BUDGET PROCEDURE FOR 1982: COUNCIL DRAFT

by Altiero Spinelli

SUMMARY: The European Parliament examines the 1982 draft budget adopted by the Council and the motion for a resolution tabled on behalf of the Committee on Budgets by Spinelli, the rapporteur-general. "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 15 September 1981)

Mr President, I will offer no compliments and thanks either to the Presidentin-Office of the Council or to the Commission only because the lack of time forbids it. I will go straight to the matter at hand.

I speak on behalf of the Committee on Budgets, which has made a preliminary study of the budget presented by the Council: I will describe the results of this study, which are summarized in a resolution - not mine alone, but rather a production of the entire Committee. This resolution contains an evaluation of the draft presented by the Council, a suggestion to the Parliamentary cornmittees concerning the amendments to be prepared in the coming weeks, and a final invitation to the Commission.

Concerning the draft budget presented by the Council, I will touch briefly on some questions regarding structure. The Council did not retain the column of commitment appropriations compiled by the Commission, and that is unfortunate, because it clarified the entire budget; it is now somewhat confused, owing to the insertion of commitments among the remarks on the right hand page. With a minimum of goodwill one could isolate and approve this section of the Regulation in a moment.

The second matter I wish to mention is the fact that since 1978 the Council has been saying that it is unable to modify the Financial Regulation so as to solve the problem of the budgetization of borrowing and lending operations.

The third question concerns the Council's opinion on the distinction between compulsory and other types of expenditure; such a distinction differs from that adopted by Parliament and by the Commission, and an agreement must be reached on this point. The Council itself asserts in its document that it has made its decision, but this is not a question that can be decided by one institution independently of the others.

On these three questions - the second and the third being vitally important - the Committee on Budgets will make proposals when amendments are presented in order to attempt to arrive at a satisfactory solution.

I will now examine the dimensions of the budget, without however inflicting additional figures upon Parliament; on the one I hand, everyone has them already, and, on the other, both the President-in-Office of the Council and Commissioner Tugendhat have mentioned them. However, in line with what Commissioner Tugendhat said about not limiting ourselves to speaking only of percentages, I wish to say that, comparing the Council's draft budget with the budget adopted and in force for 1981, we can make a rough grouping of three types of expenditure: in the first group we include the entire EAGGF Guarantee Section, the supplementary measures on behalf of the United Kingdom, and operating expenditure concerning the staff, that is, all expenditures which have certain permanent characteristics; in the second group we include what is left over for all other policies. It can be seen that, after more than twenty years of the existence of the Community, all the expenditures for guidance, restructuring, development and coo

peration with developing countries are unchanged - from last year to this year - at 6 200 million for commitments; on the other hand, payments go from 4 700 million to 5 000 million; that is an increase of about 300 million. If we consider that in one case there is no increase, and that in the other the increase is less than 10%, we perceive that Community development has halted, or even regressed, in relation to the previous year. Looking at the policy of agricultural price supports and the policy on behalf of the UK, we see on the other hand that there are increases this year over last.

The Council adopted the following approach: in the one case, change nothing; in the other, make indiscriminate cuts. The President-in-Office of the Council himself, told us, although not at great length, that those cuts have been made, 300 million ECUs were transfered from the EAGGF to Chapter 100, but this in no way alters the amount earmarked for the agricultural policy, because at the moment of payment the sums must be returned from Chapter 100 to the EAGGF.

How should we judge this draft budget? Above all, it is obvious that the Council is telling us that the Community must stagnate; that it must, indeed, move backward. The Community is a body still in the process of becoming; we all feel the need for it, and know that its weakening will lead to a return of protectionism in all its forms, from the wine war to the chicken war, to import deposits. And it is at this dangerous moment that we are told that the Community is condemned to stagnation!

We all know that the situation is a difficult one and that it is also necessary to go forward with a plan of political unification; all this needs a solid economic base, and instead we are told that the Community must stagnate because we are obliged to practise austerity. Obviously, austerity involves all of us and we all comprehend the need for it, but the most essential need is to reduce the expenditures which contribute towards increasing consumption, that is, the expenditures for price supports and the refunds to the UK. Expenditures which lead to increased investment, productivity, and research should be augmented, though moderately, insofar as it is possible, for they contribute to an increase in production and thereby reduce inflation. The Council is acting in precisely the opposite sense: the expenditures which can contribute towards inflation although to a limited degree - are left untouched, and the others reduced.

In conclusion, it must be said that in presenting this budget the Council shows not the slightest trace of willingness to permit the Community to assume its own responsibilities. No such trace exists in any of the remarks; there is no more attention given to some policies than to others, there is no commitment to action. There is simply a hatchet, slashing the expenditures which should not have been tampered with and leaving untouched those which called for additional consideration. It may be - as everyone tells us - that at last the trends of the markets, and of the clouds, the vagaries of the weather and of the dollar oblige us to make some savings, and thus to take further action. But this means that the Community is henceforward entrusting its fate to the evolution of solar power and interest rates, renouncing the attempt to grasp an organic view of what ought to be its responsibilities.

