1980 BUDGET PROCEDURE: FIRST READING IN THE EUROPEAN PARLIAMENT

by Altiero Spinelli

SUMMARY: The European Parliament approves at the first reading the amendments to the budget prepared by the Commission and adopted by the Council in September. Spinelli refers to the basic demands made by the Parliament for the budget to be made acceptable and, at the some time, the circumstances which will prompt the Parliament to reject the draft at the final stage of the procedure. "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 5 November 1979)

Mr President, I speak on behalf of the Italian Communists and Allies. I shall not remind you, Mr President, or the members of my Group, of the severe and justified criticisms which we have made of the Commission's and, subsequently, the Council's draft budget, but I should like you all to bear in mind that we have not abandoned these criticisms, that they are still the basis of our attitude and that they will determine our behaviour. During the discussions within the committee on budgets we asked that, if possible, fundamental changes should be made, bearing in mind the responsibilities that the Parliament and the Community must face. The Parliament, using all its authority, must try to get the Council and the Commission to face up to their responsibilities, since the draft documents which these two institutions have submitted do not appear to be inspired by any such realization.

In our opinion, the attitude adopted by Mr Dankert is unacceptable; to my particular astonishment, he told us that there was no likelihood of an increase in the Community's own resources over the next few years, because the German Government was against it, the French Government was against it and I don't know how many other governments were against it, and that consequently all that could be done would be to shift expenditure from one section of the budget to the other, in particular, to try to remove some appropriate ns from agricultural expenditure and allocate them to other uses. It seems to us that this attitude is not appropriate to the problems that face us.

We have made a contribution, and I think it was not an insignificant one, to the work of the committee on budgets, in order to try to make a really basic change in the whole appearance of the budget, in order to prevent the committee on budgets suggesting to Parliament that it should be happy with a little saupoudrage - as they say in French - with a little 'pocket money' - as the Council once said in a semi-confidential document - in other words, with a few concessions made here and there on this or that item. I must say that we did manage partly to obtain what we wanted and we partly did not manage, but I should like to set the case out again in general terms to this Parliament, in order at least to try to convince the Members of this House that they must accept the concept of a budget which is not a mere modification of the draft budget which the Council has submitted for our approval.

First of all, I should like to refer briefly to two points. One of them concerns compulsory expenditure and the budget heading which deals with the EMS interest subsidies; the President-in-Office of the Council has told us, for the third time and obviously without paying any attention to the answers he received, that whether a particular item of expenditure is compulsory or not compulsory cannot be decided by Parliament or any other institution on its own, and that the expenditure on the EMS interest subsidies must be considered compulsory because it concerns obligations which must be honoured. Well, I should like to ask you, Mr President-in-Office, who gives you the right to think that Parliament is less serious in its approach than the Council, that the Parliament is ignorant of the fact that these obligations must be honoured? This is not a valid argument. The fact is that compulsory expenditure - and I repeat what I have already told you in committee, Mr President-in-Office - is not expenditure for which

a definition, or even a mere decision, on the part of the Commission or the Council can be enough. Compulsory expenditure - and this is explicitly stated in the Treaty - is expenditure which derives from the Treaty: do the EMS interest subsidies derive from the Treaty? The answer is no. Compulsory expenditure is also expenditure deriving from acts that themselves derive from the Treaties: do these interest subsidies derive from such acts? The answer is no. Therefore they are not compulsory expenditure, not have you the power to consider them as such. To quote the remark which the miller made to Frederick the Great. 'There is a judge in Berlin', and I repeat that in this Community there is also a judge, should your decide arbitrarily that this expenditure is compulsory.

As regards the maximum rate, I have nothing to add to what Mr Tugendhat has already said. It is true that the maximum rate is one of our basic tools; however, Mr President-in-Office, you should consider that there was a first Treaty in which it was said that 'in exceptional cases this rate may be exceeded...' and a second Treaty in which the words 'in exceptional cases' have been removed. This change was made for a purpose. it means, as Mr Tugendhat said, that, if need be, the rate must be exceeded.

I should like now to deal with the fundamental problems on which we dwelt.

As regards revenue, we asked - in a strong, politically motivated comment.that under the revenue heading it should be stated that we ask the Commission to submit proposals so that, by the end of this year, the m@um rate of VAT may be increased from 1 to 1- 5 % and a new Community financial regulation may be prepared, not on the question of increasing taxes, but on the distribution of taxes between the member countries and the Community. This law will have to be discussed with Parliament and not with the officials representing the finance ministries of the various countries. We have noted with pleasure _ and we will naturally withdraw our amendment in favour of the one tabled by the committee on budgets - that this proposal was accepted by Mr Tugendhat and by Mr Notenboom.

The truth is that this Community needs more money to finance more policies and to finance more complex policies. Nevertheless, instead of making people pay more, we would prefer that the existing funds be better spent, in the form of common action programmes rather than uncoordinated operations.

