1979 BUDGET PROCEDURE: COMMISSION'S DRAFT

by Altiero Spinelli

SUMMARY: This debate marks the start of the parliamentary budget procedure for 1979, the last budget discussed and votcd upon by the Parliament before the direct elections.

As can be inferred from Spinelli's intervention, the matters at issue in the inter-institutional dispute regarding the 1978 budget have arisen again, and in certain cases (such as that of the Regional Fund) the conflict is Greater than in the previous year. In "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 3 July 1978)

Mr President, last year the budget was approved by a majority vote of Parliament and opposed by my group alone. Well, I must confess that, considering the debate that preceded that budget and some of the things said and votes cast on that occasion, I had expected the Commission, in drawing up the preliminary draft budget for 1979, to bear in mind what had happened last year. Instead, with this budget the Commission shows, I won't say a lack of ambition, but at the least a shortage of ideas: it shows an inward-looking attitude, it shows us the image of a cautions Community which is only prepared to let its expenditure rise when it comes to safeguarding or defending a given situation. Lacking is that grand design, that pioneer spirit, in the various Member States, in the Community as a whole and as regards the rest of the word.

In justifying this negative stance of mine, I shall confine myself to a series of precise examples, since, only just having received the text, this is the only way I can proceed.

As for the Revenue section, it is not enough to announce that the increases are down on past years, without explaining why. It is not enough to ask all the Member States to start tightening their belts. What we were expecting from you was rather a kind of 'fresco' of the public finance activities of the whole Community, an analysis of the efforts being made and a picture of the general context against which to see Community public spending. But this analysis is lacking and people just keep telling us to tighten our belts, thus showing that they have no Revenue policy, however much we all may boast about our own resources. Mr Commissioner, I hope that the time has come for us to start clearing up our ideas about the new income that will come from the 1 % VAT ceiling because, given the slowness of the Community legislative machinery, we really have no time to lose. We must start finding out what the new Community taxes will be, as this budget already brings us up to 0. 7 5 % of the net taxable total.

And now we come to the Expenditure section. As for social policy, the Commissioner told us that there had been considerable development. This is true: there has been very considerable development, even if we recognize that, in effect, the Community's social policy, as it has developed, also includes national policies. It could still be maintained that, if it did not exist, the Member States would manage all the same by themselves. Nevertheless, there is one field in which the Community absolutely has to intervene, especially as things stand at present. I am talking here of measures designed to help us cope with the consequences of industrial redevelopment and boost our collapsed economy. And what have you done? Opposite these measures you have rnade a token entry, thereby showing that you have no idea how to intervene to face the consequences of redevelopment.

With regard to regional policy, we were told that the European Council had its own ideas; but the only valid commitment is the one we made in year one. You said, quite, rightly, that expenditure cannot be laid down unless there are corresponding commitments. However, the Commission then went on actually to cut back expenditure on regional policy instead of increasing its commitments. I was pleased to note that you have at last entered an extra-quota appropriation which will give the Commission a more efficient structure for drawing-up regional policy and which will mean that the Commission will no more be confined to the role of sharing out funds amongst the Member States according to the pressure they exert.

But even here I must note with displeasure that you have only made a token entry, without even laying down a minimum starting point. Putting in a token entry in the course of the year is the same as leaving a blank, because to do that, we have to transfer money from some other heading of the Regional Fund, which is impossible as there will be nothing left to transfer.

As for industrial policy, there is a big increase which, however, would only have a short-term, palliative effect.

Furthermore we have here a policy primarily aimed at industries in decline, industries in crisis, but this policy lacks a wide enough perspective. It was not without some surprise that I noted no progress whatsoever towards a common aerospace policy. Instead, we see the same old ritual of making the relevant entry and having people believe that we are giving consideration to the necessity of developing a policy for an industry of the future.

As regards the new financial instrument, the so-called Ortoli facility, the Commission has got what it needs: a means of intervention. We would like to ask, however, whether the Commission has realized that the object of the exercise is to formulate financial policy and not simply to supply furhter liquidity to swell those already existing in the financial world.

Now I come to energy policy. Mr Commissioner, you spoke of a considerable increase; well, as compared to last year, the increase is 169 million ECU of which 140 million are for Community coal. .

However, in reality more is actually set aside for coal because there are subsidies for coal stocks - a token entry has been made, which means provision for additional funds. Now, we may present Community coal policy however we like, but once more we are dealing here with an industrial sector which we are trying to protect instead of thinking about redeveloping it in other directions. We know that Community co prices - be they German or British - are way above world coal prices. we also know that if coal represented a large slice of our energy resources, the Communities energy bill would be infinitely heavier.

So, industrial policy, energy policy, regional policy and, I would add, foreign policy towards, the developing countries all show that the Commission fails to realize that, if these is any prospect for economic recovery, this must be one which unites industrial efforts and financial ones in the interests not just of restoring the status quo of the 50s and 60s, but of developing the most disadvantaged regions in the Community and in the rest of the world. If we scrutinize the fund for the associated Third World countries, what do we find? An increase of 121 million EUC in food aid - that means getting rid of our stocks, our wheat and sugar mountains, our butteroil lakes - and only 63 million EUC for development aid. In this sector too we have formulated a policy which, far from helping the developing countries and, thereby, ourselves to grow, only serves to protect our structures, however unhealthy they may be.

As for the EAGGF, I shall content myself with adding that the problem is not that of spending less on agriculture, but better. Indeed, we note that, after all that has been said by the Commission, by the President and by Commissioner Gundelach, both in absolute terms and in proportional terms, the Guarantee Section's expenditure has risen. In absolute terms from 423 million EUC to 394, and proportionally it has fallen from 4.6 5 % to 3.94 %. Is this the way for the Commission to show that it understands the Community's problems?

The items of the budget which I have cited reflect the image of a Commission which has given up all thoughts of a general economic and therefore budgetary policy, a constructive one that does not just plug the holes as they appear. The problems besetting us deserve a little more respect than that!

The last point I would like to make is that I, like other colleagues, support the idea of entering an item in the budget devoted to movements of capital. With this entry, then, what implicit in the 1978 budget becomes explicit in that for 1979; in other words, it is now clear that these form part of the Community budget. But how can one imagine that the Council unanimously decided on the proposal of the Commission, when it is as clear as day that, obligatory expenditure apart, everything that comes under the budget is decided on according to a procedure which is different from that which you have proposed? In what way,

I ask myself, can the Commission be the custodian of the Treaty of Rome as far as the budget is concerned?

These are my preliminary remarks. I would like these criticism and remarks which I am not alone in making, to be taken into account, not so much by you, who have already done your job, but the Council when it comes to scrutinizing the preliminary draft budget.