Decision on urgent procedure President The next item is the vote on requests for urgent procedure pursuant to Rule 112. Proposal for a Council regulation aiming to promote the conversion of vessels and fishermen that were, up to 1999, dependent on the fishing agreement with Maroc [COM(2001) 384 - C5-0407/2001 - 2001/0163 (CNS)] Varela Suanzes-Carpegna Mr President, ladies and gentlemen, last night the Committee on Fisheries approved the report by our colleague, Mrs Miguélez Ramos, on the restructuring of the Community fisheries sector affected by the non-renewal of the fisheries agreement with Morocco. I would like to say to the House that this report is restricted to regulating the technical aspects relating to the social measures aimed at the many people affected; it is a very sensitive issue from a social, and therefore political, point of view, in the Member States affected by this restructuring. Therefore, Mr President, ladies and gentlemen, I am in a position to ask the House to vote in favour of this request for an urgent procedure presented by the Council, so that this proposal can be debated in Council by the Fisheries Ministers at their meeting called for the 27 November. Wynn Mr President, the Committee on Budgets is sympathetic to the needs of our friends in the Committee on Fisheries. However, a conciliation meeting will be taking place on 21 November and it is not yet agreed between the different institutions how the agreement will be finalised, or indeed in what category it will be finalised. In the light of a decision by the Budgets Council last week, there is a great deal of confusion on our side as to how we are going to deal with this. I would ask that we do not treat this as urgent and that it be held over until after the conciliation meeting of 21 November. McKenna Mr President, I wish to support Mr Wynn. I am glad to see that the Committee on Budgets is taking a responsible approach to this issue because the idea of pushing it through as urgent procedure without debate is unacceptable. We have to be very careful about how we use European taxpayers' money and we need to look to the future. A number of years ago in this Parliament it was already being said that Morocco would not agree to another agreement with the EU. We knew that then and we should have prepared for it. This situation is not unique, it is going to happen again. At the moment we are discussing a major agreement with Mauritania. The day will come when Mauritania will say to the EU that it no longer wants such an agreement. What are we going to do then? We really need to address this issue, firstly, in relation to how we arrange our common fisheries policy and, secondly, in relation to how we use public money. The way this has been rushed through is unacceptable. This is not a matter for urgent procedure because we have known for many years that this problem was coming. We need to be extremely careful about how we use European taxpayers' money. I understand the problems the fishing community has, but we need to be more responsible. Garriga Polledo Mr President, I would simply like to say that the Committee on Budgets has taken no decision in this field. There are plenty of Members, particularly from my group, in the Committee on Budgets who believe that the urgent procedure is perfectly appropriate. We understand the reasons that the Chairman of the Committee on Fisheries has been able to give. We believe that, in this case, a legal basis is necessary and, in any event, from the budgetary point of view, if it is necessary to amend that basis as a result of the negotiation with the Council on the 21 November, it could be done without any problem. I therefore do not believe that this Parliament' s position would be damaged by accepting the urgent procedure today and voting on the Miguélez Ramos report, which, furthermore, relates much more to the technical issues in the Commission' s proposal with regard to the restructuring of the fleet than to actual budgetary motivations, which will be the subject of another report. Schreyer Mr President, the situation is well known. It has not been possible to renew the fishing agreement with Morocco, so the fishing sector in Spain and to some extent in Portugal is now in a difficult position. The Commission has also responded to the Council's request with the proposal for a restructuring programme, and I can tell you once again that we are not talking about the fishing agreement with Mauritania, but about a restructuring programme for the Spanish fleet and also for a part of the Portuguese fleet. We are talking about paying scrapping premiums. We are talking about social measures. I think it is right for us to say that we will separate the budgetary issue from the legal basis, but the Commission is asking for the legal basis for this restructuring programme to be dealt with quickly. That is why we support the request for urgent procedure. (Parliament agreed to urgent procedure) Proposal for a European Parliament and Council decision on the European Community contribution to the "Global Fund to fight HIV/AIDS, tuberculosis and malaria" [COM(2001) 612 - C5-0520/2001 - 2001/0251] Corrie Mr President, I oppose urgency on a matter of principle, not on a matter of substance. I am sure we all support a global health fund and President Prodi guaranteed EUR 120 million at the G8 meeting in July. However, I and many others are extremely disappointed that the Commission has taken until November to come forward with any effective suggestions and now it is asking for urgency, effectively denying the Council and Parliament any time to debate or amend this proposal. It looks as if we are just going to hand over a cheque and that will be the end of it. The Commission is also suggesting the funding should be found by taking EUR 60 million from a fishing agreement and EUR 60 million from the EDF. In its resolution in this House on 25 October this House emphasised that contributions should be new and additional funding, and this is not so. At the moment it looks as if it is a one-off payment. I would like to hear