Now Parliament cannot accept this concept of the Community and of its budget. What can we ourselves do? The idea of rejecting the budget, as was done two years ago comes to mind. Such a rejection was appropriate two years ago, for Parliament had to underline the fact that its will must be taken into consideration. Rejection is, however, a weapon which is useless in cases like the present one, for today we are urging the Council, the other arm of the budget authority, to bear in mind that the Community should have an increased rhythm of expansion; we cannot therefore reject the budget, for that would be tantamount to being obliged to proceed by provisional twelfths, perhaps for the whole of next year, at a lower level. This, then, is something to be avoided.

The advice we intend to give to the parliamentary committees is to make an overall effort to return to the levels set down in the Commission's preliminary draft, at least in regard to expenditures. The amounts may very vary slightly, but we must aim at these levels not because they are good in themselves, but because they represent the 1 % of the VAT beyond which it is at present impossible to go.

If we were to limit ourselves to this, we would have a better budget than the one presented by the Council, but it would still be inadequate. We can increase payments by 500 million ECUS, and commitments, where there were greater cuts, by a thousand million ECUS.

I am certain that the parliamentary committees will move of their own accord in this direction; however, since the absolute 1 % VAT limit exists, and since it is reasonable to conserve a certain margin for future eventualities. we can go no farther than this. While acting in this manner, we should nevertheless be aware that we cannot go on year after year saying that we are in a transitional budgetary stage. A transitional budget going from immobility to immobility, or from one position to a slightly more backward one? We must insist that there be some sign in this budget of the many reforms needed for Community policies. Because this is necessary, it is therefore equally necessary that the first step be taken by the Commission. The President-in-Office of the Council himself has told us that it is in fact possible to conceive a greater increase in Community expenditures with corresponding decreases in the expenditures of the Member States, but there Is no proposal to this effect.

We must understand that it is for the Commission to make the proposals. For this reason, the fourth part of the resolution -is an invitation to the Commission. We call upon it to consider not only the mandate it received from the Council, but also the appeals addressed to it from Parliament. Although some believe that this Parliament is only interested in spending a little more, it must be acknowledged that Parliament, in a series of debates and decisions, has on its own initiative adopted positions on what the Community's economic policy should be.

I will mention only the titles, so that we may have them well in mind. In March of 1981 we drew up a list of indications on the orientations to be embodied in this budget. Among other things, we urged that a procedure be followed for avoiding conflicts and reaching agreement from the beginning on the large financial masses, and this was ignored. In June of 1981, we voted one resolution on the future importance of the Community budget and in the same month we approved another on the restructuring of economic and monetary policies. In Septemebr 1980, we adopted a resolution on the fight against world hunger; in April 1980 we adopted one on the European Monetary System and on its consequences for economic policy. In June 1981 we adopted a resolution on the reform of the agricultural policy. On the subject of income, we adopted a resolution on own resources in April 1981, which restated the demands made in the Lange resolution of November 1979 on convergence.

These are the indications on economic policy that Parliament wants to see acted upon.

To the pressing appeal of these resolutions Commissioner Tugendhat has responded, so far, in an evasive, if not a frankly negative, manner. What we ask of the Commission is not to limit itself to that semblance of a programme adopted on 10 September - which consists solely of general policy debates and memoranda and is itself only part of the preliminary phase - but rather to make an effort to present specific proposals for decisions, regulations, and directives as soon as possible.

The Commission has already lost precious time; in March we had already requested it to anticipate its response to the mandate, to explain to us the relationship between national and Community budgets, to present proposals of reform, an overall programme for structural policies, to present the proposal for raising the maximum VAT rate. These were the things we wanted put on paper. The Commission did absolutely nothing, and now we find ourselves faced with a draft budget which can be presented and defended only because it proposes nothing.

We ask nothing unreasonable. We do not ask, that proposals be presented to us within the next four weeks, because you have wasted a year, and it is difficult to remedy that in a month. We do require you to give us a precise timetable stating when your proposals will be made, and to indicate their magnitude and why they are being made. By such action we will show that during the year 1982 there will be a determination to form a new policy, and one which will produce financial consequences. We will see to what degree it will be necessary to provide for this in the actual appropriations and to what degree in an amending budget.

All this is not impossible. It will be the sign of the end of vain discussion and the beginning of action; it will be the sign of the beginning of a new policy.

Mr Commissioners, this appeal which I believe Parliament will address to you by adopting this resolution is a considered appeal. We have meditated long concerning it, and we ask you therefore to be fully aware of its meaning and its implications.