19. We consider that the
following raises questions of political importance, but make no
recommendation for its further consideration:-
H M TREASURY
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(17908)
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Draft Council Recommendation in respect of the implementation of the general budget of the European Communities for the year 1995.
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Legal base:
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Article 206(1); qualified majority voting.
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Background
19.1 Article 206 of the
Treaty on European Union provides that the European Parliament,
acting on a Recommendation from the Council, shall give a discharge
to the Commission in respect of the Commission's implementation
of the Community Budget. The Article requires both the Parliament
and the Council to consider the accounts, the European Court of
Auditors (ECA) Report on the revenue and expenditure accounts
for the Community for the year, together with the replies of the
institutions[47],
and any special reports by the Court of Auditors on the accounts.
We have already reported on these documents[48]
and recommended a debate, which took place in European Standing
Committee B earlier today. We have also reported on the ECA special
reports No. 1/96 on the 'MED' programmes[49]
(on which we also report further today[50])
and No. 2/96 on the EU administration in Mostar[51].
The draft Recommendation
19.2 The text of the
draft Council Recommendation is appended to an Explanatory Memorandum
dated 28 February from the Exchequer Secretary (Mr Oppenheim).
No official text is available. The main issues are summarised
in the introduction to the draft Recommendation itself. After
confirming again the importance of the Commission's financial
management improvement programme (SEM 2000), the Council:
...points
to the role of the Commission as the body primarily responsible
for monitoring compliance with the rules of sound financial management...;
-- supports
the observations of the Court of Auditors on the improvement of
financial management, a process which has now begun. The study
and practical implementation of the measures within the framework
of the SEM 2000 initiative is a significant step in the right
direction. The Council welcomes the fact that the Court of Auditors
totally supports the efforts made by the Commission and the member
States acting in partnership, which are helping to resolve many
of the most blatant inadequacies pointed to by the Court in recent
years;
-- entirely
endorses the Court of Auditors recommendations that these efforts
need to be long-term ones since the Court concedes that improvements
will require efforts spanning several years."
19.3 The Council restates
its view that the Community's main problem is not a lack of resources
but rather inefficiency in their management. It therefore invites
the Commission to:
"- include
in all its proposals objectives which can be monitored and which
have a legal basis and measure them against the principles of
subsidiarity and proportionality;
-- make
a consistent assessment of current policies and present the valid
conclusions which may be drawn for future policies without the
conclusions amounting - as too frequently happens - to automatic
confirmation of ongoing Community actions and programmes;
-- continue
defining clear priorities in its expenditure proposals so that
as strict as possible a budget may be established within which
adequate flexibility can be guaranteed;
-- submit
as realistic estimates as possible so that recourse to Member
States' contributions can remain as limited as possible;
-- make
improvements in its management procedures in particular as regards
the delegation of powers to third parties, and to restrict the
involvement of consultants, a multiplicity of levels of management
and a superfluity of initiatives, particularly in the area of
external measures;
-- step
up its efforts to remove outdated commitments and eliminate the
bunching of commitments and payments at the end of the financial
year."
19.4 The Council expresses
alarm that:
"once again
the Court of Auditors has been unable to make a positive overall
statement of assurance as to the legality and regularity of underlying
transactions where expenditure is concerned. The Council considers
that this situation underlines yet again the importance of following
through the SEM 2000 initiative fully so that the Court is able
to make a positive overall statement of assurance as soon as possible.
On the other hand, the Council is pleased to note that the Court
has not pointed to any significant error with respect to the regularity
of underlying transactions where revenue is concerned. Finally,
the Court of Auditors said that the accounts were an accurate
reflection of the Union's revenue and expenditure and fewer reservations
were expressed thanks to the improvements introduced by the Commission."
The Government's views
19.5 The Exchequer Secretary,
in his Explanatory Memorandum, states that the Government is content
with the draft Recommendation. He continues:
"In particular
it strongly supports the signals sent to the Commission and Member
States in the introduction to the draft Annex, about the importance
of action under the SEM 2000 initiative so as, amongst other things,
to achieve quickly the conditions in which the Court of Auditors
can give a positive global assurance in future about the legality
and regularity of payments made from the Community budget."
19.6 The Minister notes
that the draft Recommendation will be considered by the Council
of Economic and Finance Ministers (ECOFIN) on 17 March.
Conclusion
19.7 We note the information
provided by the Exchequer Secretary, and the critical but cautiously
optimistic line proposed in the draft Council Recommendation.
The issues raised are without doubt matters of political importance,
but they are the issues which were debated in European Standing
Committee B today and we see no justification for a further debate
now. Although the text now before us is not described as "official",
we consider it to be complete and authentic, and on that basis
clear the document.
47 (17750) OJ No. C 340, 12.11.96; see HC 36-xi (1996-97), paragraph 10 (29 January 1997), and HC 36-xii (1996-97), paragraph 1 (5 February 1997). Back
48 (17852) OJ No. C 395, 31.12.96; see HC 36-xii (1996-97), paragraph 2 (5 February 1997). Back
49 (17441); see HC 51-xxix (1995-96), paragraph 14 (16 October 1996). Back
50 See paragraph 13. Back
51 (17877) OJ No. C 287, 20.11.96; see HC 36-xiv (1996-97), paragraph 9 (12 February 1997). Back
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