BUDGET PROCEDURE FOR 1982: COMMISSION PRELIMINARY DRAFT

by Altiero Spinelli

SUMMARY: The European Parliament examines the 1982 draft budget submitted by the Commission and heard the anal ysis given by Spinelli in his capacity as rapporteur-general for the Committee on Budgets. "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 9 July 1981)

Mr President, the Commission is bringing before Parliament a preliminary draft budget which is wholly and solely based, as far as income is concerned, on the present Treaties, which set the maximum level of Community own resources.

For expenditure, it is based on the regulations, directives and decisions which are at present in force.

The outcome of this is a budget which is extremely rigid in almost all its aspects. In fact, the one percent VAT ceiling has more or less already been reached, as the Commission itself has been foreseeing for some years. The fact that there remains a slice of Community VAT which is not used, amounting to approximately 500 million ECUs is little more than clever accountancy. The Commission knows full well that it has to take care to set aside approximately 500 million ECUs for the future, to cover the probable fluctuation in expenditure of the Guarantee Section of the EAGGF, and a few hundred million in order to renew the Mediterranean protocols. In other words, the 500 million surplus ought much more rightly to have been entered under Chapter 100, thereby being available should the need arise to use it for the Guarantee Section of the EAGGF or renewing the Mediterranean protocols.

However, any way one looks at it, the VAT ceiling has in actual fact been reached. This means that, as things stand, total payment appropriates canons hardly go beyond the approximately 22 000 million EUA contained in the Commission's draft preliminary budget. Whatever one wishes to add to one heading will have to be taken from another. But, of this total sum, 13.6 thousand million are inevitably swallowed up by the Guarantee Section of the EAGGF. The supplementary measures in favour of the United Kingdom, for 1982, which have already been decided upon and committed amount to 1.7 thousand million and expenditure on personnel and operating costs is 700 million. This means that there remain only 6 000 million EUA to be spent on all the other policies be they common policies, structural or cooperation policies, all of which the Community desperately needs.

It is perfectly natural for the Commission, in the present circumstances, to propose that priority, involving not insignificant increases, should be given to the social and regional policies. However, the scale of these two policies - as indeed of all the other policies covered by the funds thus left over - will remain irretrievably lower than that on which they ought to have in order to exert exercise a significant influence on the economy of the Community and thus truly help towards achieving convergence and stimulating the development of the

Community.

Similarly, commitment appropriations were also approached from this 'low profile' angle, that is by looking at the ceiling of own resources and how much had to be set aside for compulsory expenditure, rather than considering the needs of the Community.

It is almost as if, from one year to the next, from one transitional budget to another, and making alterations which do not change anything in the overall shape of successive budgets, the Community has now reached its 'cruising speed' and its normal scale of finances, and we therefore have no more to do than to carry out an administrative routine and make readjustments between the various headings. The fact is, however, that the Commission is politically obliged not to slip into an administrative routine. Its role is under pressure both from the Council and from Parliament to make major proposals for innovation whilst keeping its eye on their implications for the budget.

More than a year ago the Council asked the Commission to make some proposals by the end of June in order - and I quote verbatim - 'to carry out in 1982 structural changes in the budget in order to balance the various policies and to prevent the recurrence of unacceptable situations for any of the Member States'.

Since March, Parliament, whether in its budget guidelines or in the various resolutions which preceded or followed them, has made a whole series of demands, on agricultural spending - the Plumb report, on developing structural policies - the Ruffolo, Pfennig and Giavazzi reports, on a fair, correct and Community solution to the problem of unacceptable situations - the Lange resolution and the Arndt chapter in the motion for a resolution on own resources, or made a firm commitment to help the fight against hunger and undevelopment in the world - the Ferrero report, and lastly, as a logical consequence of all the above Parliament called on the Commission to put forward proposals for removing the ceiling on VAT - this was the resolution on own resources.

The Commission's reply to all these demands cannot but leave us completely flabbergasted. By and large, the Commission has ignored all Parliament's demands. It has replied to the Council mandate, after more than a year of preparation, without making any formal proposal on what should be done in 1982. It has confined itself to writing a memorandum, even thought it is aware from long and bitter experience that no Council is capable of discussing a memorandum and that, therefore, its report is destined to get bogged down in the offices of the COREPER.