the Commission guarantee that a legal base will be found for the sustainable funding of the global health fund after 2000 and submitted as quickly as possible. I would like an assurance that it will be new money and that Parliament and the Council will be kept fully informed and involved, so that we play a legislative part in this process. We, as parliamentarians, cannot be treated in this way. Wynn Mr President, there is no point in talking about old money or new money when there is no money! If we do not get agreement on this matter this year with urgent procedure, there will be no money next year for the Global Health Fund. I know there are problems about getting EUR 60 million from the EDF but, quite frankly, that is another argument. If we want EUR 60 million from the general budget, we have to agree to using urgent procedure on this or there will be no money for the Global Health Fund. Schreyer This financing issue is indeed directly linked with the subject we were discussing just now. EUR 50 million will be made available from appropriations that were previously earmarked for fishing agreements. It is quite evident that this is additional money that was not available beforehand for other external actions. A further EUR 10 million will be made available from two budget lines with which there have also been implementation difficulties up to now, that is to say the budget lines for Latin America and for Asia. The money will be implemented here in a concrete way, and there are promising signs that the extra EUR 60 million can be provided from the EDF. I believe that it really would be a good sign if the European Union could make an early decision on implementing these financial appropriations. As you know, the donors to the global health fund have promised over USD 1.8 billion, but so far those are just promises. The European Union would be the first to make a concrete decision on financing. I therefore ask you to vote for this request for urgent procedure. We need a legal basis for making a transfer to the global health fund. This House will naturally be kept informed at all stages. We will, of course, come back to this several times during the overall budget process. But if the legal basis could be rapidly decided upon now, and it would be a good legal basis that would enable us to make the transfer, then we would not need to explore any other avenues, because the budget situation would be very clear. So I ask you to vote for the request for urgent procedure. Fernández Martín Mr President, on behalf of the Committee on Development and Cooperation, I would like to say that we are against recourse to the urgent procedure, for fundamental and for procedural reasons. The facts are as follows: the Commission has proposed a contribution of EUR 60 million to the Global Fund to fight AIDS/HIV, tuberculosis and malaria. We are not against this proposal, but we do not believe that this can be a single contribution, made just once, if this objective is to be fulfilled. We are arguing for a solid and sustained contribution, not just for one year. This is why we do not agree with the urgent procedure; we intend to present amendments, which is our right in accordance with the codecision procedure applicable in this field. The Commission, in asking for the urgent procedure, is doing so in a way which is unacceptable to Parliament, since it deprives us of this essential and irrevocable right. The Commission announced its contribution to this fund in July; it told us about it some months ago and it announced it publicly in Genoa more than three months ago; and now it wants Parliament to express its opinion on this important issue in just one week. Corrie Mr President, on a point of order. Having heard the Commissioner and the budget spokesman, I am happy to withdraw my objection. (Parliament agreed to urgent procedure) Report on the proposal for a Council decision amending Council Decision 1999/733/EC providing supplementary macro-financial assistance to the former Yugoslav Republic of Macedonia [COM(2001) 613 - 2001/0213 (CNS)] Proposal for a Council decision amending Council Decision 1999/325/EC providing macro-financial aid to Bosnia-Herzegovina [COM(2001) 610 - C5-0558/2001 - 2001/0250(CNS)] Proposal for a Council decision amending Decision 2001/549/EC of 16 July 2001 providing macro-financial aid to the Federal Republic of Yugoslavia [COM(2001) 612 - C5-0520/2001 - 2001/0251 (COD)] Färm Mr President, as rapporteur, allow me to explain. We are talking, then, about three matters, Macedonia, Bosnia and Herzegovina, together with the Federal Republic of Yugoslavia, as discussed by the Committee on Budgets. We support the Commission' s request for urgent procedure. This is a matter of exceptional urgency, since many great needs have arisen, especially in Macedonia. We are also concerned with extending the aid to Bosnia, Herzegovina and the Federal Republic of Yugoslavia. We nevertheless need a little more time. To begin with, a proper discussion is needed in the Committee on Budgets. It is a question of transfers for this year and of budget issues for next year. We need a little time in which to obtain the opinion of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, and we need to have a discussion on the whole budget for the Balkans for 2002 in connection with the conciliation prior to the second reading of the budget next week. We therefore propose voting to apply urgent procedure but also for deciding at the same time to deal with these three matters during the November II part-session in Brussels. We should, then, be able to have a joint debate on the issues relating to the Balkans, at the same time as dealing with the Lagendijk report on the European Agency for Reconstruction. Our proposal is therefore in favour of urgent procedure but also of debating the matter during the November II part-session in Brussels. (Parliament agreed to urgent procedure) President. That concludes the vote. Presentation of the Court of Auditors' annual report - 2000 President The next item is the presentation of the Court of Auditors' annual