SUPPLEMENTARY AND AMENDING BUDGET FOR 1979

by Altiero Spinelli

SUMMARY: The European Parliament considers the draft amending and supplementary budget pre-sented by the Commission for 1979 and sent (with amendments) by the Council to the Parliament.

The content of this budget rcvives the controversy between the Council (supported to a large extent by the Commission) and the Parliament as to the action to be taken by the Community, from the financial point of view, in view of the prospects of an economic and monetary union being created After the Council's decision to bring the European Monetary System into operation. "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 24 April 1979)

Mr President, the submission of this amending and supplementary budget accords with the views and wishes expressed by Parliament when, in voting the budget a few months ago, it made a substantial increase in the Regional Fund. It accords with the previous position because both the vote by Parliament and the present Council proposal take account of the fact that one of the major problems facing a Community that wishes to construct its own economic and monetary union is that of taking, in parallel with monetary measures, measures to transfer resources to the regions or countries which are experiencing difficulties and are poorer than others. Indeed one of the fundamental aims of our Community enshrined in the Treaty is the harmonious development of the Community as a whole and of all its Member States. For this reason we shall vote in favour of this supplementary budget.

I do not wish, however, to pay too many compliments to the Commission because my assessment of the position adopted by it throughout this procedure differs somewhat from that expressed by Commissioner Tugendhat. The Commission showed a lack of awareness of the imperative need to increase the Regional Fund when it proposed to maintain it at the level of the previous year without taking any account of the fact that the process of setting up the European Monetary System had by then been set in motion. This demonstrates the lack of any strong interest in the Commission in the development of regional policy:it was Parliament which brought the Commission back into line by reminding it of the importance of this commitment; when it presented the initial draft budget the Commission, in order to make life easier for itself, had even felt it possible to reduce certain entries against the Regional Fund.

Had the situation been different today, in other words if Parliament had not found itself obliged to complete the budgetary procedure before the election date, my group would have tabled an amendment restoring the figure proposed previously by Parliament. However, in the present situation we shall not do so because we are aware that, after all, the reduction proposed in the payment appropriations is only of 54 million EUA; allowing for the increase in interest subsidies for the EMS of 200 million EUA - in payment rather than commitment appropriations for the current year - we have in fact a net increase of 146 million EUA. The problem of a more harmonious development policy for the Community will be one of the major themes for the Parliament, Commission and Council in years to come and that problem cannot be resolved by a matter of 50 million EUA more or less; we are therefore willing to close the discussion on this figure and approve the budget as it stands.

I want now to make a few observations on some other points which are more of a procedural nature and relate to the subject of compulsory expenditure. All the speakers in this debate have rightly maintained that the EMS interest rebates must be treated as non-compulsory expenditure. I had hoped, however, that a previous speaker would have drawn attention to the central argument and thus spared me the need to do so. It seems to me that there is one central argument which goes to prove that this expenditure is non-compulsory. It is not within our discretion to decide whether or not expenditure is compulsory: we are bound by the sole provision in the Treaty on this matter which stipulates that compulsory expenditure must be derived from the text of the Treaties or of secondary legislation. But the Treaties make no provision for this expenditure; there is no other legal act providing for it, so much so that when the Commission proposed to enter 200 million EUA in the budget as compulsory expenditure, the Council,

recognizing that there was no statutory provision for this expenditure, made a token entry and placed the 200 million in reserve under Chapter 100. Therefore, this expenditure derives neither from a budgetary obligation nor from a regulation. I hope that the Commission will take account of this fact when it comes to present the draft regulation to this expenditure and that, using its right to amend the text until the last minute, it will delete the unfortunate sentence concerning the compulsory nature of this expenditure.

For the rest I think that we can adopt a favourable attitude to this document, especially as the Council declares that the preliminary draft amending and supplementary budget has been considered by it under the procedure laid down for budgets and forwarded to us under the same procedure. The Council itself thus recognizes that the text can only be approved by the budgetary procedure since there is no other Community act governing the consideration of a document of this kind. I wonder whether the Council is not following the example of that mediaeval bishop who being obliged to eat a goose on Friday declared "I baptize you fish" and ate the goose which he called a fish.

In an effort to smooth over the difficulties, Commissioner Tugendhat voiced the thought that these conflicts between Community institutions are characteristic of our Community but that there are some countries, including his own, which are not familiar with such conflicts. Perhaps I misunderstood what he was saying, because the Parliament in which he sat until not so long ago was born out of a conflict, and lives on conflicts with other institutions and with the king: it caused one king to be beheaded and in this century it obliged another king to abdicate and intimated to the House of Lords that it must mend its ways or be abolished. This goes to show that conflict between institutions is a normal feature of evolving bodies and is therefore perfectly normal in the Community. The democratic element in this Community is still too weak, but it has been strengthened by the action taken up to now by this Parliament and will take a great leap forwards with the elections, after which this Assembly will fight to in

crease its powers in relation to the other institutions. That merely follows the logic of events in every country, including Great Britain. In a sense we have borrowed the struggle between institutions from the English.

My last remark concerns the maximum rate. I want to dwell on this problem because it seems to me to be of great importance. The Treaties contain a somewhat absurd provision that the budget may be increased each year by a maximum rate and no more in the case of non-compulsory expenditure. Experience proves this provision to be meaningless because it is quite impossible to provide in a Treaty for the rate at which the expenditure resulting from political necessities must increase. In practice the Commission has always given a ritual definition of the maximum rate which was then completely ignored; at the end of the procedure a different maximum rate was established by a joint decision of the Parliament and Council. We have always maintained that the relevant decisions should be held over until the end of the procedure - until the recent conflicts arose. I think that it is not a negative approach to refer to this problem again now because a lesson can be drawn even from misfortune. I consider that the Council s

tarted out on the wrong foot when it said: 'We establish at the outset the amount by which the rate must increase and on that basis we shall continue the procedure; we shall not retract our decision and Parliament win have to accept it'. However, the debate which took place within the Council itself proved that ' things must be viewed differently and the Council has adopted internal rules of procedure obliging it to arrive, having regard to both revenue and expenditure, at a certain formula which will then be discussed with Parliament if the views of the latter differ from its own.

That is how I think budgets should be drawn up. Up to now in drafting the budget we have given attention solely to expenditure; we have arrived at a total and then said that revenue must be raised accordingly. If we want the budget to be a stronger instrument, we must also take account of the economic situation and of the tax burden borne by our citizens; we must then proceed to make the necessary distributions and adjustments otherwise there is bound to be an increase in the burden of taxation. This approach is essential if we are one day to say: that will broadly be speaking be the amount available for next year and that is how it will be distributed.

If that policy is to be followed, the budget must not be presented merely as a statement of expenditure; it must on the contrary be based on a genuine policy of revenue. The principal responsibility for this rests with the Commission. The two branches of the budgetary authority - the Council and Parliament - must review the Commission's proposals and agree how to deal with them. By allowing the Commission to present its budgets as it has done up to now after which the Council intervenes on its own behalf, we are condoning a distortion of the process of political opinion-forming on the budget. In the absence of an overall view from the outset, each of the nine representatives in the Council will inevitably reflect a national viewpoint and the European aspect will be lacking.

In conclusion, I am convinced that this budget can be a turning point in the method of presentation of the budget; I hope that in future the Commission will put forward a draft budget which reflects not only a view of the Community's expenditure policy but also and above all a view of revenue policy expressed in terms of real figures.

This is the only way in which we can discuss the European budget seriously. The conflict of views which we have seen in this chamber will have made a positive contribution.