1978 BUDGET PROCEDURE: SECOND READING IN THE EUROPEAN PARLIAMENT

by Altiero Spinelli

SUMMARY: At the second and last reading, the Parliament passes the draft budget for 1978, focusing its attention on the amount of the European Regional Development Fund.

Spinelli points out that, in adopting its decisions, the Parliament must remember that it is on the point of handing over "this Institution to members elected directly by the European people".

The conflict concerning the Regional Fund worsens during 1978, becoming tougher and showing the desire of certain Governments to maintain the powers of the European Parliament within derisory limits and the determination of the Parliament to exercise its with rights concerning the budget in order to secure effective progress in the construction of Europe. The successive conflicts and in particular the rejection of the 1980 budget show that the Parliarnent's efforts will be unlikely to break the resistance of the Council and of the national administrations unless there is first a profound reform of the institutional machinary of the Community.

After the 1978 budget has been prepared and adopted, Spinelli announces to the House that he and the Communist Group are voting against it for the basic reasons explained in his speech of 13 December. In "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 13 December 1977)

Mr President, in the two previous debates on the budget I already had occasion to put the views of the majority of the Communist and Allies Group on the Commission's original proposal: while recognizing that the Commission had at least tried to draw up a budget which could indicate the policies to be followed, we stressed too the shortcomings of this budget.

Our basically negative assessment of the Council's draft budget was due to three main reasons. In the first place, this draft budget lacked any indication of the revenue policy which would have justified the overall expenditure to be met by the Community in 1978. The lack of an analysis of the Community's real possibilities led to inconclusive discussions about such matters as the maximum rate, the rate of increase and the margin for manouvre.

Secondly, our negative assessment was due to the disequilibrium between the expenditure on agricultural price support and that intended for the common policies necessary for the Community to overcome the critical situation in which it is now living.

Thirdly, the great mass of funds intended for the agricultural sector was to be badly used on price support measures instead of on a policy for the restructuring and development of agriculture. In other words these funds were to be used to maintain the structures of agricultural production regardless of their real utility to the Community.

Despite this negative judgment we have tried - and I have also tried on behalf of the majority of my group in the Committee on Budgets - to convince Parliament and the Commission of the need for constructive criticism, and I think I can say that we contributed to the achievement of certain results.

Above all I would remind you that we persuaded Parliament to enter a binding remark against Titles 6 and 7, formally calling upon the Council to give an undertaking to review in 1978 - and not at some undefined future date the regulations on the organization of the market so as to fix a ceiling on the corresponding expenditure and enable it to be transferred from the Guarantee section to the Guidance section.

Then in committee we supported the Commission's requests at least as regards non-compulsory expenditure and we found ourselves on several occasions in the front line of the struggle to gain acceptance for the Commission's proposals. In particular, we tried to obtain a minimum of effective action for regional policy, energy policy, industrial reconversion policy and social policy.

We were thus willing to vote in favour of the budget, despite our reservations on its shortcomings. But then the Council simply deleted, without any explanation, the compulsory remark entered by Parliament against Titles 6 and 7 of the budget - i.e. 314 of the total budget expenditure and not just a small item of marginal expenditure. Strangely enough we are willing to waste hours discussing some tens of million units of account but say nothing when thousands of million are at stake.

I might also point out that while the proceedings of the Council are secret, certain minutes of COREPER and of the Council show how some delegations stressed that the agricultural policy could no longer be maintained in its present form and the Council has in fact on occasion stressed the need to control both the scale and utilization of expenditure. Strangely enough, all that this House has done is to voice some displeasure without insisting on respect for its decisions. I would add that the Council tried to take another step which did not succeed at all but deserves to be stressed. During the review of the Financial Regulation it tried quite simply to abolish the provision for binding remarks. It was only after a long discussion during the conciliation procedure that the Council finally gave up its proposal and conceded the possibility of entering conditions for implementation of the budget.

A further criticism is that the budget forwarded to us by the Council does not allow the Commission to enter adequate financial provisions for industrial reconversion policy and energy policy and shows a miserly approach to the developing countries.

Finally the Council claimed the right - and this problem still remains unsolved - to fix the size of the Regional Fund on its own. I shall not attempt to make a subtle distinction between the European Council and the Council of Finance Ministers; when dealing with matters concerning the Community it is the Council of the Communities pure and simple. If the European Council prevents the Council of Finance Ministers from acting because it has already taken the decision itself, it would in future be desirable for the conciliation procedure to take place with the Council of Heads of Government who appear to decide whether certain items should be included in the budget. It seems then that the Council does not intend to change the figure - as though it had no right to do so. Recently, during the conciliation procedure, the President-inOffice of the Council said that his hands were tied: because the European Council had already fixed the sum all that the Parliament could do was to add one symbolic million to the co

mmitment appropriations.

What is more the Council is apparently claiming the right to decide in years to come. A few minutes ago I had to remind you that the only Community body which may propose expenditure is the Commission; the Council and Parliament then discuss the Commission's proposals.

Finally the Council is claiming the right to dispose of our margin manoeuvre, in other words the right to determine the overall amount to be earmarked for the Community, even though the texts clearly state that this must be a joint decision. And then the Council dares to accuse us of fanning the flames of inflation and losing a sense of moderation! The selfsame Council calmly added one thousand million to the agricultural budget, but a few tens of million - or at most one hundred million - are said to be fostering inflation!

We are not faced here with a problem of general economic policy. What we have is a tenacious determination by the Council to limit the possibilities for development and action in the Community at a time when the need for the Community is all too obvious. We are witnessing a desire to erode the rights of Parliament since although certain powers have been granted to the Commission and Parliament when it was difficult to do otherwise, they are taken away again at the first opportunity and handed over to the Member States, the governments and the national administrations.

How can the Parliament react to this situation? In our view, we must oppose any attempts to limit the functions of the Community and the effort to make Parliament hand over the right of decision to the Council.

Defence of the powers of Parliament and defence of the rights of the Community are one and the same problem at this juncture. We must engage in discussions with the Council after standing out in opposition to this way of doing things. If the discussion continues after the month of December that will not be terrible: we shall have shown perfectly clearly what the drawing up of the Community budget entails.

In taking our decisions today let us remember that this Parliament will shortly be receiving the first members elected by direct suffrage. Up to now we have managed, if only slowly and on a modest scale, to increase our importance and authority, despite the heavy pressure exerted in the opposite direction. If at this crucial juncture we give in and agree to the European Council having the last word in all our debates, we shall be simplicity recognizing that our muchvanted progress has been only superficial and that, far from being the driving force working for a resumption of European unification, the Parliament too is being gradually weakened.

I think we must oppose that development by our vote today.