Approval of the Minutes President The Minutes of yesterday's sitting have been distributed. Are there any comments? Seppänen Mr President, there is a clear error in the Minutes relating to Commissioner Bangemann's speech here. Mr Bangemann was to deliver two statements: on the Commission's position on transatlantic relations and on the Echelon system. Mr Bangemann did not mention the Echelon system in his speech and did not even say he intended to speak about it later. This can be checked from the verbatim report of the sitting. Consequently, it must be said that Mr Bangemann was in breach of parliamentary procedures when he failed to speak on the Echelon system, and only delivered one of the Commission's statements. Mr Bangemann was not at all prepared to speak about Echelon. He had nothing to say on the subject. He did not know anything about it. For this reason, I do not think that Parliament should accept that the Commissioner made a statement on Echelon. I propose that the Commission should be obliged to make a statement on Echelon once again, so that the issue is discussed properly and Members of Parliament can make speeches on the subject. I would like the Minutes to be changed regarding the matter of Mr Bangemann's speech, and the matter to be sent back to the Commission so that it can be settled. President Thank you for your statement, Mr Seppänen. I do not actually think we are talking about violation of our Rules of Procedure, but there was a problem of communication between our services and those of the Commission, and as a result yesterday's debate did not take place according to the agreed procedure. So it is understandable that you and Members who were present during the debate you referred to were disappointed. Kreissl-Dörfler Mr President, unfortunately what Mr Seppänen said is true - there was no misunderstanding. Reference was made three times to the necessity of having an overall debate, and then we were told that it would be split into two parts, although we all knew that this would not work. It was only at the end that we were told that questions could be asked, and then only the two big political groups were able to have their say. This is simply unacceptable. We strongly protest against this procedure. The way in which Mr Bangemann dealt with this issue yesterday was inadmissible. President Thank you. Are there any other comments? (The Minutes were approved) Amendment of Financial Regulation President The next item is the report (A4-0308/98) by Mr Dell'Alba, on behalf of the Committee on Budgets, on the proposal for a Council Regulation (EC, ECSC, Euratom) amending the Financial Regulation of 21 December 1977 applicable to the general budget of the European Communities (COM(98)0206 - C4-0290/98-98/0130(CNS)). Dell'Alba Mr President, ladies and gentlemen, I realise interest in this report is not exactly lively, but it is an important document for our Parliament, for the life of the European Union and for the full incorporation of the instruments of economic and monetary union into the Union's legislation. The Financial Regulation forms part of the basic provisions, and serves to govern relations between the institutions and the way in which, starting with the Commission, they implement the budget of the European Union. The introduction of the euro into the EU context calls for a series of measures, on this occasion amending the Financial Regulation. In this report, Parliament expresses its opinion on the amendments the Commission is proposing and which we approve in substance, with a series of amendments which I shall try to illustrate briefly. The context of this report is limited, which is why the Committee on Budgets decided to go right to the end of the road signposted by the Commission. This means limiting the specific amendments to the Financial Regulation to the most urgent aspects, in other words those which allow us to implement these measures on 1 January 1999 - specifically to adapt the Financial Regulation to the euro. It means postponing other amendments until the next, and imminent, new proposal for amendment. And I have to say, as rapporteur and on behalf of the committee, that while we may well support them entirely, we decided not to uphold those other amendments on principle. That also applies to the amendments from colleagues who proposed broadening the scope of the amendments. Let us look at the details. Firstly, the euro has to be introduced into the Financial Regulation and the debit/credit mechanisms in the Union budget adapted for those countries belonging to the euro area. Secondly, the Financial Regulation needs to be adapted to a very important provision of economic and monetary union: the system of fines. Countries which do not respect the standards and rules for applying the common economic policy on schedule will be subject to fines. Parliament's amendments are not intended to record these fines in the budget, but to transfer them in accordance with the Treaty of Maastricht - using a derogation from the general provisions - to the countries belonging to the euro area. Finally, many of these amendments relate to the implementation powers of the other institutions. The Treaty of Amsterdam abolishes the common organisational structure between the Committee of the Regions and the Economic and Social Committee. The amendment we are tabling seeks to adapt the text to that provision. We are asking for the Ombudsman to be included among the institutions recognised as having powers of implementation, along with the Committee of the Regions and the Economic and Social Committee. We think that is possible and we are proposing that amendment in my report. Sarlis Mr President, I would like to stress that the Committee on Budgetary Control unanimously approved four amendments tabled by the group to which I belong, the European People's Party, to make it possible to produce an opinion by the Committee on Budgetary Control, because what happened was this: we made our decision after Mr Dell'Alba's report had been approved by the Committee on Budgets. I