1980 BUDGET PROCEDURE: COUNCIL'S DRAFT

by Altiero Spinelli

SUMMARY: The European Parliament considers the essential aspects of the draft approved by the Council at the first reading. This debate makes it more likely that the budget will be rejected,

as already threatened in the July debate. "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 27 September 1979)

Mr President, I rise on behalf of the Italian members of the Communist and Allies Group. As, however, we were all elected in the European elections and we are discussing the budget of the Community, which is the European budget, I shall try to avoid viewing things from a purely Italian standpoint and look at

them from the standpoint of the Community as a whole.

On 20 July last, the Council was present during the debate we had on the preliminary draft budget submitted by the Commission and could see for itself the nature and magnitude of the dissatisfaction with that budget shown in almost every part of the House. On 11 September, the Council received a delegation from Parliament. The meeting was held for an exchange of views but, as its President reminded us today, Council has its own way of interpreting an I I exchange of views" and after asking for information about things on which it was clearly already well informed, it stuck to its point of view. However, it heard the opinions which, led by our President, Mrs Veil, the Parliamentary delegation expressed in precise and clear terms. Finally, on 27 September, the Council presented us with a draft. 'Presented' is pitching it rather high because it only talked to us about to us about it. The draft has not yet reached us because man is capable of telling us the exact point of time and place at which a missile lands

on the moon but is not capable of dealing with the problem of a little local strike in order to provide Parliament with the documents it needs for its work.

However, we managed somehow to get hold of the document and to read it, albeit in some haste. We had expected it to show that the Council had somehow been able to take account of at least some of the opinions of Parliament but we found that the draft completely ignores the very clear opinion of Parliament on the issues involved. This cannot fail to cause disquiet and raises a number of questions. The Council does not yet seem to realize that it is no longer proprietor of the budget and that, together with the Parliament, it forms part of the budgetary authority and, therefore, must take Parliament's opinions into account. Perhaps there is a certain contempt for this Parliament; a Council document which was not intended for publication contains the statement that, if Parliament gets too obstreperous, all it needs is some Tascbengeld, some argent de pocbe. Instead of assuming responsibility for determining the needs of the Community, the Council seems to have behaved like a carpet-seller who starts with a high

price in order to bargain for something halfway. It looks suspiciously like a deliberate intention to stop the Community from developing. It looks as though there is an inability to appreciate how much, these days, we need a strong and active Community to help our countries get over the crisis and the grave developments which threaten us. Perhaps the draft budget results from a combination of these things. If so, it shows how important it is for this House to speak clearly and forcefully from now until the final decision of adoption or rejection of the budget,

For these reasons, instead of turning to the Council or the Commission, both of whom have produced budgets which are unsatisfactory, I should like to ask for the attention of all members of the House, whatever their political allegiance, who are committed to the development of a Community capable of creating a better society and, in consequence, in need of more numerous and effective instruments of policy. I should like them to join me in considering what major changes need to be made in the draft budget and what changes are of such importance that, if they are not agreed, we shall not adopt the budget.

We must not lose sight of the fact that our Community faces a grave and growing crisis. A new recession is in the offing, there is a fresh wave of inflation; energy costs are rising; within the Community, there is a growing disparity between North and South; and our countries are inclined to take refuge in protectionism and produce outbursts of nationalism which could destroy what little Europe has achieved. In a situation like this, the Community, with a responsibility to itself and to the world, represents the most effective instrument in existence to carry out a balanced and orderly plan for recovery. It must be made clear from the start, however, that the Community must be provided with resources far greater than those available to it now.

In its comments, the Council states that it must restrain inflationary tendencies. Commissioner Tugendhat pointed out that this concern looks somewhat one-sided when the Council recklessly allows the largest section, of the budget to be increased and freed from control while cutting down the smallest. Inflationary pressure does not come from the Community budget but from the budgets of the Member States. When we call for a increase in the Community budget, it is to effect economies and to do things at present done badly and uneconomic ally with less effort and at a lower cost. Another cause for concern is that we have to increase the burden of taxation but I shall not dwell on that because, as Mr Notenboom reminded us, this involves a transfer of resources from the national budgets to the Community budget and is not an increase in tax. What, in short, we have to do is insert a line in the budget so that, in 1980, steps can be taken to raise the VAT ceiling to at least 1. 5 % and enable expenditure to be incr

eased if circumstances so require. This can be very easily done because no new legislation would be needed, only a higher figure. There must be clear recognition of the power to issue loans and to enter them in the budget and we must in conjunction with Parliament and not merely with officials and diplomats, consider making radical reforms in the Community's fiscal system and look at the way in which expenditure is shared between the Community and the States. We have to write this in as a binding remark in the Revenue section because we cannot allow things to remain as they are. The Council, however, has cut back as much as it can in order to remain, with plenty to spare, within the figure of 1 % and to have this margin in hand to provide for the compulsory financing of a crazy agricultural prices policy. Those funds are needed to co-ordinate the development of the poorer countries and of the backward regions with that of the regions which are better off. The Council proposes the exact opposite and has reduc

ed this expenditure.

We shall need a vigorous energy policy but the Council wants to cut it back. We shall need an industrial and social policy for the development of technologically advanced industry and for re-structurization and re-development; generally speaking, the Council proposes a reduction. What the Community needs is a drastic reduction in agricultural expenditure by cutting price subsidies and re-organizing the structures. But the Council is cutting down on the structural re-organization section and is once again about to raise expenditure for the EAGGF Guarantee Section. The draft budget represents an overall increase of 8 % compared with last year. Under the rectifying letter, it will be even more.

Of this, more than 70% is to maitain farm prices. In 1979, inflation averaged 7%, which means that the total budget shows a slight increase, whereas the non-compulsory section goes up by 6% in other words, this section is reduced despite the fact that the situation we are in requires it to be increased. Faced with a budget like this, I believe Parliament must make up its mind whether to accept the argent de pocke, the Taschengeld and make improvements here and there with nothing more in mind than getting back to the preliminary draft budget, despite the criticisms we made of it, or to go the other way and say 'No' to a budget which does not, in specific and unambiguous terms, incorpore the radical

changes I have described.

As far as we are concerned, we shall make proposals along the lines indicated and if the budget does not meet our demands we shall not vote for its adoption. Our Socialist colleagues have said that they will do the same. I should like all other members of the House to consider this point: we are not voting now, as we have in the last two sessions, on the comparatively unimportant basis of whether we are on the right or on the left but on the basis of a single principle befitting the dignity of this House, that is, deciding which are in the majority: those who want the Community to stand still or those who want it to achieve the growth in scope and strenght which is so vital for us as a Parliament and for the nations we represent. We on our side have decided what we are going to do and we hope and trust Parliament will react in the same way.