1. We consider that the following raises questions of political importance,
and recommend its further consideration by European Standing Committee B, together with (17484)
9372/96, Draft General Budget of the European Communities for 1997; (17511) SEC(96)1677, Letter of
Amendment No. 1 to the Preliminary Draft Budget for 1997; (17594) PE 252.764, European Parliament
modifications and amendments to the Draft General Budget for 1997; and (17598)--, the Commission's
Letter of Amendment No. 2 to the Preliminary Draft Budget for 1997, already so recommended:--
H M Treasury
(17673)
-- |
Council Decisions on the European Parliament's proposed amendments and modifications to the
Draft General Budget of the European Communities for the financial year 1997. |
| Legal base: |
Article 203; qualified majority voting. |
Background
1.1 We have already reported on the Commission's Preliminary Draft Budget[2] for 1997; there was a debate in European Standing Committee B on
10 July.
1.2 On 30 October we reported on the Council Draft General Budget for 1997[3] and recommended a further debate. We have since recommended for
debate at the same time: the European Parliament's proposed modifications and amendments to the
Council's Draft General Budget[4], and two Letters of Amendment
(Nos. 1 and 2) to the Commission's Preliminary Draft Budget for 1997[5] [6].
1.3 The present document is the Council's response to the modifications and
amendments proposed by the European Parliament to the Council's Draft General Budget. It is
described in an Explanatory Memorandum, dated 29 November, submitted by the Exchequer Secretary to
the Treasury (Mr Oppenheim). The summary tables referred to in the extract are reproduced below.
Extract from the Exchequer Secretary's Memorandum
"A summary table comparing the Council's second reading DB with the financial
perspective (FP) ceilings is attached at Annex A. Compared with the European Parliament's
proposals, the Budget Council's amendments and modifications reduce appropriations in categories
3 (internal policies), 4 (external action) and 5 (administrative expenditure). The effect of the
Council's decisions would be to leave a margin of 1,470 million ECU (£1,150 million) in
commitment appropriations and 3,930 million ECU (£3,074 million) in payment appropriations
below the overall financial perspective ceilings. The Council's second reading DB at 1.20 % of
Community GNP is significantly within the new own resources ceiling of 1.24% of Community GNP.
"The table at Annex B sets out the main figures in the Council's second reading DB for
commitments in ECU. It compares them to the Commission's amended PDB, the Council's first reading
DB, and the European Parliament's first reading DB; and in percentage terms to the 1996 adopted
budget. The table at Annex C converts these into sterling. The tables at Annex D and E show similar
figures for payments.
"The Council's second reading DB proposes a total of 88,759 million ECU (£69,425
million) in commitments, which is:
--1,313 million ECU (£1,027 million) below the Commission's PDB;
--298 million ECU (£233 million) above the Council's first reading DB;
--427 million ECU (£334 million) below the European Parliament's first reading DB; and
--2.58 per cent above the 1996 adopted budget.
"The Council's second reading DB proposes a total of 81,877 million ECU (£64,042
million) in payments, which is:
--2,644 million ECU (£2,068 million) below the Commission's PDB;
--231 million ECU (£181 million) above the Council's first reading DB;
--637 million ECU (£498 million) below the European Parliament's first reading DB; and
--0.01 per cent below the 1996 adopted budget.
Compulsory and non-compulsory expenditure
"The percentage increases in commitments and payments in the Council's second reading
DB from the 1996 adopted budget, for both compulsory and non-compulsory expenditure, compared to
the Commission's PDB and European Parliament's DB are as follows:
| Council second reading DB | Commission PDB | European Parliament DB
|
| Commitments: | | | |
| compulsory expenditure | -- 1.49% | 0.87% | -- 1.48% |
| non-compulsory expenditure | 6.68% | 7.35% | 7.66% |
| Payments: | | | |
| compulsory expenditure | --1.17% | 1.21% | --1.16% |
| non-compulsory expenditure | 1.29% | 5.48% | 2.94%
|
"The changes which the Council's second reading DB makes to the European Parliament's
DB concern categories 2-5 of the financial perspective. The main points in commitments are:
Category 2: structural actions
"The Council have reinstated the funding for the Irish Peace Process (100 million ECU
(£78 million)) which the European Parliament placed in a reserve. The Council has created a
100 million ECU (£78 million) negative reserve to finance expenditure on Community initiatives.