would like to focus Parliament's and the Commission's attention on an amendment we are tabling, which relates to extending the powers of UCLAF to the control of other institutional bodies of the Community as well. This is an addition to Article 22(2), enabling UCLAF to check the way parts of the budget which relate to other institutional bodies are dealt with, and I would be very grateful if that amendment were to be approved. The other three amendments concern administrative matters related to certain programmes involving third countries, particularly candidates for membership. They concern the ability of those countries to manage Community funds on their own. In conclusion, Mr President, I repeat that it is important for these amendments to be passed, especially the one which I told you concerned extending the powers of UCLAF so that it can check other institutional bodies and services of the European Union. On that point, moreover, I should like to hear the Commissioner's views, in other words whether the Commission accepts those four amendments by the Committee on Budgetary Control Rübig Mr President, ladies and gentlemen, in principle I can support the proposed amendment of the Financial Regulation. The desire to develop European integration further and the legal bases for this - the Maastricht Treaty, the Edinburgh summit and the Amsterdam Treaty - have caused substantial changes to be made to the original Financial Regulation. The text's coherence needs to be restored and this amendment should, therefore, be welcomed as the first stage in a general review. Allow me, however, to use the debate on this formal amendment above all as an opportunity to emphasise the importance of the real issues underlying it. Amending the Financial Regulation is a small but significant step on the way to the third stage of monetary union. Firstly, and this is something we already know from the ongoing negotiations on next year's Union budget, the euro will replace the ecu as a currency unit in just a few weeks' time. The budget also has to be prepared for this. Secondly, the rules governing the Community budget need to be adapted to take account of the pact on stability and economic growth. This is the backbone of the single European currency. We all remember the efforts made by individual Member States to achieve economic convergence, which constitutes the precondition and basis for a stable euro. The stability and growth pact should ensure that excessive deficits are not permitted in the participating Member States in the future either. The special mechanism of sanctions will also affect the Community budget, which will be the appropriate instrument for applying it. This system is the reason why the proposed amendment is so important. Here, and in general, our aim must be to do all we can internally to prepare for the introduction of the euro, while at the same time ensuring maximum transparency. Colom i Naval Mr President, what can I add to the words of our rapporteur and draftsmen? Very little, I believe, and I therefore hope to be brief. However, I would first like to congratulate them and particularly Mr Dell'Alba who has done some excellent work on a routine yet fundamental issue. Legislative work is perhaps normally less interesting than own-initiative reports but it is just as, if not more, important. I have no wish to argue with Mr Sarlis, who used part of his speaking time as draftsman to claim certain amendments for his own political group. I would, however, like to remind this House that the amendment he highlighted is, in fact, a compromise amendment between the Group of the European People's Party and the Group of the Party of European Socialists. Moving straight on to the subject - and if there is any time left, I will look at other questions later - the PSE Group would like to emphasise two points: the updating of the regulation and the Ombudsman. As Mr Dell'Alba rightly said, we are now faced with updating once again the 1977 Financial Regulation. This update includes the new elements contained in the Treaty on European Union and the Treaty of Amsterdam, or at least introduces the regulatory instruments to be used when the latter enters into force. There is no objection to this; the opposite is, in fact, true. However, this is the umpteenth update. No one knows any longer whether it is the seventh, eighth or ninth. No one really knows. Indeed, if the new Financial Regulation is to be formally correct, perhaps what we really need is a new Financial Regulation, with a new basis. The European Union that is preparing to enlarge towards the East is very different from the European Economic Community of the 1970s, when the foundations of this Financial Regulation under debate were laid down. It was a Community that did not even have a European Parliament elected through universal suffrage, and which was beginning the negotiations on the accession of the southern countries: Greece, Spain and Portugal. We are very far from that situation. I therefore believe that the Commission, which has told us so often that it is in favour of drawing up a new Financial Regulation, should give fresh impetus to that idea. We understand that there are even working documents on this matter. Incidentally, we have not been sent any of these documents but we have, of course, managed to obtain some of them. These working documents should be forwarded to Parliament and should be debated. In addition, we need to establish a dialogue on this revision of the new Financial Regulation and to do so as soon as possible. It is absolutely urgent. The other major political point involves giving appropriate consideration to the Ombudsman. The European Parliament could certainly lay claim to the creation of this post, since it came about as a result of a parliamentary initiative taken up in Maastricht. However, we believe that the political and institutional body that is the office of the Ombudsman requires the specific treatment afforded it by the amendments to the proposal for a regulation. The very independence of the