report for the year 2000. Karlsson Mr President, on behalf of the Members of the European Court of Auditors, I would like to thank you for inviting me to present the 24th Annual Report of the Court for the 2000 financial year. As in previous years, this presentation marks the start of the discharge procedure. The report follows the format used for the past three years, with chapters covering revenue and each of the expenditure areas under the headings of the financial perspectives. There is an additional chapter this year which marks the development of the Union, which deals with pre-accession aid for which a separate financial perspective heading exists from 2000 onwards. You will also - as usual - find a chapter dedicated to the Statement of Assurance and, attached to the report, you will find the Court' s observations on the implementation of the sixth, seventh and eight European Development Funds. The different chapters of the Annual Report address four main concerns. First, there is an analysis of the budgetary implementation and of the budgetary management practices for each specific financial perspective heading. Then, you will find the follow-up of observations of the Court in previous Annual and Special Reports. Thirdly, the specific appraisal in the context of the Statement of Assurance with information per financial perspective heading. Finally, a new element this year is that the principal findings and recommendations in the Special Reports adopted by the Court since the last discharge are summarised in the chapters according to the wishes of this Parliament. This means that the Annual Report this year contains all the principal findings and recommendations concerning the implementation of the general budget and the European Development Funds that the Court has published since the last discharge. You will also find, for the first time - not in the copy of annual report that you have in your hands today, but in the Official Journal version that will come when the official version has been printed, something that Parliament has asked for many years - the text of the Court in one column and the answers of the Commission on the same page so as to make the report, at least in this respect, more user-friendly. Concerning the budget management for 2000, one particular feature of budget implementation was the emergence of a very large surplus of revenue over expenditure, amounting to EUR 11.6 billion, equivalent to more than 14 % of final payment expenditure. The main factors which led to this situation were a higher revenue yield than budgeted and - perhaps even more important - lower payments on Structural Measures, in particular those for the 2000-2006 programming period. The Court recommends that the Commission examine how it can better use the supplementary and amending budget procedure to avoid excessive budget surpluses, in order to avoid distorted revenue positions for the following year caused by the carrying over of surpluses. The Court, responding to the wishes of the discharge authority, has continued to follow up the observations in previous Annual and Special Reports. The main purpose of this is to review what action has been taken, principally by the Commission, in response to the observations of the Court, the recommendations of the Council and the resolutions of the European Parliament. In all of the subjects examined, some action has been taken. The extent and effectiveness of this action, however, vary considerably. In general, the Commission, in particular where it agreed with the earlier observations and propositions, has adopted measures designed to respond to them and to improve the situation. In some cases corrective action has been slow, in others, staff and financial resources allocated have been insufficient to achieve the desired level of improvement. Effecting improvements in the management and control of complex programmes involving many organisations at different levels is difficult and takes time. Structural rigidities have often to be overcome, and in the areas of shared or decentralised management, which account for more than 80 % of the general budget, the Commission requires action from others, such as Member States. Notwithstanding that achieving change can be difficult, the Commission should ensure that it takes all the measures within its power to implement the recommendations of the Court and of this Parliament. In early 2001, as part of its follow-up work, the Court reviewed progress in the replacement of the former anti-fraud unit (UCLAF) with the European Anti-fraud Office (OLAF). The new arrangements for OLAF provide a more appropriate administrative framework, with greater independence for the Office than its predecessor. The Court continues to work closely with OLAF. It has established formal procedures to ensure that the relations between the two organisations are efficient and effective. It has also established a constructive dialogue with the committee established to supervise the work of OLAF, under the chairmanship of Prof. Delmas-Marty. The Court has recently prepared an opinion, soon to be published, on a proposal for a directive of the European Parliament and the Council on the protection of the Community's financial interests. This directive is an important step forward in the fight against fraud. I would like to thank the chairman of the Committee on Budgetary Control, Mrs Theato, on behalf of the Court of Auditors for her impressive work and dedication over the years to make this important directive possible. With regard to the Statement of Assurance, the Court is of the opinion that the revised accounts for the financial year ended 31 December 2000 reflect reliably the Community' s revenue and expenditure for the year and the financial situation at the end of the year. As far as the legality and regularity of underlying transactions are concerned, the audit of the principal management and control systems applicable to Agriculture and Structural Measures revealed weaknesses in the functioning of control procedures aiming to secure the legality and