Category 3: internal policies
"The Council placed in a reserve extra provision for trans-European networks (100
million ECU (£78 million)) and Research (74 million ECU (59 million)). The Council also
recognised the need to reduce many of the increases proposed by the European Parliament. In
particular, the Council reduced the amendments proposed to other social operations by 65.9 million
ECU (£51.5 million), to information and communication by 61.5 million ECU (£48.1 million),
to education, vocational training and youth by 29.7 million ECU (£23.2 million) and to the
internal market by 27.3 million ECU (£21.3 million). Overall the Council left a margin below
the category 3 ceiling of 140.7 million ECU (£110.0 million) compared to the European
Parliament's DB of 74.1 million ECU (£58 million).
Category 4: external action
"The Council restored the 154.1 million ECU (£120.5 million) transferred from
co-operation with Central and Eastern European countries to co-operation with former Yugoslavia by
the European Parliament. The Council also reinstated the cut of 20 million ECU (£15.6 million)
to the Common Foreign and Security Policy and the minor cut of 5.3 million ECU (£4.1 million)
to co-operation with Mediterranean countries. In doing so, the Council reduced a number of the
increases that the European Parliament proposed. In particular, the Council reduced other
co-operation measures by 81.4 million ECU (£63.7 million) and other external aspects of certain
Community policies by 38 million ECU (£29.7 million). A number of smaller changes have also
been made. Overall the Council left a margin below the category 4 ceiling of 221.9 million ECU
(£173.6 million) compared to the European Parliament's DB of 126.7 million ECU (£99.1
million).
Category 5: administrative expenditure
"The Council have proposed a small reduction to the Commission's administrative
expenditure of 38.2 million ECU (£29.9 million) and minor reductions to other institutions'
expenditure. Overall the Council left a margin below the category 5 ceiling of 107.1 million ECU
(£83.8 million) compared to the European Parliament's DB of 68.4 million ECU (£53.5
million).
Union priorities reserve
"The Council struck out the European Parliament's proposed Union priorities reserve
from the budget on the grounds that it was not legal and potentially breached the Financial
Perspective ceilings on spending."
1.5 The Minister notes that the European Parliament will consider the Council's
Second Reading Draft Budget at its plenary in mid-December.
Conclusion
1.6 The Budget raises matters which are of significant political importance. As
is to be expected, the Council has reacted to the European Parliament's proposals for amendment and
modification of the Council's first reading Draft Budget by proposing expenditure which is
significantly less than proposed by the European Parliament, though nevertheless higher than
proposed in the Draft Budget. An important feature, however, is that the second reading Draft
Budget still proposes that payments in 1997 should be marginally less than in the 1996 adopted
Budget. In other words, it still aims at a standstill in expenditure.
1.7 We have already recommended a further debate on the 1997 Budget, and we
recommend that this proposal should also be debated with those other documents.
2.(17251)--; see HC 51-xxiii (1995-96), paragraph 3 (26 June 1996). Back
3.(17484) 9372/96; see HC 36-i (1996-97), paragraph 3 (30 October 1996). Back
4.(17594) PE 252.764; see HC 36-iii (1996-97), paragraph 2 (13 November 1996). Back
5.(17511) SEC(96) 1677; see HC 30-i (1996-97), paragraph 4 (30 October 1996). Back
6.(17598)--; see HC 36-iv (1996-97), paragraph 2 (20 November 1996). Back
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