Ombudsman demands that it be excluded from the European Parliament's budget. If the Committee of the Regions and the Economic and Social Committee are consultative bodies of the Council and are given their own section, why was the Ombudsman going to be included in Parliament's section of the budget? There is no political logic here. We therefore support the move to designate it a specific section of its own. Perhaps half the amendments to the proposal for a regulation relate to this issue. The remaining amendments, ladies and gentlemen, relate to other aspects of this update with which we are in total agreement: the euro, the payment of fines in connection with the stability and growth pact, the decentralised bodies, and the necessary and logical dissolution of the common organisational structure of the two committees, since it has been clearly demonstrated that the Maastricht 'invention' was not efficient. We agree with all of this and the amendments reflect what we could call the House's doctrine on the issue. I am therefore not going to go into detail in that respect. However, I would like to say once again that we hope that the European Commission will very soon present us with a Financial Regulation already conceived for a Europe that will embrace a great deal more than its current responsibilities. Kjer Hansen The Liberal Group also thinks that some important amendments have been proposed here. I want to thank especially Mr Sarlis from the PPE Group for ensuring that the amendments tabled by the Committee on Budgetary Control were put forward. As one who is very active in the PHARE area, I am of course very keen to promote amendments concerned with decentralisation, which may facilitate better management of PHARE resources and at the same time help to expedite the process of enlargement to take in the Eastern and Central European countries. I must say how surprised I am that the Commission has not contributed any input of its own on decentralisation. We already started this discussion last autumn, when the Commission took a very positive stance on decentralisation, which it said it wanted and was prepared to implement. The question was also taken up in the Agenda 2000 papers. Even so, the Commission has not taken the opportunity to put forward concrete proposals in this area. It is odd when people say one thing and do another. Hence it is for us in the European Parliament to hold the Commission to the things it has promised and the commitments it has stated. What is important about decentralisation is that it serves to convey a clear political will to help Eastern and Central European countries qualify for EU membership. It is, so to speak, the precursor to the Structural Funds, and at the same time it provides a means by which the new Member States can put their administrative structures in order, gain some experience and be well prepared for accession to the EU. In addition these are recommendations which will find favour with the Court of Auditors, because they involve changes which may help us overcome some of the problems currently experienced in the management of the PHARE programme. I am thus happy to recommend these amendments to my colleagues and hope for their sympathetic support. They serve to give a clear signal that we want to promote enlargement. They may pave the way for membership and may ensure that we get a more effective PHARE programme. Liikanen Mr President, the Commission welcomes the generally favourable view which the Committee on Budgets suggests you adopt on the proposal for the eighth set of amendments to the Financial Regulation. This is the last specific amendment proposal before the Financial Regulation is redrafted, on the subject of which, on 22 July, the Commission presented a working document intended to open up a wide-ranging interinstitutional consultation. Mr Colom I Naval wanted the Commission to present this formally and officially to the European Parliament. There is no problem, I will do so. This eighth set of amendments does not seek to substantively modify the Financial Regulation. The proposal simply seeks to bring the urgent and limited amendments required by the launch of the euro and the stability pact and the entry into force of the Treaty of Amsterdam whose sole effect on the Financial Regulation - given the removal of Protocol No 16 on the common organisational structure of the Economic and Social Committee and the Committee of the Regions - is to introduce a specific section for each of these two bodies. The Commission can undertake to adopt several of the amendments proposed by the Committee on Budgets. These are Amendments Nos 2, 3, 4, 6, 7, 10, 11, 14, 16, 19 and 20, designed to introduce a specific budget section for the European mediator, and Amendment No 22 which provides a different date for the entry into force of provisions relating to the euro and the stability pact, that is 1 January 1999, and for provisions relating to the Treaty of Amsterdam, that is following ratification. The Commission is not, however, inclined to adopt certain amendments, which I advise against both for the technical reasons which I will explain and for the essential reason that these are substantive amendments which will make it impossible to respect the tight deadline imposed by the launch of the euro on January 1 next. In connection with Amendment No 21, contrary to what this suggests, the amount of fines for excessive deficits, as at present the amount of fines for violating the rights of free competition, are not very clear at the time of drawing up the budget. The budget is not able to include any more than an outline framework. In connection with Amendments Nos 1, 8, 9, 12, 13 and 15 on the agencies, these have their own budget and financial regulation. They are not to be covered by the Financial Regulation, which relates solely to the general budget, but rather by the specific regulation which applies to these agencies. In connection with Amendments Nos 5 and 17 on interinstitutional cooperation, the Commission considers that this