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European Parliament: 1994 Draft Budget and the 1993-1999 guidelines

The Budgetary Committee of the European Parliament, meeting on 18-22 October 1993, considered some 600 amendments to the Community Draft Budget for 1994. The Council's agreement on the 1994 Draft Budget, comprising ECU 72,406.9 million in commitments and ECU 69,011.5 million ...

The Budgetary Committee of the European Parliament, meeting on 18-22 October 1993, considered some 600 amendments to the Community Draft Budget for 1994. The Council's agreement on the 1994 Draft Budget, comprising ECU 72,406.9 million in commitments and ECU 69,011.5 million in payments, has trimmed a total of ECU 760 million in commitments and ECU 1,000 million in payments from the figures proposed by the Commission, submitted to the Council in August 1993. The Council's cuts mainly affect aid to the Third World, a number of internal policies (particularly the new Trans-European Network programme, consumer protection, and the environment), and research spending. The appropriations of ECU 36,465 million for agriculture and ECU 23,176 million for regional and social spending have been left intact, conforming to the Edinburgh Summit budgetary guidelines for 1993-1999. There is pressure on administrative expenditure, with an extra ECU 50 million required to meet obligations on pensions. The Council hopes that the introduction of more advanced technology and data processing techniques will bring productivity gains and release staff for new functions required under the Maastricht Treaty. Greatest concern focuses on agricultural spending, which forms more than 50% of the total Community budget. Events in mid-1993 (the ERM situation, plus freezing of green rates to support German farmers) will raise next year's farming budget by more than ECU 1,500 million, while the Commission's increased "set-aside" proposals are expected to add a further ECU 352 million to spending. The possible new agreement with the USA on agricultural subsidies will also affect CAP financing. However, the ceiling for the agricultural budget as fixed at Edinburgh has already been reached. The Draft Budget also includes ECU 6 million to take account of new provisions under the Maastricht Treaty and negotiations on the accession of new Member States, plus ECU 12 million for the new Regional Committee, pending a decision on its structure. With regard to general budgetary procedure: The preliminary Draft Budget, first proposed by the Commission, is communicated to the Council for discussion and amendment. The Council's agreed text is then presented (before 5 November) to the European Parliament for a first reading and the voting of amendments. Parliament's amendments require an absolute majority (260 votes) to be approved (Parliamentary "modifications", which concern agricultural spending, may be approved on a simple majority of the votes cast). Following the European Parliament's vote on the first reading the amended Draft Budget is sent to the Council. Articles or chapters not changed by the Parliament at this stage are deemed to be adopted. The Council then has 15 days in which to react by a qualified majority to the Parliament's amendments and proposed modifications. The Draft Budget is returned to the Parliament for a second reading, which takes place in December (this year, the session of 13-17 December). Here Parliament may reinstate amendments rejected by the Council, in the area of non-compulsory expenditure, on the basis of a vote which requires the support of both a majority of Members and three-fifths of the votes cast. After the second reading, the President of the European Parliament is empowered to decide that the procedure has been completed and declare the Community Budget adopted. To deal with budgetary disputes not settled by the normal procedure (the Council may revoke, and the European Parliament reject, budgets) an inter-institutional agreement was signed between the Commission, Council and European Parliament, covering the period 1988-1993, laying down broad guidelines on EC expenditure. The Edinburgh Summit of 1992 has established a new financial framework for 1993-1999 and introduced more specific budgetary guidelines with fixed ceilings for each category of expenditure. To formally come into effect the Summit's figures for future spending require acceptance by both the Commission and the Parliament in the shape of a new inter-institutional agreement. However, a corresponding agreement has not yet been signed. In addition, the European Parliament is uneasy about the rigid limits now fixed on expenditure, which it feels may impose constraints on its powers. Finally, a significant number of Members of the European Parliament are particularly dissatisfied by the scaling-down of the resources allocated to research. Debate and voting on Community finances for 1994, and on subjects affecting future budgets, will form central elements of the European Parliament's business during its session of 25-29 October 1993. The first-reading vote on the 1994 Community Budget is tabled for 28.10.1993 (10 a.m.).

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