1978 BUDGET PROCEDURE: COUNCIL'S DRAFT

by Altiero Spinelli

SUMMARY: The European Parliament considers the draft budget approved by the Council, before voting on the first-reading amendments (23 October 1978).

This budget procedure commences whilst the Community Institutions are reacting to the decisions adopted by the European Council at Bremen concerning the creation of the European Monetary System (EMS) and the adoption of I parallel measures" designed to deal, by means of appropriate structural policies, with the consequences of the economic and monetary commitments of a number of countries and regions experiencing difficulties.

This marks the start of a conflict between the European Parliament (involving its view of the budget) and the Council (involving its accounting point of view of the budget and of Community policies) leading to rejection in December 1979 of the 1980 budget and continuing during the following years with respect to the heated question of the British contribution to the Community budget. In "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 12 September 1978)

Mr President, first of all I must say I regret the delay in our receiving these documents. The Council draft, the document on which hinges the most ' important parliamentary debate, reached us in fact only yesterday forcing us to devote part of the night to its perusal and in any case to improvise our proposals. I do not know whether the Council, which is a slow mover, or the offices of Parliament are responsible for this delay, but I would like care to be taken in future to see that at least those who have to examine the document in detail, the members of the Committee on Budgets, may have it at least a little time in advance.

I must say immediately that the present situation is not the same as it was last year. Last year, in spite of all the criticisms we made, we were able to take the Commission's draft as a starting point for comparison with the Council's decisions. In essence, Parliament ranged itself in defence of the Commission's proposal and tried to reestablish, wherever possible, everything that the Council had deleted. This year, however, our opinion is not in favour of either document, particularly the Commission's draft, to which the changes made by the Council may be regarded as marginal damage. And it is precisely for this reason - an unusual procedure in this Parliament - that we begin our discussion on the budget with Mr Bangemann's motion for a resolution. This resolution has our approval - although we would have liked the terminology to be more clearcut - and it expresses negative views on both the proposals.

Mr Tugendhat - who is not listening just now - has told us that the draft was prepared before Bremen, that the Commission is therefore now in an embarassing situation and that all that it has been able to propose, since the Council made its cuts, is reversion to the Commission's proposals. I do not agree. If the Commission admits to having prepared a draft in a different political situation from that which took shape there after, it should be in a position, as it is when it recognizes that sun and rain may produce different crops from what was expected, to prepare corrective papers over the coming weeks taking into account the tasks that the Community will have to take upon itself in 1979. Only in this way will it be able to provide Parliament with all those instruments, requested by Mr Bangemann, enabling us to have a budget effectively matching the tasks we shall have to shoulder. I say that in this situation the Commission has a responsibility not to defend a draft which it recognizes itself as arising ou

t of different political circumstances than those prevailing at the moment.

Mr Lahnstein, President of the Council, began his address by talking about the increasingly productive meetings with Parliarnent. Well, having taken part in all these meetings, I wonder how it is possible to describe them as productive. Certainly they were most proper, we smiled at each other, lunched together and so on, but the Council never gave the slightest sign of moving one step closer to Parliament's standpoint, whether about the Ortoli facility, or about regional or any other problems. Its main concession was to say: this year, accept our point of view and for the rest, perhaps we can have another talk next year. To me, therefore, it does not seem quite right to talk about productive relations.

Turning now more specifically to the budget, I would like to reply to President Lahnstein's statement when he said that the reasons for the cuts were, for one thing, the fact that the Council wished purely to enter decisions that has already been taken or were about to be taken and, for another, that he wanted precise figures. As regards the thorny problem of the token entries, I would like to point out that the Commission submitted projects in certain sectors some years ago - some of them a full four years back like, for instance, those regarding aid in the aviation sector - and that therefore the fact that the Council makes a token entry purely means that it does not want to take any decision on the matter. What is more, the -token entry for the Ortoli facility is eloquent testimony to the Council's real intentions. On this point, as a Parliament, we ought perhaps to speak more clearly and not simply confine ourselves to expressing opinions. We ought to demand a budget in which the things that are entered

are those that need to be done during the course of the year. This means that, after their approval, the Commission must present the appropriate proposals with maximum speed and that the Council must take decisions -otherwise, there is no real point in discussing the budget.

This brings me to a second comment. The Council has deleted the whole of the explanatory annex, to be found in the preliminary draft, regarding loans, because - as President Lahnstein has explained to us - these are rather difficult institutional, political and economic problems which cannot yet be presented in. the budget. On this point - and it seems to me that Mr Bangemann fell to some extent into the trap - I would like there to be no misunderstanding. In the Commission's draft, the entry in the budget is there and unquestionable. That means, gentlemen of the Council, that you have to bear in mind that, on this subject, the decisions are decisions by the budget authority and not Council decisions. As regards the loans for industrial development, in view of the fact that the Commission's proposal has already been made and that concertation with Parliament is at an advanced stage - with means that it will have to be discussed within two month's time - we are forced to note the fact that you are not yet in

a position to enter the necessary billion and that you confine yourselves to a token entry. And if we think about all the other token entries, we cannot fail to get worried.

The Community budget should reflect the main objectives of the Community and, as President Lahnstein has said, a larger increase is necessary; but it needs to be an increase without inflation and without monetary chaos - which means that we need a package of monetary measures and action aimed, certainly, at greater austerity in consumption but also at greater activity in the investment and development sector. I well know that, in part, this task has to be done by the Member States and I recognize that, today, the individual States are in the front rank of responsibility for halting inflation and containing public expenditure. Nevertheless, there is also a Community responsibility that relates to two fundamental objectives. The first is that attempts at recovery should relate to convergent, not divergent, economics. The second is that the really large-scale development policies, today, cannot be decided at national level; they have to be taken in a broader context, and the Community context is certainly bette

r suited to their implementation. We believe that policies to remove or reduce obstacles to trade are not national but Community policies, and we go furtchr: the serious plans of an economy seeking recovery must not be confined to recovery among the advanced countries but mut include all developing countries. We cannot go on believing in the remedy of more consumption to give more work to our industries. This idea, which is just beginning to gain ground, implies a far more decisive and coherent policy than that which has followed up to now in favour of the undeveloped regions, whether inside the Community or elsewhere. Regional policy and aid policy for the developing countries must no longer be conceived as alms handed out by the rich to the poor, but as a plan to save poor and rich alike. Otherwise the rich are heading for ruin. Well, of all this there is not the slightest trace in this budget. I wonder how it is possible to imagine monetary union, knowing that there are countries which will be unable to m

ake that step and knowing that the necessary policies for aid, regional development, social development, convergence, restructuring, etc., are lacking. For this reason - the fact that the budget does not reflect all these aspects - I consider it to be inacceptable.

In conclusion, I would just like to stress that it is best for the Commission and the Council to have no misunderstanding about Parliament's attitude. Let us not forget that, as things are at the moment, the budget could well be thrown out by Parliament. Substantial changes therefore need to be made, not just to makc it less austere but to make it austere in the right scnse. We have a great opportunity, all the greater in that this is the budget we shall be handing down to the elected Parliament, and I am convinced that it is better to tell the elected Parliament that the last non-elected Parliament said 'No' to this bad budget and refused to do what the Germans describe as einen faulen Kompromiss eingehen. We are convinced that the Council and the Commission will realize the gravity of the situation and use this internal budget crisis as an opportunity to achieve further qualitative progress for the Community.