cooperation can be organised, as is the case at present for open competitions and purchases, by means of the administrative arrangements between the institutions. In connection with Amendment No 18 on the Commission's powers of inquiry, this is not a matter for the Financial Regulation but for arrangements between the institutions. The Commission is not opposed in principle to widening the powers of the UCLAF, but this can be done through an arrangement between the institutions. As regards the redrafting of the Financial Regulation, the corresponding amendments could, if necessary, be included at the appropriate time. The question concerning Amendments Nos 1, 3 and 4 by the Committee on Budgetary Control on the decentralised management of PHARE was put by Mrs Kjer Hansen. During this month of September, the Commission will be adopting an amended proposal for a regulation on the coordination of assistance to candidate countries as part of the preadhesion strategy, in order to permit the decentralised management of PHARE. This point will also be dealt with at the time of redrafting the Financial Regulation. President The debate is closed. The vote will take place at 12 noon. Draft budget for 1999 President The next item is the presentation by the Council of the draft general budget for 1999. Ruttenstorfer Mr President, ladies and gentlemen, it is an honour for me to be here today, to inform Parliament of the results of the Council meeting on the budget, which took place on 17 July in Brussels. Before entering into the details of the successful conclusion of our discussions, however, I should like to highlight the consistently improving level of cooperation between our institutions - Parliament, the Council and the Commission. This was already plain to see last year, and I am very pleased that it seems to be continuing this year. The two trilogues of 31 March and 23 June were, despite differences of opinion on the substance, characterised by a spirit of mutual understanding for each party's respective views, concerns and priorities. The same can probably also be said of our discussions at the Council meeting of 17 July, when the main issue was that of legal bases. We shall be debating this under the next item on the agenda. I should now like to turn to the draft budget for 1999 and, firstly, describe to you the principles by which the Council was guided in its deliberations. On agricultural expenditure, we agreed to examine a letter of amendment in the autumn, in order to take account of the decisions of the June 1998 Agriculture Council and the updated estimates of requirements. We decided to honour the commitments made in Edinburgh to guarantee the future funding of the Structural Funds. For the remaining policy areas, we established clear priorities for the financial resources available, and set amounts for them in the budget which are realistic and yet do not hinder important Community policies. We took account of both the criteria in the Interinstitutional Agreement of 29 October 1993 and the Court ruling of 12 May 1998 on the provision of legal bases. In addition, we took into account minor items of expenditure, and the fact that the financial perspective ceilings leave considerable room for manoeuvre. We approved a limited increase in all administrative expenditure, and agreed that unavoidable expenditure should not be ruled out from the very outset. We decided against creating any new posts, apart from those needed in connection with the last enlargement or the implementation of the Amsterdam Treaty. Furthermore, we decided not to create any additional posts in the context of the career policy, either by converting posts or increasing them in number. In so doing, we were of the opinion that the response to practical needs must, as a general rule, be to improve specialist skills, modernise equipment and working methods, and restructure existing posts, and that this principle should only be disregarded where it can be proved that to do so is unavoidable. Observing the principles we felt underlay the adoption of an appropriate budget led to the following results in practice. In the case of agricultural expenditure - Category 1 in the financial perspective - the Council has retained the total amount proposed by the Commission in its preliminary draft budget. Similarly, for the Structural Funds, the Council has kept the amounts proposed by the Commission in its preliminary draft budget, so as to comply with the Edinburgh decisions. The Council has decided to reduce both the commitment appropriations and payment appropriations for internal policies. In the case of external policies, the Council has decided to increase the commitment appropriations and reduce the payment appropriations, so as to take account of the decisions made at Cannes. Finally, the Council accepted a limited increase of 1 % in overall administrative expenditure. As I have already stated, the work involved in implementing the Amsterdam Treaty - in particular, incorporating the Schengen secretariat and the analysis, early-warning and policy-planning centre under the second pillar - have made some exceptions to this rule necessary. For the small bodies, the Council has again applied the method established last year, of granting a flat-rate total amount for routine administrative expenditure. The effect of the Council's decisions on the appropriations in the draft budget can be summarised as follows: commitment appropriations total EUR 96 500 million, an increase of EUR 5500 million, or 6.05 %, on the 1998 budget; payment appropriations total EUR 85 900 million, an increase of EUR 2300 million, or 2.81 %, on the 1998 budget. The payment appropriations thus correspond to 1.10 % of Community GNP. For internal and external policies, there are still margins of EUR 937 million and EUR 878 million respectively beneath the financial perspective ceilings. Finally, I should like to thank all the members of the European Parliament delegation who actively participated in our discussions at the Budget Council on 17 July. I look forward