regularity of the transactions. The audit of operational expenditure revealed an unacceptable incidence of error affecting the amount of the payments or the reality or the eligibility of the underlying transactions. In view of the results of its audit work taken together, the Court is of the opinion that the transactions underlying the financial statements are, taken as a whole, legal and regular in respect of revenue, commitments and administrative expenditure but declines to provide this assurance in respect of payments in operational expenditure. Since the last Annual Report the Court has adopted eighteen Special Reports to be taken into account in the discharge procedure, containing the results of audits which focus on a wide range of specific areas in which the Community' s financial management can be improved. The results of the Court' s audits indicate significant positive findings. In the agricultural area the reformed clearance of accounts system and the Integrated Administrative and Control System have contributed to improved management of large amounts of European Union funds. The Commission' s strategy for dealing with BSE is basically sound. With regard to Structural Measures, the URBAN Community Initiative has helped the implementation of many urban development projects and has enabled local authorities to access Union funds. In the external actions area, the work of the agency charged with the reconstruction of Kosovo, was found to be both efficient and economical. The TACIS cross-border co-operation programme is an instrument which has the potential to play a useful role in addressing issues relating to the new eastern border following the next accession. However, it was also found that major objectives have either not been achieved, or only limited progress had been made. Further, it was frequently found that there was either insufficient or no evaluation by the Commission of the achievement of the objectives. The Commission' s reform programme is increasing the focus on results and performance measurement, within a resource allocation framework reflecting predetermined priorities and defined objectives. The Court' s findings on recent programmes show that the Commission still faces major challenges in this area. One of the most important issues in the discussion that we had last year here in Parliament, when I presented the Annual Report for 1999, concerned the situation in the Member States. The results are striking. The Court has concentrated a large share of its resources on the audit of control systems in Member States as a follow up to this debate. Persistent weaknesses were found in Member States' checking of community operations concerning programmes where management is shared between the Commission and the Member States. This was the case for the Integrated Administrative and Control System (IACS). It was also the case for export refunds, and concerning the control regulation for Structural Measures. Improving the control arrangements in the Member States is central to ensuring the correct use of Union funds. It is also important if the Court is to place some reliance for its own audit purposes on the checks carried out by the various audit and supervisory services in the Commission, and in the Member States. I will come back to this specific problem at the end of my speech. The recast of the Financial Regulation, which is an important element of the Commission reform programme, maybe the first step that was taken, now seeks to clarify and strengthen the provisions relating to methods of implementation of the budget, advance payments, procurement, presentation of the accounts, and the offices. The introduction of new provisions intended to contribute to the establishment of a coherent legal framework in the field of budgetary execution, based on the primacy of the Financial Regulation, is another important improvement within the recast. However, as you will see from our Annual Report, some important matters of principle stated in the Court' s opinion on the proposed changes have not been followed, which may lead to serious complexity in financial management. Regarding enlargement, this year' s Annual Report has a new chapter dealing with pre-accession aid for which a separate financial perspective heading exists from 2000 onwards. In accordance with Parliament recommendations in its 1999 discharge resolution, the Court has been improving and intensifying the co-operation with the Supreme Audit Institutions of the candidate countries during the past few years. Furthermore, in liaison with the Supreme Audit Institutions the Court has been intensifying the exchange of information at different levels of national administrations. The setting-up of national systems of internal control and the external audit of EU funds made available to the candidate countries require closer co-operation between the institutions even before accession. Enlargement will bring about changes in the way the Council, the Commission and the Court of Justice will work. This is also true for the Court of Auditors and for Parliament. Today, no one questions the provisions of the Maastricht Treaty to make the Court of Auditors one of the five independent institutions of the Union. The Nice Treaty will mean substantial organisational changes in the near future, also for the European Court of Auditors, where the Court will have the possibility of establishing an organisational structure in chambers with a more effective decision making, even if we will then consist of 25 Member States. The Court is actively preparing itself for this challenging reform. The Court is developing its relations with the Commission' s new Internal Audit Service, with discussions covering a number of areas where we can work together. The Court is giving high priority to assessing how it will be able to use the work of the Internal Audit Service and the audit capabilities in the Directorates General. One very promising sign of progress in this field was the conference, under the challenging heading of "Verstehen" held at the initiative of the