1978 BUDGET PROCEDURE: COMMISSION'S DRAFT

by Altiero Spinelli

SUMMARY: The Parliament considers the draft preliminary Community budget presented by the Commission for the 1978 financial year.

This debate constitutes one of the parliamentary phases of the budget preparation procedure, during which the Parliament is one of the two branches of the budgetary authority. The parliamentary phases are normally concluded by four debates in plenary session: 1) consideration of the Cornmlssion's preliminary draft; 2) consideration of the Council's draft; 3) first reading in Parliament; and 4) second reading in Parliament and final adoption of the budget. As will be seen in relation to a number of Spinelli speeches, these phases are sometimes preceded by a general debate on the general outlines of the financial policies of the Commission and the Parliament for the following budget.

For five years (1977 to 1981) Altiero Spinelli has been one of the leading figures involved with the European Parliament's budgetary policy; the most important action taken by him has related to the preparation of proposals on the own resources of the Community (in September 1979 Spinelli proposed that an appropriate working group should be established, was appointed president of it and was rapporteur for the general report drawn up by the working group and approved by the Parliament on 9 April 1981); to the European Parliament's position on loans in the Community (he was rapporteur for the Committee on Economic and Monetary Affairs and for the Committee on Budgets in 1978, 1979 and 1980); and, finally, to the preparation of the Community budget for 1982 (he was rapporteur general for the Parliament in 1981). In "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 7 July 1977)

Mr President, this debate on the budget has a special importance - as various speakers have already pointed out - for different reasons. First of all, in presenting this budget, the Commission has had the courage to say that it will formulate the budget in terms of European units of account, even though the Council has not taken any formal decision to this effect, so as to spur the Council to do so. It is also particularly important because the Commission, having decided to base itself on own resources, is thus bringing to bear a certain pressure on the Member States. But I believe that it is also important for a third reason, namely that this is one of the rare debates in which this Parliament has real powers even though they are limited ones. This debate must therefore show that Parliament does have powers which it is prepared to use.

Homage has been made to some of the figures of European political life and in particular my ex-colleague, Mr Cheysson, who prepared all the drafts, but I should not like us to forget to render homage to our own president Spénale, who guided Parliament through a difficult time with tenacity and courage. It is partly thanks to him that our debate today has acquired this importance.

Allow me then to make some remarks on the revenue side of the budget.

The first is this. We now have a possible reserve for increasing the funds of the Community which is the non-utilised part of that 1 % which may be put on VAT which this year amounts to approximately 1 600 million. While it is true that the Commission in its triennal forecasts considers that this will increase in the future, new projects have not been taken into consideration nor the new expenditure associated with them.

We have reached the limit of the ability to use the own resources at the very moment in which they have become available to us. A couple of 'hiccups' in agricultural prices will be sufficient to take up the best part of them. if, as I hope, the Community adopts the commitment proposed by Vice President Ortoli, to institute a reconversion fund, there will be a further erosion of this ability.

Now, considering that this community is living on a really archaic system of taxes, a system of taxes which is completely lacking any element of justice in the sense that the rich of whatever country should pay proportionately more than the poor, I should like for this Assembly, in one of its debates, to make a formal request to the Commission to study the application of an article of the Treaty which does in fact allow for other types of tax and examine the possibility of creating for the Community more rational and more just taxes than those which it has at present.

I should now like to turn to expenditure. Bearing in mind the mission, the vocation of the Community as it is defined in the treaties, expressed in our debates and the resolutions which we adopt, it is clear that there is a strong contradiction between what we should be and what we are, between the problems we are tackling and the problems which are in fact facing us.

As for the important and serious aspects of economic policy which the Community ought to be facing, the Community's participation expressed in figures is really marginal. With one exception which does not concern the agricultural policy proper which is guidance policy, transformation policy and aid to agriculture (which is in fact treated as a cinderalla just like energy policy, social policy and so on). The only policy which has been given particular attention is that of agricultural prices but this is not agricultural policy.