to continuing to work in cooperation with this Parliament, and in particular with both the chairman of the Committee on Budgets, Mr Samland, and the two rapporteurs for the 1999 budget, Mrs Dührkop Dührkop and Mr Viola. I hope that our two institutions will be able to bring the 1999 budget procedure to a successful conclusion, just as they did for the 1998 budget. Mr President, ladies and gentlemen, thank you for your attention. Liikanen Mr President, the draft budget for 1999 resembles the preliminary draft budget closely. A difference of only 0.5 % confirms that there is a broad convergence of views with regard to the 1999 Community budget. The Commission and the Council have had to reconcile rigour with the obligations of the Union, in particular with regard to the decisions of the European Councils of Edinburgh and Cannes. As far as compulsory spending is concerned, the Commission will submit an amending letter at the end of October to take account of the last available information for the finalization of the 1999 budget. This will be the second application of the procedure successfully established in 1997. Contrary to last year, however, there may well be spending requirements if current developments on some markets are confirmed. On structural actions, the draft budget establishes the payment credits at the level proposed by the Commission. This should assure the correct financing of the requirements for 1999 in the light of the Edinburgh decisions. Category 3, internal policies, is the only category where the Commission proposals have been seriously cut, even below the 1998 level. This is sometimes difficult to understand as some of these cuts concern Council priorities, notably Leonardo and small and medium-sized enterprises. These cuts are explained in relation to the reference amounts of regulations but it is not in the spirit of of the common declaration of 1995 to consider these reference amounts as if they were maximum amounts. Finally, on external policies, for the first time I can remember the draft budget exceeds the preliminary draft budget. This is logical on the assumption that the requested reinforcement of PHARE in 1998 is not taking place and the Council was to complete the financing of the external cooperation programmes as they were decided by the European Council at Cannes. It is commendable that the Council provides this financing mainly through additional spending and thus limits the cuts in other important areas of external cooperation. Above all, the draft Community budget for 1999 is a constructive step in the 1999 budget procedure. It augurs well not only for next year's budget but also for the more far-reaching decisions which will soon have taken place on the next financial framework. Samland Mr President, ladies and gentlemen, before addressing the Council's presentation of the draft budget after its first reading, I should like to say that the cooperation between the Council, Parliament and the Commission over the conciliation on legal bases, which we will be debating shortly, has been exemplary. In the first place, in the nine years I have been doing this job, I have never before experienced a conciliation which started at 11 a.m. and finished at 7 or 7.30 p.m. with Parliament cooperating. Afterwards, they even took it upon themselves to decide the budget as well. Secondly, they can be proud, not only of a long meeting, but also of the result. The Austrian Presidency has contributed to this and I wish it just as much skill and success in further deliberations on the budget and on Agenda 2000. That was the praise - and it is rare coming from me, so make the most of it - but now comes the criticism. What does this budget tell us? We have stressed from the outset - and Mrs Dührkop Dührkop will also say this in her report in a moment or two - that this budget is a bridge between the expiring financial perspective, on the one hand, and the new financial perspective, which will begin in the year 2000, on the other. We view it as such. That is why I should like to make the following general statement on behalf of the Committee on Budgets: we will make every effort to place the 1999 budget procedure in the context of the discussions on Agenda 2000, and the recommendations in Mr Colom I Naval's report relating to the fundamental issue of flexibility. We want to see progress on these aspects of Agenda 2000, if we are to conform to a budget procedure based on achieving lowest possible expenditure, i.e. on keeping to Member States' average expenditure at Community level. I am only announcing this here, because it will, of course, have implications for the discussions on the budget in first and second reading in this House. I should like to make a few comments on the results of the Council's deliberations. Firstly, on agriculture. We were a little disappointed that it has not been possible to send out a clear signal on agricultural policy as early as the first reading in the Council. But we are relying on the fact that we will all take the agreed ad hoc procedure seriously and that on the basis of a Commission letter of amendment we will achieve some results in the conciliation procedure in November. By results, I mean that we must limit expenditure in this sector and identify procedures to allow these resources to be put to optimal use. We tabled a proposal for a reserve last year with this in mind, and we will be doing so again. Indeed, we have already made technical proposals. I might remind you once again that expenditure on agriculture is ECU 1300 million in excess at present. Had we not, in the face of bitter resistance from your 15 agriculture colleagues, cancelled ECU 1000 million of spending last year, we would now be ECU 2300 million over budget in the agricultural sector. The experiences of this year and the last 15 years show, therefore, that we can take this step, and can do so without putting the legal provisions laid down in directives or regulations in the agricultural sector at risk. Secondly - and this comment is also directed towards the Commission - I am yet again hearing calls from some Member States for export refunds on pigmeat, butter and milk to be increased, to rejuvenate the Russian export market, which is currently in a state of collapse. Community policy cannot aim to control currency fluctuations outside the Community by raising export refunds. So do not let them persuade you otherwise, Mr Liikanen, but retain the position you had in 1997; prevail against the six, and take the same line when it comes to securing savings in the agricultural sector for the 1999 budget. The contents of Categories 2, 3 and 4 are interlinked. We have already discussed the growth of Category 2 with you many times here in this House. The reason for this is not that the money is needed, but that this is the last year of the financial perspective; the Structural Funds change on 31 December 1999, and any unutilised appropriations are carried over to this year. We have absolutely terrific rates of increase here - between 17 % and 18 % in commitment appropriations and around 10 % in payment appropriations. There is actually an incredible amount of money to be dealt with here. As a result of this increase, because you did not have the courage to take action on this issue - despite the fact that several Member States, such as France, actually made proposals during discussions in the Council - you are now having to cut Categories 3 and 4 by the same amount by which you have increased Category 2. You will see, for example, that in Category 3 you have cut funding for the Leonardo programme. That stands in direct contradiction to your own work programme, where you state that you wish to strengthen educational programmes as a means of making Europe more attractive to business. The EUR 100 million you are cutting there is not going because it has been proved surplus to this programme's requirements - in that case perhaps EUR 86.45 million would have been the sum withdrawn. No, you are cutting EUR 100 million to make your sums add up, to bring the rates of increase in Category 3 down so that they compensate for the high rates of increase in Category 2. The second area I wish to address is external policy. The situation here is far worse. In Council, you did not secure the adoption of a supplementary and amending budget for 1998, containing an additional ECU 150 million for PHARE. If we are honest, we have to admit that PHARE will not need the ECU 150 million, either in 1998 or in 1999, because the interim accounts for the 1998 budget year, which were released by the Commission on 30 June 1998, reveal that in the first six months of the year, ECU 1000 million of the appropriations available under PHARE had still not been committed and, even worse, that more than ECU 2500 million had not been awarded and spent in contracts. That means that there is ECU 2500 million on the table, ECU 1000 million of which is completely free and ECU 1500 million of which might be spent in contracts, if the contracts materialise. And then we are supposed to increase this by a further ECU 150 million, while at the same time making cutbacks in, for instance, spending on non-governmental organisations. This has nothing whatsoever to do with sound financial policy, but it does have something to do with ideology. A decision was made once upon a time in Cannes and now it has to be applied at all costs. Parliament had no hand in this, and will not, therefore, be accepting either the proposal contained in the Council draft, or the Commission proposal to achieve this through early procedures. Neither approach is appropriate, and we need to tell the applicant countries, aspiring to become members of the Community, that if together we are not able to commit the appropriations in the time allowed - reminding them once again of the annuality of budget appropriations - then these appropriations cannot be used. And you will see that this House will not agree to a ECU 150 million top-up in Category 4 at the expense of non-governmental organisations throughout the world. Finally, there is the question of how research, a very important area, is going to be dealt with. You are aware, Mr President-inOffice, that in parallel to our 1999 budget negotiations, discussions will be taking place on the total appropriation for the fifth framework programme for research, which accounts for a considerable part of Category 3 expenditure in the budget. You will also be aware that there is a discrepancy between Parliament's proposal, for ECU 16 300 million over five years, and the Council's position hitherto. I can hear the voice of your colleague now, announcing that we will certainly reach a compromise on 29 September. I would be glad if this were so. It is up to the Council, and certainly not Parliament, to come forward with a compromise formula. And a figure of ECU 14 000 million is not an acceptable compromise; the figure will instead lie between ECU 14 000 million and ECU 16 300 million. You know that this is an important decision, because it will have a major impact on the 1999 budget - over 60 % of Category 3 appropriations are allocated to research. If we consider the issue of funding for networks, for example, it is clear that it will be possible to strike a balance between networks, on the one hand, and research, on the other, if the outcome of the agreement on the fifth framework programme for research is known. That is why I can only repeat my request to you - and your colleagues, the Finance Ministers - to please ensure that sufficient pressure is exerted on your side, so that we reach an agreement on the budget allocation of the fifth framework programme for research for the next five years in good time, before the first reading of the 1999 budget, or at the latest before the second reading. In the same spirit, may I venture to hope that our further discussions on the 1999 budget are productive, interesting and exciting. Dührkop Dührkop I would also like to add to the praise for the Council presidency for its cooperation, which we believe has been exemplary up until now. My speech will, in