HL Deb 22 November 1989 vol 513 cc134-5WA
Lord Thomas of Gwydir

asked Her Majesty's Government:

What was the outcome of the recent meeting of the European Community's Budget Council.

The Paymaster General (The Earl of Caithness)

The Council considered the European Parliament's amendments and modifications to the 1990 draft budget established on 28th July (cols. 1014–5 of theOfficial Report for 18th October); and the second amending letter to the 1990 preliminary draft budget (PDB). The Council agreed to a revised draft budget totalling 48,416 mecu in commitments and 44,668 mecu in payments.

The main issue was Community aid to assist the economic restructuring of Poland and Hungary. The Council endorsed the aid package of 200 mecu which the Commission proposed in the first letter of amendment to the 1990 PDB and which the Economic and Finance Council established on 9th October; and agreed to provide a further 100 mecu by means of a supplementary budget early next year following the necessary revision of the relevant ceiling in the financial perspective under the terms of Article 12 of the inter-institutional agreement (IIA).

As regards other non-compulsory expenditure, the Council accepted amendments totalling 219 mecu in commitments and 96 mecu in payments (around one third and one quarter respectively of the increases proposed by the Parliament at its first reading on 26th October). Only a small part of the agreed amendments was for privileged expenditure (the structural funds, the R&D framework programme and the integrated Mediterranean programmes). The bulk was for non-privileged expenditure. The growth of this expenditure in the revised draft budget, by comparison with 1988, is 5.2 per cent. in commitments and 5.1 per cent. in payments, some way below the calculated maximum rate of 6.1 per cent. communicated by the Commission at the beginning of the budget procedure.

In the second amending letter to the 1990 PDB the Commission proposed a reduction in the required revenue of 837 mecu. This was to take account of agricultural underspending in 1989 resulting from movements in the dollar/ecu exchange rate and occasioning a transfer of appropriations into the monetary reserve. The Council unanimously took the view that the letter should also include a reasonable estimate of agricultural underspending stemming from factors other than exchange rate movements. The Commission was unwilling to adjust the letter in line with the Council's wishes and the Council therefore made an adjustment on its own authority, increasing the figure in the letter by 1,000 mecu.

Overall, the revised draft budget is around 4,500 mecu below the global ceiling in the financial perspective.

The Council also agreed the basis on which it would enter into a process of co-decision with the European Parliament under Article 203(9) of the Treaty to agree the overall growth of non-compulsory expenditure at the time of the Parliament's Second Reading in the week beginning 11th December.