Internal Auditor, Mr Muis, on Thursday and Friday which Mrs Schreyer and Mrs Theato attended. I should like to say, as the President of the Court of Auditors, that this initiative might mean an extremely fruitful, concrete and promising step forward in the idea of a single audit system concerning European funds. The Treaty states clearly that the European Court of Auditors assists the European Parliament and the Council in exercising their powers of control over the implementation of the budget. Ladies and Gentleman, I am soon to retire as President and Member of the European Court of Auditors. During my seven years in the Court I have been privileged to contribute to the Court's growing importance, and to the continuous efforts it makes, in collaborating with Parliament and meeting its needs in optimising the assistance it provides. The Court is addressing the need in its statement of assurance methodology for more information on the nature and causes of the problems affecting the management of Community funds by broadening the range of evidence in support of its conclusions. The recent reforms in the area of financial management and internal audit will enable the Court to make greater use of the Commission' s work, not least for its work on the Statement of Assurance. The Court intends to continue to develop specific appraisals for each major area of Community activity as a complement to its Statement of Assurance. The specific appraisals are now envisaged in the Nice Treaty and are an important tool to help the discharge authority to make appropriate recommendations with a view to improving management. One of the major tasks of the enlarged European Union will be the collaboration between European and National Supreme Audit Institutions. This has long been a key preoccupation of this Parliament. But, as we all know, this co-operation has advanced slowly and Parliament has repeatedly urged the Court to improve the situation. After having followed progress for a number of years I have arrived at the conclusion that a good result in this respect requires initiatives at a higher level than purely technical co-operation between the Supreme Audit Institutions of the Member States and the European Court of Auditors. I would like to quote a Member of this Parliament, Mr Jacques Santer who pointed out, when he was President of the Commission, the importance of collaboration between the national parliaments and the European Parliament. It would also be a key factor in the field of Financial Control. The Supreme Audit Institutions act independently and have a strong collaboration with their respective national parliaments. So, collaboration between national parliaments and the European Parliament could have a major influence on national audit bodies and the European Court of Auditors, in particular in the matter of financial control. The way of intergovernmental collaboration in this field is not the most practical route to take since the Supreme Audit Institutions of the Member States are, with the exception of my own country, independent of governments, as they are controlling them. But maybe the solution can be found in increased cooperation between this Parliament and the national parliaments of the Member States. Let me finally add one little word. As parliamentarians in the European Parliament, as Commissioners in the European Commission, also as Auditors in the European Court of Auditors, we have a double role. We have to fulfil our tasks according to the Treaty; to fulfil them as Commissioners, as Parliamentarians and as Members of the Court of Auditors. But we also have another role in common. That is always to defend the idea of Europe. (Applause) Schreyer Mr President, Mr Karlsson, ladies, gentlemen, and members of the Court of Auditors, this report from the Court of Auditors on the 2000 budget year gives the Commission both encouragement and support; it is particularly supportive of the Commissioner for the Budget. Let me thank the Court of Auditors, you, Mr Karlsson and the Court's members and staff for the 2000 Report and give especial additional thanks for the special reports, whose very practical recommendations make them very valuable to the Commission in its work. I would most especially like to express my satisfaction with the Court's practical observations, and with the Court's support for two measures which are of particular concern to me. One, in the area of foreign policy, has to do with the reconstruction of Kosovo. The Court of Auditors has examined the accounting procedures and the profitability of the agency charged with the reconstruction of Kosovo and has come to a highly favourable conclusion, reporting that the agency has succeeded in achieving most of the high targets set for it, and that its administration and budget management were highly efficient economically. I had strongly urged that the 2000 Budget should make available sufficient funds for the reconstruction of Kosovo. Parliament and, in particular, Mr Bourlanges, whom I would like to mention particularly in his capacity as principal rapporteur on the 2000 Budget, were also very much behind the idea that sufficient funds should be allocated for this purpose. The good work that was done meant that funds for the agency charged with the reconstruction of Kosovo could even be increased in the course of the 2000 budget year. I am sure that Mr Bourlanges will feel, as I do, that it is quite simply very heartening when measures that one has been especially committed to get such a good report from the Court of Auditors. It goes without saying that this sends an important message to the taxpayers, that money is being invested well in Kosovo, and in an economically efficient way. I emphasise this for the additional reason that there is a very intense debate going on in the media about the common foreign and security policy, with people asking: where is the European Union? where is the Commission? Here we have a quite tangible example of a common foreign policy measure and a tangible demonstration of what a good result can be achieved if we all