fact, be brief since the chairman of the Committee on Budgets has given a very comprehensive demonstration of the gaps that, in spite of the praise for the presidency, can still be seen in the 1999 draft budget procedure. However, I would like to highlight several points. First, I would like to reiterate the fact - as has already been mentioned - that the 1999 budget must represent a bridge. That bridge should not be thought of purely in terms of accounts, but should represent a crucial step forward towards an agreement for Agenda 2000 and the new financial perspectives. I believe that, as part of that bridge, we have together forged an important element: the agreement we reached on the legal bases. I would, nevertheless, like to emphasise that it is only one element, and I believe that we should be pleased that we have settled a dispute that had already been going on for many years. During conciliation, the European Parliament had the chance to set out its political priorities. I am going to refer here to one category in particular. The chairman of the Committee on Budgets has already stated exactly what Parliament believes in relation to Category 1 and Category 2. We do not think that the presidency has initiated an appropriate analysis of the financial resources that would be in the interests of a healthy Community budget. As for Category 3, I would like to say as rapporteur that Parliament cannot agree with how it reads. Category 3 is a true scapegoat, to use a common expression. In this category, to ensure that its accounts are balanced within the 1999 budget, the Council has made cuts in policies that are fundamental for the European Parliament. I call on the Council - and Mr Samland also mentioned this - to recognise its own lack of consistency. It is strange that its priorities, as set out in Cardiff, match those of the European Parliament, yet the same Council states with regard to the Leonardo programme that - and I quote the exact English text - ' while bearing in mind the considerable success achieved by these programmes', it is cutting ECU 100 million. Another interesting move relates to the global package agreed at the beginning of this year on employment policies. The importance of this agreement was highlighted by the Council itself in Luxembourg at its first reading, yet ECU 14 million are being cut from the support for SMEs, despite this being a priority, according to the Council. Another paragraph from the Cardiff European Council, paragraph 12, states that we are going to pay particular attention to disadvantaged groups, to ethnic minorities and to people with disabilities. However, at the same time, the Council, as well as the presidency, which had presented these policies to the European Court of Justice in Luxembourg, are removing these programmes from the budget due to a lack of legal base. Finally, I would like to say with regard to Category 4 that I fully agree with the approach put forward by the chairman of the Committee on Budgets, which has also been set out by Parliament in its guidelines. We are not going to allow the PHARE programme to be implemented at the expense of other obligations the European Union has towards third countries. As for Category 5, Mr Ruttenstorfer, I would like to remind you that, apart from the fifth framework programme on research and development, before Parliament's first reading we have another issue that remains to be settled: the question of pensions. The worker has done his part; now the employer must do his. I would like to repeat my willingness and Parliament's willingness to cooperate in the future in order to reach a satisfactory conclusion in terms of this bridging budget, bearing in mind, as far as possible, both your and Parliament's priorities. Viola Mr President, ladies and gentlemen, I would endorse what the chairman of our committee said about close collaboration with the Council and the Commission in the trilogue and at first reading of the budget for 1999, which was brought forward by the Council this year to 17 July to give us adequate time in view of the tasks and places of work imposed on us by the Treaties. In this financial statement, the sum earmarked for administration amounts to EUR 4.4 billion, with a total margin of EUR 300 million as compared with 1998. As last year, the Council has deemed it appropriate to fix an inclusive total amount to be assigned to the other institutions for ordinary operating costs with an increase of 1 % over 1998 levels, with provision, however, for a significant margin to adjust the increase for exceptional and often justifiable cases. This margin has been interpreted rather generously by the Council for itself, with a rise of 5.14 %, the increase for the Commission being 1.63 %, while for all the other institutions, Parliament included, it was 1.52 %. In this context, it is worth underlining that our institution is the only one below the 1 % threshold, with a rate of increase of 0.88 %. As regards staff, the Council has accepted the creation of new posts only if they are connected with enlargement and the implementation of the Treaty of Amsterdam, and has rejected the conversions or upgradings requested by the other institutions. In more detail, the first reading provides for the creation of 109 posts and only 10 conversions, modification of the establishment plans of the institutions by converting some permanent posts into temporary ones, and transfer to the Commission of five posts taken from the other institutions for the medical insurance service. In fact I am doubtful about two aspects of the staff policy adopted by the Council at first reading, and I will explain these while taking care not to go into the merits of the Council's independent choices. The first point is that since the Council has seized the opportunity to allow its own staff to increase by 71 to handle the implementation of the Treaty of Amsterdam and enlargement, it might have been appropriate to establish a common approach to this from the outset, given that this problem is common to so many other