Parties square up for annual budget battle

Date: 09/11/1995

By Rory Watson

SPENDING next year on the European Union's ambitious programmes for trans-European networks and the Mediterranean is shaping up as the main budgetary battle between EU governments and the European Parliament.

Governments will decide next week how to react to the decision by MEPs last month to cut back projected spending on both schemes in 1996, despite the importance given to both by EU leaders at their Cannes summit in June. At stake is a discreet power struggle over the shaping of Union policy.

“We will have to work out how to respond on a number of key issues which cover both internal and external policies and a number of the Parliament's pet projects like a European peace corps,” says one Brussels-based diplomat as EU budget ministers prepare for their next meeting on 17 November.

MEPs want to trim 200 million ecu off next year's Mediterranean programme, arguing that few believe the total sums involved could be fully spent next year. They also voted to cut 50 million ecu off trans-European networks and to freeze a further amount until satisfied that the EU funds are being properly spent.

Commenting on the Parliament's tactics, one senior MEP predicted: “Governments have got a really different Parliament in front of them this time. We have introduced budgetary cuts and set priorities. The Council of Ministers will now have to set its own priorities and get into a discussion with us on policy.”

The Spanish presidency has already foreseen such a possibility. It is preparing to host a lunch between EU budget ministers and a delegation of MEPs on 17 November to see what scope there is for common ground before the draft 1996 budget is finally approved by MEPs in December.

Despite the different emphasis governments and MEPs are placing on certain policy areas, this year's lengthy EU budgetary process has also witnessed a gradual merging of interests between the main institutions.

An informal working group was established for the first time in April to consider the scope for savings on administrative issues.

It is recommending that there should be more cooperation and consultation on practical matters like tenders and purchases so that the institutions do not end up bidding against each other.

Nor is agricultural expenditure - a regular bone of contention - dividing the two institutions this year. Both are prepared to wait for the ruling by the European Court of Justice, expected in early December, on the legality of the decision by MEPs last year to reclassify certain categories of farm spending so that they could have the final say on the amounts involved.

But disagreements are emerging over the nature and scale of EU help to the former Yugoslavia after MEPs specifically allocated money for the rebuilding of Sarajevo, reconstruction of certain republics and aid for refugees.

EU governments, while not disagreeing with the sentiments involved, are expected to argue that the Union should not tie its budgetary hands in advance, especially if this means fewer funds for other foreign policy initiatives next year.

A number of governments are sceptical about the Parliament's decision to set aside money for a new scheme, to replace the one now ending, to provide interest rate subsidies for small- and medium-sized enterprises. They argue that the time it would take to pass the necessary legislation would be such that few payments could be made in 1996.

“They are putting the cart before the horse and we are also not sure about their proposal for a European peace corps,” explained one EU diplomat.

Considerable distance also needs to be bridged between the Council and Parliament over the future treatment of the growing number of specialised agencies which are now dotted around the Union. MEPs would like to introduce greater legal and budgetary order into their different arrangements.

But according to one national official: “The agencies are not all the same. They do not do the same thing. Some aim to be self-supporting quickly. So there should not be uniform arrangements for them all.”