Protests over long-term budget restraints

Date: 02/10/1997

By Rory Watson

HOSTILITY is growing among MEPs to the European Commission's plans to extend the existing straitjacket on EU expenditure well into the next century.

As the European Parliament picks its way through the Commission's Agenda 2000 programme, doubts are being raised about the viability of its twin strategy of overhauling key policies and increasing Union membership while keeping within the existing strict budgetary limits.

Aware of the difficulty of winning support from either the public or national parliaments for any increase in EU expenditure in the current economic climate, the Commission has suggested that the present arrangements should be extended for a further seven years when they end formally in 1999.

The plan would prolong until 2006 the 1992 agreement between EU leaders that the 'own resources' available under the annual Union budget should not exceed 1.27&percent; of member states' gross domestic product. But this proposal has already run into opposition within the Parliament, which shares responsibility for the EU budget with national governments.

“I feel that the Commission's 1.27&percent; stance reflects an authoritarian approach as we do not know how things will develop. We could extend it for a year or two, but we are not in a position now to lock it until 2006,” said Greek Christian Democrat MEP Efthymios Christodoulou.

A former finance minister and ex-governor of his country's central bank, Christodoulou is helping to prepare the budget committee's input into the Parliament's assessment of the Agenda 2000 programme.

“Enlargement is something that defines the budget from now on. If this is to be approached seriously from a budgetary and fiscal point of view then the number of new members, the sums of money involved and the accession dates will all have an impact. The factors are all interrelated and there is a logical inevitability in this,” he explained.

Similar criticism is emerging from the other side of the political divide in a report on the Union's future financing from Spanish Socialist MEP Joan Colom I Naval.

“The two previous financial packages were accompanied by raising the own resources ceiling as a result of an assessment of requirements. This time around, it looks like there has been a change or reversal of approach,” he complained.

In addition to questioning the concept of a seven-year extension for the existing budgetary ceiling, MEPs are also expressing scepticism about the economic hypotheses upon which the Commission has based its estimates.

They point out that the Commission's conclusion that there will be sufficient funds in the budget by 2006 is based on the assumption of 2.5&percent; economic growth per year.