However, to take account of the world situation, MEPs chose not to increase payments to the maximum allowed under the ceiling of the financial perspective (the EU's multiannual budget plan), which is 0.97% of the accumulated gross national income (GNI) of the Member States. The budget proposal adopted yesterday by the Budgets Committee places the level of payments at around 0.954% of GNI. This will become Parliament's negotiating position if confirmed by the plenary in late October. By comparison, the Commission's preliminary draft budget (PDB) proposed 0.899%, while the Council adopted a figure of 0.885%. The budgetary conciliation between Parliament and Council, the two arms of the budgetary authority, takes place on 21 November.
Priorities: climate, social dimension and security
MEPs decided to restore the Commission's figures for most of the budget headings, rather than follow the Council's. In some cases they even went further than the figures in the PDB, for priority policies and actions.
Climate change.MEPs want to increase by over €2bn the total spending on certain budget headings for EU measures against climate change. In many cases, it means taking greater account of climate change in existing programmes, such as rural development, transport, research and the environment. For example, MEPs wish to virtually double the payments for the LIFE+ programme. The also call for a new budget line for climate change in Heading 2 (Natural resources) to make the budget more transparent and comprehensible. This would allow measures to combat climate change and the funding allocated to this area to be grouped together. In addition to these transferred amounts, MEPs wish to allocate €20m extra to this new heading.
Social dimension and employment.The committee is also seeking to expand the budget for the EU's social and employment dimension, i.e. the policy goals mainly included in Headings 1a (Competitiveness) and 1b (Cohesion). This includes the European Social Fund (which MEPs believe should get over €135m extra for convergence, employment and growth), the Regional Development Fund and the Cohesion Fund. A package of measures is targeted at small and medium-sized firms (SMEs). MEPs also propose an increase in the payments for the programme to improve the financial environment for SMEs. In addition, they wish to launch pilot projects such as the Erasmus programme for entrepreneurs or measures to aid SMEs to seize opportunities to internationalise their activity.
Security. This priority is reflected in several budget headings amended by the committee, since it is a multidimensional objective. In Heading 3a (Freedom, security and justice), the increased funding for Frontex (the European agency for managing operational cooperation on the EU's external frontiers) is justified by the growing permanence of its missions, especially on the Union's southern borders (€10m extra in commitments and in payments, of which €5m are placed in reserve). MEPs also wish to increase the commitments for aid to projects of common interest in the transeuropean energy network. This would facilitate the building of the Nabucco gas pipeline on the Middle East-Caspian-European Union route, the aim being to guarantee the EU's gas supplies in the long term.
Fulfilling the EU's commitments around the world
Even before the vote in committee, MEPs had voiced disappointment at the figures earmarked for the EU's external policy action, which comes chiefly under Heading 4 of the budget (The EU as a global actor) and has been underfunded ever since the current financial perspective was adopted.
The Budgets Committee wants to keep the amounts for European security and defence policy laid down in the Commission's PDB. It would also preserve the EU funding for Palestine proposed in the PDB and increased by the Commission in its amending letter (€300m in commitments and €280m in payments). Funding for aid to Kosovo, financed from several different headings, is also the same as the amount proposed by the Commission. Aid for reconstruction in Afghanistan (€160m in commitments and €150 in payments) also remains at the same level as in the PDB.
However, the experience of past years clearly shows that these figures are not enough. MEPs therefore wish to persuade the Council to grant more money to external policy. The money needed could be found by, for example, using the flexibility mechanism or emergency aid. However, in line with the existing agreement between the institutions, the use of these sources requires the consent of both Parliament and Council. This will be a crucial issue at the negotiations on 21 November. An amendment adopted by the Budgets Committee groups together all the policy priorities for which the budget does not cover the extra funding demanded by MEPs (which would exceed the allowed ceilings of €390m).
Georgia and food aid for developing countries
In addition to the existing commitments that are underfunded in Heading 4, new objectives have recently emerged: food aid for developing countries and reconstruction aid for Georgia.
Following the increase in food prices in 2007 and 2008, the European Council of June 2008 called on the Commission to bring forward a proposal to set up a new fund to support agriculture in developing countries. The Commission suggested a billion euros, with €750m committed under the 2008 budget and €250m under the 2009 budget. MEPs included the amount needed in 2009 for food aid in the same negotiation package as Palestine, Kosovo and Afghanistan. As regards the funding needed for 2008, the committee will vote on the 2008 amending budget on 13 October.
Turning to the commitments given by Member States on reconstruction aid for Georgia, MEPs adopted a number of amendments to take account of the situation in that country. Most of these amendments are more important politically than financially. Parliament cannot allocate funding while there is no legal basis and while the amounts the Member States are willing to put on the table are still not known. MEPs therefore decided to create a special budget line for aid to Georgia but without granting it any funding, pending the outcome of the donors' conference.