pull together. The second point about which I would like to speak personally, and on which I wish to express my thanks for the Court's support, is the Financial Regulation. The recast of the Financial Regulation is a highly comprehensive undertaking, on which the Court of Auditors gave its opinion in quick order and was of great help to the Commission, not only with the adoption of a formal position, but also with the many meetings on technical and administrative matters. That may perhaps sound a bit arid, but the fact is that the Financial Regulation lays down Budget procedures in exact terms, stipulating who plays what role, who possesses which supervisory powers and whether, for example, there can be rapid redeployments in the Budget, and where they can be made, in order to take account of changes during the budget year. I am very grateful to the Court of Auditors for making clear how important it is that all financial arrangements in specified sectors conform to Budget principles, or principles of sound budgeting. I am very grateful to you in this Parliament for the amendments you have proposed even before the summer recess. I can say quite unequivocally and definitely that the recast proposal gained a great deal in terms of quality as a result. For its part, the Commission has now done its homework; so too, on this point, has the Court of Auditors; and so too, to a quite broad extent in this area, has Parliament; I therefore believe it is actually high time for Parliament to formally take up its position, so that then the Council, too, can get its homework over and done with in a similarly short time. Now I also want to consider some areas in which the Court made some highly critical comments. One case in point is the way in which the Monitoring Regulation for the Structural Funds has been implemented. It is the Member States who have primary responsibility for monitoring the legality of the use to which Structural Fund resources are put. It is, however, equally true that the Commission bears overall responsibility for the implementation of the Budget and thus for checking that monitoring regulations are clearly framed and enforceable and that the state of affairs does not come to pass in which more or less any Member State can come up with its own interpretation of the monitoring regulations and act accordingly. The complaint most frequently levelled at the Structural Funds by the Member States is that the monitoring procedures are so complicated. This sometimes reaches the point where the conclusion is to say: 'In future, we will have the Structural Funds only as a sort of lump sum transfer.' The Commission, though, does not, of course, support this as the way forward, and I assume that Parliament does not support it either. For when funds go out of the European Budget, they do so in order to achieve definite objectives and not as a general settlement. It is, of course, true that, if we want things to be that way in future, we will have to work at simplifying the regulation in question. I join with the Court of Auditors in calling for a simpler scheme which, being more easily monitored, would lessen the likelihood of error. 'Complicated procedure' was also the criticism the Court of Auditors laid at the door of the Sapard programme of agricultural aid for the acceding countries. This afternoon the Commission will be debating the progress reports on the enlargement process as a whole, of which financial control is a very important part, as is the assessment of what progress has been made in the acceding states and of what problems remain to be overcome. Sapard, though, presents us with the problem of the over EUR 1 billion allocated for 2000 and 2001, of which in fact only EUR 16 million have so far been paid out. I must accept the Court of Auditors' criticism of what is, of course, a very poor result. This will also have to be discussed in the Commission, for the complicated procedure must not result in the funds ceasing to be used at all. When dealing with precise controls in the acceding states, we must, then, find a balance, but not to the detriment of implementation. Turning to the massive EUR 11.6 billion surplus in the 2000 Budget, the Court of Auditors has explained that a surplus should not be entered in the accounts for the following year, but should, if at all possible in the current budget year, allow the Member States to make reduced payments, which means that the Budget would then be adjusted downwards in the course of the year. I work on the assumption that the Council and the Finance Ministers would surely give this a favourable reception, but that there has to be more careful consideration of what is the right way forward here. Of last year's Budget surplus, over EUR 3 billion was the result of increased income, which itself was a consequence of last year's growth figures in fact turning out better than had at first been assumed. It was, though, only in November that the official figures became available. Of the surplus, several hundred million euro represent real savings in agriculture as a result of favourable market developments. I see it as a very positive thing if we do not have to spend money, but whether that is actually the case will not be definitely known until the end of the year. Those who legislated for the Structural Funds had indeed already foreseen the possible difficulties in implementing the programme in its first year, and it is for that reason that the Interinstitutional Agreement provides for the option of transferring funds to subsequent years. Let me again make it clear that I do not see it in a negative light if, at the end of the year, or, as the Court has proposed, possibly during the current year, funds can be returned to the Member States due to the money not being required. I am probably agreeing with certain comments made in this Parliament when I say that the distinction has to be drawn between the money not being needed in order to achieve a given objective, and the money not having been able to be used because of faulty budget management or shortcomings in