Budget Council (Hansard, 24 November 1978)

§ Mr. Joel Barnett

The budget Council considered the amendments and proposed modifications of the European Parliament to the 1979 draft Community budget established by the Council in July and amended by the Letter of Amendment. The draft budget, as amended, provided for commitment appropriations of approximately 13,948 million European units of account (MEUA)—£8,786 million—and payment appropriations of 13,175 MEUA—£8,299 million. The amendments and proposed modifications, approved by the Parliament on 25th October, sought to make certain changes in budget nomeclature and to increase commitment appropriations by approximately 2,272 MEUA—£1,431 million—and payment appropriations by 847 MEUA—£534 million.

In accordance with the qualified majority voting rules provided for in article 203 of the Treaty of Rome, as amended, the Council accepted increases to the draft budget totalling 629 MEUA—£396 million—in commitment appropriations and 322 MEUA—£203 million—in payment appropriations.

The main amendments and modifications adopted by the Parliament related to agricultural guidance and fisheries, the social fund, the regional development fund, food aid, aid to non-associated developing countries, the presentation of borrowing and lending operations, a global operational reserve and a special reserve relating to enlargement.

The Council rejected or modified most of the Parliament's proposals, although 789W the House will be pleased to learn that the Parliament's amendment to increase aid to non-associates was accepted. As a result, commitment appropriations for this purpose have been increased by 50 MEUA—£31.5 million—to 133.62 MEUA—£84 million—and payment appropriations by 10.62 MEUA—£6.7 million—to 55.62 MEUA—£35 million.

On the social fund, the Council agreed to increase commitment appropriations by 65 MEUA—£41 million—of which 42 MEUA—£26.5 million—was entered in chapter 100. This latter element included an additional 32 MEUA for youth aid in chapter 53.

On the regional development fund, the Parliament proposed increases totalling 480 MEUA—£302 million—on commitments and 233 MEUA—£147 million—on payments. Some member States were opposed to any increase in the commitment provision decided in July because this would lead to breaching the maximum rate of increase applicable to non-obligatory expenditure.

In order to prevent an increase in commitment appropriations above the prescribed maximum rate of increase applicable to non-obligatory expenditure, one member State sought to block any increase for the RDF by invoking the "Luxembourg compromise". This permits a member State to insist on unanimity on proposals of fundamental national importance. I said that I noted this use of the Luxembourg compromise in the context of the budget and would be considering its implications for the budget in future.

I suggested a compromise proposal which took account of both the European Council's resolution at Bremen on resource transfers to the less prosperous member States and its decision last December on the size of RDF. Since there was a qualified majority neither to reject the Parliament's amendments nor to accept my compromise proposal, the increases proposed by the Parliament were accepted, but opposition to exceeding the maximum rate was maintained by some member States.

It is, therefore, probable that the level of commitment appropriations in 1979 for the RDF, with the appropriate implications for the maximum rate, will need to be discussed at the European Council, 790W before a joint decision on the maximum rate can be taken by the Council and the Parliament before adoption by the Parliament of the budget on 14th December.