The Commission has presented us with a draft preliminary budget in which it openely admits that it has not incorporated the conclusions of its own report on the mandate (and we can quite understand now why it did not include them: because its report does not contain any proposals for decisions, but only discussion topics and therefore does not have any implications for the budget).

I feel that Parliament cannot, and must not, any longer accept this type of attitude. During the two years up to today, that is since Parliament rejected the budget because it considered it inadequate for the needs of the Community, the Commission has wasted so much time that it is now obvious that the payment appropriations for 1982 can only be defined in the way in which they are in the draft preliminary budget. However, in the second half of 1981 and the first half of 1982, the Comm'ssion can rouse itself from its political torpor, and put forward the triptych of precise and formal draft decisions - and not just suggestions - which have been bandied so much.

Firstly, it must make changes in agricultural regulations which enable it to control EAGGF expenditure. In this way, it would become perfectly clear that controlling and more rationally distributing of agricultural expenditure cannot in practice mean any appreciable reduction in the amount of money allotted to the CAP, and that a rebalancing of the budget, cannot, therefore, be achieved by making such impossible reductions, but should merely have as its basis the matrise, the curbing, of agricultural spending.

The second point of the triptych ought to be a multiannual programme for the whole range of structural and cooperation policies, which are the only ones that can bring about a restructuring of the budget, by distributing the Community's funds in a just manner amongst all the Member States and reducing expenditure by invididual Member States on the common policies they implemented.

Thirdly, formal proposals must be made for finding new resources and for making the VAT collection system more flexible - these two factors would help towards developing new major common policies and doing away with the difficult situations encountered by the poorer countries. The Commission ought to be able to put forward a package of proposals of this natue and it must of necessity be a package because all the proposals are necessarily linked.

We should also like to stop hearing that our Governments do not today entertain the slightest possibility of the Community having further resources in the future. Just yesterday, Lord Carrington, President-in-Office of the Council stated: 'We cannot accept a request for resources to be increased until it is clear that the budget has been restructured in such a way as to ensure that agricultural expenditure has been curbed'. This is a precondition, not a rejection of the idea.

I have heard Chancellor Schmidt on television using almost the same words. This means that the Commission could quite easily make a Proposal on own resources, in which the first Article would provide that the 1 % ceiling should be removed and a Emit of 2 % put in its place, and Article 2 could provide that this new regulation will come into force at a time when agricultural regulations of a particular type with particular characteristics have come into force. This would make the two articles interdependent.

Should the Commission decide to put forward this package of proposals at the right time, that is this set or triptych of proposals as I called it, then the Commission and Parliament could bring suitable pressure to bear on the Council so that it would be required to take a decision on these proposals during 1982.

The financial consequences of such reform could only gradually start to make themselves felt from the beginning of 1983. But some sign of their existence ought already to be perceptible in the commitment appropriations for the 1982 budget, which ought to be conceived with this aim in mind. And it is on commitment appropriations and their being carried over from one year to the next, that a reasonable and calm debate on the budget itself can, and must be focused in the coming months between the parties in the joint budgetary authority.

I hope that the speeches which follow mine in this Chamber will help to get across to Commissioner Tugendhat, and through him to the Commission, the following grave message which should be taken seriously. That is that before we begin to examine the Council's draft budget, the Commission must give us some precise and not very distant date for the presentation of this triptych of proposals I have just mentioned, thereby giving us the opportunity to deal with a budget in which there will be the first echoes new policies, stronger and better policies, and not just the financial consequences of expenditure originating from policies or political measures which have already been adopted.

Should the Commission once more ignore our message and tell us that with all its qualified and inventive staff and all its committee meetings it is not able to commit itself to dates, or should it tell us that it must first of all hear from the Council what it thinks of the Commission memorandum, then in that case I shall call on Members of all political persuasions to get through to the Commission that this time it will have to bear the consequences of its action, because the Commission will have done less than its institutional duty which is to propose policies which the Community needs, because it will not have assumed its political duty which is to abide by Parliament's frequently expressed desire for change because it will have been guilty of a budget which in our view is totally insignificant from a political point of view.

This is what I should like Parliament's message to the Commission to be, so that the promises which Commissioner Tugendhat just made us can rapidly be transformed into some precise indication of the measures, he intends to take, when they will be taken and what they will involve.