With regard to the problem of agriculture, we asked that some of the funds from the EAGGF guarantees for milk should be reallocated and used for structural reforms in agriculture. On this point my colleague Mrs Barbarella will be speaking on behalf of the Group, so I shall not spend any more time on that, but in general what we asked for has been accepted, though perhaps not one hundred per cent. Next, I should like to point something out to Mr Dankert and Mr Taylor, so as to avoid any misunderstanding. The problem is not that too much is spent on agriculture; the problem is that what is spent is badly spent. We think that if more is spent on the agricultural sector than on other sectors and what the Commissioners and the Members of this House are continually saying is true - we must nevertheless bear in mind that we have an integrated agricultural system and that the Member States do not themselves spend any more on the market organization policy, inasmuch as this policy is the sole responsibility of the Co

mmunity. The problem is not that we are spending too much, it is that we are spending money wrongly, because we are spending is such a way that we create surpluses involving pointless and useless expenditure which is on the increase. We must make better use of these funds, and I should like to draw everyone's attention, and in particular the attention of those Members of this House who are afraid that if we tamper in any way with this expenditure we are destroying the agricultural policy, to the fact that the Committee on Budgets does not suggest taking money away from the agricultural policy in order to use it, for example, for nuclear policy, industrial policy or energy policy. Our aim is to keep this money inside the agricultural policy, but, instead of keeping it there in order to support prices artificially, we want to make structural reform so as to help those people whom our mistaken policies have sent off in the wrong direction. This suggestion has been accepted in full, and we welcome this.

As regards structural policies, the Regional Policy Committee's request which received our enthusiastic support, has been accepted. This point will also be dealt with by someone else, so I shall not spend any more time on it. As regards structural policies as a whole, we have asked for an overall reserve to be set up for those sectors in which the need for a stronger Community policy is most obvious. We were of the opinion that the Community should have at its disposal a certain minimum sum, and in our opinion this should be in the region of 1 000 million units of account, to be spent over four years for each of the sectors mentioned above. In this way we were reiterating the concept that Community policy cannot be conducted on a year-to-year basis, but that things should be planned for a given period, and for this reason we suggested that an overall sum be set aside and that during the first year only a modest proportion of this sum should be spent.

On this point the Committee on Budgets did not agree with us and preferred to adopt a different policy, that is to say, it accepted an entire series of proposals which we only approved of in general terms, because, though they were constructive, they go only a short way towards what is necessary and do not answer the need for a strong overall policy. Because of this we are going to re-submit this proposal and we shall support it again, even if amended; we would ask all of you to think carefully before you say 'no', to give the matter some reflection before you turn down our proposal, so that no one may think that this first elected Parliament, at a moment of energy crisis, social crisis and industrial crisis, is capable only of looking at things in a piecemeal fashion and cannot make a clear statement, saying, 'Members of the Commission, Members of the Council of Ministers, draw up a programme for the coming four years with this figure; provided you follow a consistent overall policy you can count on the sup

port of Parliament'. This is the way in which we can demonstrate our desire to follow a certain line of policy, and if we abandon it that means that we are letting slip one of the most important opportunities that is likely to turn up for our Parliament for some time.

I should therefore like to ask you all, ladies and gentlemen, to think carefully about the votes to be taken in the coming days and how we may best continue the discussion. We should not let ourselves be taken in by those who say that we must save money, because this will only entail additional expenditure for the Member States and thus make policies which are in fact necessary, impossible. At every turning we come up against the need for common policies and every time we say: 'Unfortunately, we are not ready yet'. This is the appropriate moment to say: 'Parliament maintains we can proceed along these lines' The Committee on Budgets did not accept this argument, and so we are submitting it to you again in the hope that we shall have a favourable reply, or at least a more favourable one than we have had on previous occasions. Are we asking too much? I do not think so. I remember what the PPE said only a few weeks ago - that it would vote against any budget which, for lack of adequate appropriations, was not a

n effective political instrument and did not contribute to overcoming the crisis of the Community. Well, I would like our friends in the PPE to think about this. After Mr O'Leary's speech, even the Socialists came and told us that they were not satisfied with trifles - what they wanted was something substantial.

The Socialists have persuaded the Committee on Social Affairs to say that, if the discussions were to remain at the level of trifling details, they would vote against. The rapporteur for the Committee on Budgets will confirm this. In asking for this, we are not asking for too much. Will we perhaps reach the limit of one per cent of VAT? Because, if we were to exceed it, we could be told that the budget was not acceptable. We have not exceeded the limits, but we do not want people to say that the reserve should be used only for crazy expenditure on the agricultural policy, it should be used for serious policies, and consequently we ought to start looking around for new resources. The formula suggested by the Committee on Budgets, and to which Mr Tugendhat has said he will give favourable consideration, consists of a rapid emergency measure which will act as a safety valve for the coming years; the suggestion is to keep the law relating to the VAT percentage exactly as it is, and simply to change the figure fr

om 1 to 1. 5 %. This is something which, if the determination is there, can be done in six months rather than three years.

It is by tackling problem of this sort that we shall see a developing Community emerge; the alternative will be a Community already resigned to its lot, continuing somehow to eke out its existence.

I should like to say to the members of the Christian Democrat and Socialist Groups that now is the moment to show that we do in fact desire a Community with an awareness of its own responsibilities and with a sense of responsibility with regard to the budget. There is no lack of responsibility in our attitude. The lack of responsability is to be found in the Council's draft, because faced with a situation that calls for a strong Community, this document wishes to keep the Community weak. For these reasons, Mr President, even if we note with pleasure that some things have been put right in this budget, we maintain that the essential point has not been dealt with, and that strong structural policies are lacking, as are also strong development policies. I forgot one other thing on which I had a negative reaction from the Committee on Budgets. We were voting on the question of substantial aid cooperation with the developing countries, but our committee rejected this proposal whilst we were debating the question

of world hunger. This was the only way to deal seriously with the question for world hunger, instead of passing resolutions. Apart from the fact that we have a duty towards those in the world who suffer hunger, it is in our own interest to help them, because an upturn in our economies can only come, this time, through aiming at developing the world and not simply at enriching ourselves. If the things we suggest in those four amendments, which could really alter the appearance of the budget, are not accepted, we cannot vote in favour of this budget and we shall recommend that the Parliament should throw it out.