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The Governments  of  the  Member  States  and the  European  Commission  were
represented as follows:

Belgium:
Mr Herman VAN ROMPUY          Deputy  Prime  Minister and  Minister  for  the
                              Budget

Denmark:
Mr Jørgen ØRSTRØM MØLLER      State Secretary for Foreign Affairs

Germany:
Mr Jürgen STARK               State Secretary for Finance

Greece:
Mr  Ioannis KOUSSOULAKOS      General Secretary, Ministry of Finance

Spain:
Mr Francisco Javier ELORZA    Ambassador, Permanent Representative

France:
Mr Pierre de BOISSIEU         Ambassador, Permanent Representative

Ireland:
Mr Hugh COVENEY               Minister  of   State  at   the  Department   of
                              Finance,   with   special   responsibility  for
                              public expenditure

Italy:
Mr Luigi GUIDOBONO CAVALCHINI Ambassador, Permanent Representative

Luxembourg:
Mr Marc FISCHBACH             Minister for the Budget

Netherlands:
Mr Michiel PATIJN             State Secretary for Foreign Affairs

Austria:
Mr Manfred SCHEICH            Ambassador, Permanent Representative

Portugal:
Mr António Carlos dos SANTOS  State Secretary for Tax Affairs

Finland:
Mr Raimo SAILAS               State Secretary for Finance

Sweden:
Mr Peter LAGERBLAD            State Secretary for Finance

United Kingdom:
Mr Stephen WALL               Ambassador, Permanent Representative

Commission:
Mr Erkki LIIKANEN             Member

CONTINUATION OF THE 1997 BUDGETARY PROCEDURE

1.    Before commencing  its second  reading of  the draft  1997 budget,  the
      Council met a European Parliament delegation led by Ms FONTAINE,  Vice-
      President of the European Parliament, and comprising:

    -   Mr TILLICH, First Vice-Chairman of the Committee on Budgets,
    -   Mr  WILLOCKX, Third Vice-Chairman of the Committee on Budgets,
    -   Mr    BRINKHORST,   Rapporteur  for  the  1997  budget  ("Commission"
        section),
    -   Mr   FABRA  VALLES,  Rapporteur for  the other  sections of  the 1997
        budget,
    -   Mr  CHRISTODOULOU,  Mr  COLOM  i  NAVAL,  Mr ELLES,  Ms  GHILARDOTTI,
        Mr GIANSILY, Ms HAUG,  Ms MÜLLER, Ms THEATO,  Mr WILSON and  Mr WYNN,
        members of the Committee on Budgets.

  During the meeting  the European Parliament  representatives explained  the
  general approach followed by Parliament  in its first reading of  the draft
  1997 budget,  detailing  the  main  amendments  and  proposed modifications
  adopted by it on 24 October 1996.

  During  the debate that followed both sides  noted first of all that the EP
  votes concerning heading 1  (Agriculture) and the Structural  Funds were in
  line  with  the  outcome  of  the  conciliation  on  25 July 1996, i.e.  in
  particular  the ECU 1 000 million reduction  in agricultural appropriations
  on  the Commission's  preliminary  draft budget  and  the ECU 1 000 million
  reduction made by  the Council on  first reading in payment  appropriations
  for the Structural Funds.

  The  Council welcomed the  fact that the  budget discipline  objective of a
  zero growth budget in relation to the 1996 budget had thus been upheld.

  Discussions then concentrated on the following questions:

  -   salaries and amounts  of the appropriations intended in  particular for
      trans-European   networks,   research   and   the   peace  process   in
      Northern Ireland; this  question  covered  to  a large  extent  the  EP
      amendment  creating  for   those  objectives   a  "reserve  for   Union
      priorities" consisting  of  ECU 300 million  not  specifically  entered
      under headings 2 (Structural action) and 3 (Internal policies);

  -   the  "legal bases"  question  (arrangements for  implementing  the rule
      that  all expenditure  must  in  principle  have a  legal  basis,  with
      possible exceptions being defined);

  -   information  procedure for  fisheries  agreements in  the  event of  an
      overshoot  of  the   appropriations  for  those   agreements  following
      Commission  negotiations  with third  countries  in the  course  of the
      year;

  -   letter of amendment  No 2 - and possibility of including that letter in
      the  ongoing  budget  procedure  -  submitted   by  the  Commission  on
      7 November 1996  and aimed at  incorporating in the  budget the effects
      of the decision taken by the Agriculture Council on 30 October 1996  to
      assign  an extra  ECU 500 million  to  direct  support  for  producers'
      incomes or for the  beef and veal sector.  The  letter provides for the
      addition,  under  the  heading  covering  agricultural expenditure,  of
      ECU 442 million  (still   available)  to  carry  out   the  Agriculture
      Council's plan.  The Commission intends  to make up the missing ECU  58
      million as soon  as resources  become available  in the  course of  the
      financial year.