institutions, from Parliament itself to the Commission and the Committee of the Regions. The second point is that frankly it is difficult for me to understand why, if the Council thought it right to award itself 71 new posts, it refused very modest demands from the other institutions, for example the Committee of the Regions, which has undoubtedly seen significant increases in its own responsibilities since the Treaty of Amsterdam. As regards the Committee of the Regions and the Economic and Social Committee, and the consequences of the Treaty of Amsterdam, mention should also be made of the abolition of Protocol 16, that is the common organisational structure which linked the two committees. I believe that interinstitutional collaboration and avoiding duplication of costs wherever possible - as I have frequently stated - should be the criteria to apply in dealing with all aspects of the division imposed by Amsterdam, so that moving to full reciprocal autonomy for these two committees does not become a cause of dysfunction, jeopardising cooperation and escalating costs. Turning to the Courts, the 1 % criterion is exceeded for the Court of Justice, resulting in the creation of 10 new posts, but the Council did not accept the Court of Auditors' request for allocations for its building projects, where the Commission has provided for such expenditure in the financial perspective. Here Parliament must outline the approach required for the most consistent possible attempt to limit expenditure on new buildings in Luxembourg. Finally, as regards the European Parliament, the Council accepted our preliminary draft estimates in line with the gentlemen's agreement. By the same token, it also accepted the estimates for the Ombudsman, through a broad interpretation of the agreement which has essentially created a distortion between the criteria for examining the Ombudsman's estimates and those applicable to the other institutions and associated bodies. In this context, I wish to stress that the Ombudsman is an autonomous institution: our earlier debate on amending the Financial Regulation confirmed that. This means there must be a specific section in the budget, and it lies outside the percentage of 20 % of the administrative costs which relates only to the European Parliament; it means there should be a dual reading of the budget. Moreover, the approach taken by the Council does not take account of what has already been decided here about the increase in the Ombudsman's staff. This decision remains our point of departure for assessing whether a further increase is needed - respecting the procedures always adopted by the budgetary authority and certainly not equal to the increase proposed by the Council at first reading. Ruttenstorfer Mr President, ladies and gentlemen, I have listened with great attention to the views expressed by previous speakers and, in my capacity as chairman of the Budget Council, I have also taken note of what has been said. I can assure you that I will endeavour to bring your suggestions to bear in the Council's further deliberations. I noted, in particular, that you agree with me that in the case of agriculture we should wait for the letter of amendment. I also noted that you consider it appropriate to provide a reserve in the agricultural budget. Obviously, I have also taken note of your misgivings about funds being withdrawn from the Leonardo programme. It should be said that with the funds allocated for 1999, the Council has actually utilised all of the budget for the whole period. But I willingly admit that there has indeed been a sharp reduction on the previous year and that Leonardo is a successful programme. In this context, I can tell you that the Council is currently examining a draft decision to set up a second phase of the Leonardo programme to run from 2000 to 2004, with a considerable increase in funding. As regards PHARE, the Council recognises the difficulties involved in implementing the PHARE programme and is, like Parliament, keen to see it managed efficiently. Hence the Council's wish to see a speedy conclusion to the seventh series of amendments to the Financial Regulation, since they contain, in particular, new rules on the utilisation of commitment appropriations, namely that a deadline will be set for the use of these appropriations. We would expect to see improvements in the PHARE programme as a result. I have also noted the importance you attach to resolving the research funding issue. I can only assure you that the Austrian Presidency is making every effort to settle the issue of the fifth framework programme in good time, first and foremost for the sake of research, but of course also in time to draw up the 1999 budget. Finally, I have noted the calls for a staffing policy not only for the Council, but also in more general terms, and I will try to bring these considerations to bear in further Council discussions. I should like to conclude by once more highlighting the very good level of cooperation that we have enjoyed with the European Parliament thus far in the budget procedure, and at the same time express the wish that this will be continued in the future. President Thank you, Mr President-in-Office. Legal bases and implementation of the budget President The next item is the report (A4-0296/98) by Mr Christodoulou, on behalf of the Committee on Budgets, on the proposal for an interinstitutional agreement between the European Parliament, Council and Commission on legal bases and implementation of the budget. Christodoulou Mr President, this is not the first time the issue of legal bases has preoccupied the European Parliament and the European Union's institutions more generally. If I remember rightly, we have been in a state of relative disagreement since 1981, and now at last, after so many years, we have reached a conclusion for which congratulations are due to all those who have collaborated to achieve it. Let me remind you that in a resolution we adopted on 12 December 1995, we called for a provisional solution to the issue of
{'language': 'en'}