €92.57 billion, compared to the €93.87 billion proposed by the Commission. More than €500 million of the savings would be found from the farm budget, where €250 million would be shaved off spending on arable crops and €225 million from rural development.

In the external relations field, finance ministers want to cut €85 million from the MEDA assistance programme for Mediterranean countries. The Commission had planned to allocate just over €1 billion to the scheme.

Colom said that although the Parliament accepted that there was a major backlog of unspent funds for the EuroMed programme, the proposed reduction in the budget for it would have to be scaled back. "Even the Commission will come back and ask for something in between what it has asked for and what the Budget Council is proposing," he predicted.

Finance ministers have also shaved €300 million off the Commission's budget for programmes to help the candidate countries modernise their agricultural sectors, improve environmental standards and upgrade transport links.

The move reflects EU governments' determination to keep a tight grip on spending. Budget Commissioner Michaele Schreyer has proposed limiting expenditure to 1.07% of the Union's 15's total economic output next year, but proposals drawn up by finance ministers would reduce the figure to 1.055%.

The European Parliament is set to back down in its fight with EU governments over demands for an increase in the Union's budget in 2001, despite finance ministers' plans to slash €1.3 billion off the spending proposals.