administration. That can be properly assessed only when we are no longer talking in the Budget procedure about how much money is being invested, but rather about what objectives we want to achieve. In this context, I take on board the Court of Auditors' remarks on evaluation and on how important it is in a good Budget procedure. The Court of Auditors has confirmed the regularity of the accounts, in other words, that the books are in good order, and also of the revenue side of the Budget. It has also certified the reliability of the commitments and of the administrative outgoings. It has, however, criticised the excessive incidence of errors in cash movements. Has the Commission, then, made too few changes in 2000 in order to improve financial management? Let me, on this point, refer to the Court of Auditors' statement that, in 2000, many steps towards reform had only just started to be taken, and that they will only gradually meet with success. I cannot, at this juncture, list all the steps we have taken since then, but I will all the same highlight a few of them. One example is in the personnel field. Additions have been made to the total personnel complement for financial management, among other things by redeployment within the Commission to reinforce the financial units in the various Directorates-General, and Parliament has made additional posts available for 2001. The selection procedure for these is at present in progress, and it will result in 250 candidates being put on a list to strengthen the financial and personnel management sectors. I would like, in addition, to mention the steps we are taking in training and development. The Commission's reforms as a whole have meant that there is definitely a greater need for training. A total of 2 800 officials have already been trained in financial management by the Budget Directorate-General and another 1 700 will take part in courses of this sort in the next few months. The technical assistance offices have also come in for a lot of criticism from us in the past. There are 126 of them, and 93 will have had their contracts with us cancelled by the end of 2001. I see this as an important point; it is something that has been achieved through pressure exerted by Parliament, and we will, for example, be continuing with decentralisation in the field of foreign affairs, in order to make greater use of local knowledge in implementing budget decisions. This afternoon the Commission will be taking decisions about further new management systems and about the networking of national agencies. A few weeks ago, we adopted a comprehensive package to improve personnel policy. In the summer, I presented the report on the steps the Commission had either taken, or proposed to the legislature, to combat fraud, ranging from regulations on money laundering via customs measures through to the proposal for a European public prosecutor for financial offences. There is much to do, but much has already been achieved. The Commission is not only active in well over 100 States. It also gives aid following natural catastrophes and gives humanitarian aid in crisis areas and war zones. It is active in many traditional fields, for example in aspects of agriculture, but it also makes funds available for many innovative projects suggested by Parliament. This may sometimes involve large amounts totalling millions, but sometimes, too, relatively small sums of money. We link up researchers and the results of their investigations, share in the financing of high-speed railway lines and of student exchange schemes. This represents a truly broad spectrum of areas of expenditure, and there is nothing rigid about it. The programmes change, the tasks change and the world changes, so we are all constantly being faced with new challenges, and all the European Union's institutions have to be open to them. We want to create good European policies, which means learning from mistakes in order to make good measures even better. The reports of the Court of Auditors are a fundamental support to us in doing this. So I thank the Court, those of its members who are leaving, those who are continuing to be members of it, and most especially its President. Mr Karlsson, your presidency has seen the further development of the method for the statement of assurance, and the compilation of a very large number of special reports containing very definite and valuable recommendations. The understanding of financial management has improved under your presidency and so, I believe, has the institutions' understanding of each other. For that you have my most especial thanks. Theato chair of the Committee on Budgetary Control. (DE) Mr President, Commissioner, Mr Karlsson, today you are presenting your annual report as President of the Court of Auditors, together with those Members of the Court still in office. This is the last time you will present the report, as you are leaving office, as are a number of other Members of the Court. I would like to take this opportunity to thank you and the retiring Members of the Court both personally and on behalf of the Committee on Budgetary Control for the years of excellent and effective cooperation and mutual trust under your presidency, and also under the previous presidency of Professor Friedmann, who is also retiring. There have occasionally been differences of opinion, but I believe that we have always managed to cooperate well, and we have, above all, performed a control function that has ultimately benefited the taxpayer. So once again, many thanks. The Annual Report of the Court before us today also demonstrates that we have made some further progress. I only want to highlight a couple of points. The most striking point is the large surplus of own resources: EUR 11.6 million or over 14% of the budget has not been spent. The finance ministers are, of course, delighted, as this means that they will have to pay less to the EU next year, but we in the Committee on Budgetary Control are concerned to know which of the objectives that we have set ourselves have not been achieved. I believe that the