When it came into office the present Commission announced that it would take a different approach to agricultural policy. I would have expected it to translate this intention into budgetary terms in some way, and in addition to the shrewd remarks made by Mr Aigner who said that the Community is assuming functions which have to be taken away from national governments because they are conducted more efficiently at Community level, there should be an analysis of the priorities and some indication should be given of the financial amounts to be used to face the tasks of which we have spoken and these are how to overcome inflation, stimulate investment, restructure and create full employment, encourage research, reorganize agriculture, avoid violent fluctuations in agricultural prices and also aid developing countries. These are largely the responsibilities of the governments but in order for there to be a process of integration, some of these operations will have to be transferred to the Community from national g

overnments.

If we had presented these matters in this way, we would have avoided the accusation that we were spendthrifts and wanted to impose extra taxes and other charges on the people. In this case we would have replied to the governments: you are the ones who do not wish to reduce some of your own expenditure, however much you recognize that a joint effort is required.

This we have not done although it would have been the only way to make it clear why the budget of the Community must have a certain size and certain priorities.

Why was this not done? There are basically two reasons: first of all because we are overloaded by the EAGGF commitments, because having made all the possible criticisms of the expenditure of the agricultural policy, the regulations are there, the commitments are there and they have to be complied with. Provision therefore has to be made for certain sums and then, having made the appropriations, we find that a large part of them have already been spent and there is no great wish nor the courage to ask for more.

I realize that one cannot change the system overnight but this ought to be one of the points on which Parliament should make it clear to the Commission and the Council that it is demanding a complete break with the past. How can this be done? For example, at our next part-session in September, we could not adopt the budget unless - I won't say unless the regulations on agricultural prices are changed straight away - but unless the Commission has first submitted the fundamental criteria for change and the Council has given its agreement in principle to this change. This will not yet be a real change but at least we would know that there is a real programme and not just a verbal one, for transforming agricultural policy.

If we satisfy ourselves with the fine words spoken by Commissioner Gundelach - whose good faith I do not doubt because I know him very well and I know his opinion of the present situation - we shall lose the battle and next year we shall find ourselves with a budget dominated by the present system without any change in agricultural policy. Now if one considers that parliaments by making use of their instruments of power or influence have succeeded in imposing their will, I do not see why our Parliament as well should not take up a firm position.

The second reason for this lack of vision is the fact that the Commission, fearing that the appropriated sums might appear too high and frightened of having to tell the governments 'this is something which you will have to reduce in your expenditure' it has merely entered 'token entry'. I know that a token entry is made in a balance sheet when one does not intend to proceed with expenditure straight away but one wishes to note the fact that it will be made at a later time. What I do not understand however is why a token entry should be made when for example the Council has decided to allow the Community to issue loans up to 500 million to cover possible deficits in the budget. In this case the Commission ought to have said 'I have not yet committed all these appropriations but I have entered them just the same because I foresee that they will all be used'. Another reason why I cannot understand this is that the Commission has already submitted proposals to the Council concerning the industrial, aeronautical

and data-processing sectors which are sectors which we have discussed and rediscussed in view of their great importance. Why then merely enter token entries when there are serious ambitious programmes such as that - which I absolutely support - laid before the Council by President Ortoli and for which he requested authorization to issue loans for structural reconversion projects.

This present budget does contain some new elements but it is still largely a book-keeping operation. It is basically lacking that dynamism which has been requested from all sides including ourselves and which is indispensable for carrying out a real Community policy.

I hope that in the course of this debate we shall be able to make some improvements but the most important thing is to get the Council and the Commission with their backs to the wall and tell them that we wish to set in motion a review process not just to destroy the agricultural policy but to replace it with a sounder one.

Our German-speaking colleagues will have been able to see yesterday on television the sacks of flour and drums of milk which are accumulating all the time because of this policy, and they can imagine what this will cost, beyond every expectation, to the milk prices policy.

These are the basic remarks on the nature of the budget which should be made at this stage in our consultations with the Council.