Commission would be well advised - and I understand from the press that there will be surpluses again this year - to get to work on supplementary and rectifying budgets so that the money available is really spent on achieving objectives. The complex and cumbersome nature of the legal framework and the extent of the controls therefore involved are also a matter of concern both for the Parliament and for the Court of Auditors, and, as Commissioner Schreyer has just said, for the Commission too. We need to work to simplify things as a matter of urgency, so that the public can also obtain funding, rather than say, 'It is so complicated. I do not want any money from the European Union' . Controls need to be proportionate but also to be effective, to lead to positive outcomes and to have a preventive effect. My last point is the positive statement of assurance, the SOA. Anyone looking for concrete figures or percentages in relation to payments will be disappointed. Once again, the Court has not mentioned any concrete figures. This House had actually pressed for that. The Court now wants to bring forward a refined method of producing this positive statement of assurance. We are more than happy to cooperate on this, but we also have to look and analyse where errors are due to the Member States and where they are the Commission's responsibility. The Commission is ultimately responsible, and it must accept this responsibility. I would like to thank you once again, Mr Karlsson, for your excellent cooperation, and I would like to wish all the retiring Members and you personally all the best for the future. Morgan Mr President, I would also like to pass on my best regards to Mr Karlsson, thank him for his presentation and all the work he has done over the past few years. I hope he will pass on our thanks to his other colleagues who are also leaving. We must remember that this report is the first report which assesses the first full year of the Prodi Commission - a Commission which, let us remind ourselves, was appointed with the specific remit of radical overhaul and reform of the European Union. The question we will be asking in our discharge procedure this year is: "Is the Commission delivering on that promise?". Let us be clear. If it is not, then the credibility of both the Prodi Commission and of this Parliament is on the line. It is much too early to assess the success or failure of the Prodi Commission and of Commission reform. The only question we can ask at this point is whether we are headed in the right direction. Mr Karlsson, I noted your words last night. There are a number of hopeful signs in this report. So, where the Commission has specific responsibility, we do seem to be seeing some positive developments. As you say, the strategy on BSE is basically sound. The work of the Agency charged with the reconstruction of Kosovo was efficient and economical. The reform programme is heading in the right direction. You have approved the recasting of the financial regulation and the Commission's proposals on financial incentives for top grade officials, although I note that you have some concerns about the Commission's accounting mechanisms. Perhaps Mrs Schreyer could comment on that. We are not going to let the Commission off the hook. There is a large area where the Commission has joint responsibility with the Member States, particularly in the agricultural sector and the structural funds. The primary responsibility must lie with the Member States. They are responsible for 85% of the budget. Here we see some serious structural weaknesses. In the structural funds, we see problems in the application of regulations at every level. The CAP accounts for over 40% of the budget and where Member States are responsible there is no improvement. Heads of stock continue be overstated. We know that Belgium, Denmark, Ireland and the Netherlands have not signed the Convention on the Protection of Financial Interests. We are disappointed, Mr Karlsson, that you did not mention them by name in the report. Again the Court has failed to give a statement of assurance to the Commission. As I said last night, this is a complicated and ever-changing procedure and I do not believe the Commission will ever get a statement of assurance. So the main message, as far as I can see, is that the Commission should keep going. It is on the right track. Member States must stop hiding behind the Commission and assume their proper responsibility of protecting EU taxpayers' money. Mulder I too should like to express my appreciation for all the Members of the Court of Auditors who are departing. It is noticeable again that this year, as the Court of Auditors has already expressed in rather vague terms, there is no Statement of Assurance. The question arises as to how long this situation can continue like this. 2001 is the first year for which the current Commission shoulders all responsibility. In my opinion, there should come a day when a positive Statement of Assurance can be made. I should like to suggest that the Commission sets the year 2000 as a target date. For each year, an action plan should be drafted in which the Commission outlines its objectives. We must ensure that the necessary arrangements are then in place for certain Directorates-General, with a margin of error of, say, less than 1%. As far as the Member States are concerned, we all know that that is where the money is spent. In my view, the system we are currently using for the agricultural funds is workable: if a Member State spends certain amounts inappropriately, the Commission will need to introduce capping. I should like to see the Commission make proposals for extending this system to include other sectors of the budget, notably the Structural Funds. Staes Honourable Members of the Court of Auditors, Mr Karlsson, Mrs Schreyer, on behalf of my group, I should naturally like to echo the words of thanks which my fellow MEPs have already expressed. I have started to wade through this tome. I have to admit that this 24th Annual Report
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