  The  two arms of the  budgetary authority discussed   the "legal bases" and
  "fisheries  agreements" questions  in  great detail,  but  failed to  reach
  common conclusions at this stage.

2.  The  Council then  went  on to  adopt  the draft  1997  budget on  second
    reading,   taking   position   on  all   the   amendments   and  proposed
    modifications  adopted  by the  EP  on first  reading.   In  the  main it
    followed the Permanent Representatives Committee's recommendations.

    Regarding  the questions discussed  with the  EP the  Council decided, in
    the  case  of  heading 2,  to  reinstate  ECU 100 million  in  commitment
    appropriations  under  the   heading  covering  the   peace  process   in
    Northern Ireland, and to  include an ECU 100 million negative reserve for
    Community initiatives.   It further decided  to place in the  reserve, in
    commitment appropriations,  ECU 74 million and  100 million for  research
    and trans-European networks  respectively; these entries  are matched  by
    payment appropriations to the amount of 50%.

    As regards the  "legal bases" and  "fisheries agreements" questions,  the
    Council agreed that  the Presidency should  continue trying to seek  with
    the EP solutions acceptable to both sides.

    Lastly, the Council  approved letter of amendment No 2 with  one change -
    submitted at the meeting by  the Commission - involving the inclusion  of
    an extra  ECU 2O million appropriation  to finance  campaigns to  promote
    beef consumption, which is offset by reductions under other headings.

    During their meeting the two arms of  the budgetary authority agreed that
    this change  enabled the letter of amendment to be adopted after a single
    reading,  and thus to be included in  the EP's second reading of the 1997
    general budget.

Expenditure agreed by the Council  at the close of its second  reading of the
1997 draft budget totals (in millions of ecus, round figures) 

Commitment appropriations   (c/a)          88 759,46

Payment appropriations      (p/a)          81 877,54
of which:
compulsory expenditure:     c/a            42 773,27
                            p/a            42 918,77

non-compulsory expenditure:   c/a          45 986,19
                              p/a          38 958,77

The  appropriations  break  down  as  follows  (in  millions  of ecus,  round
figures): [1] 

                    Differences from 1996 (in %)

                              c/a        c/p         c/a       c/p

Common agricultural policy    40 805,00  40 805,00   -0,06%    -0,06%
Structural action             31 477,00  26 300,00     8,05%    2,12%
Internal policies             5 462,32    4 983,51      2,59%    -0,97%
External measures            5 400,10     4 173,99      2,65%    -2,75%
Administrative expenditure:   4 245,04    4 245,04       1,47%      1,47%
-   Commission                2 759,89    2 759,89
-   Other Institutions       1 485,15     1 485,15
Monetary reserve               500,00        500,00
Guarantee reserve              329,00        329,00
Emergency aid reserve          329,00        329,00
Compensation                   212,00        212,00

MISCELLANEOUS DECISIONS

(Adopted without discussion.  In the case of legislative acts,  votes against
or  abstentions  are  indicated.   Decisions  involving  statements  that the
Council has  decided to  make available  to  the public  are asterisked;  the
statements may be obtained from the Press Office).

TRANSPORT

Organization   of  the  inland  waterway   transport  market  and  supporting
measures*

Following the  European Parliament's  second reading,  on 17 September  1996,
the  Council formally  adopted the  "inland waterway  package", consisting of
two  amendments to  existing  Regulations (Nos 1107/70  and 1101/89)  and the
adoption of a new Directive.

The package comprises:

-    a  Directive on the organization of the inland waterway transport market
     which  provides for the  abolition by  1 January 2000 of  the systems of
     minimum compulsory tariffs and the "rotation" system;

-    a  Regulation amending Regulation No 1107/70 on the granting of aids for
     certain  inland waterway  transport infrastructure;  the  proposal would
     allow  a system of national  aid to support  investment in certain types
     of   inland   waterway   infrastructure   to    be   implemented   until
     31 December 1999;

-    a  proposal  for   a  Regulation  amending   Regulation  No 1101/89   on
     structural  improvements in inland waterway  transport, allowing for the
     possibility of Community part-financing for national scrapping funds.

The  aim  of  the  "inland waterway  package"  is  to  deal  with  structural
overcapacity and  the consequences  of abolishing  compulsory tariffs,  which
have led to a fall in transport prices.  It thus provides for:

-    gradual liberalization  of the  inland  waterway market  covered by  the
     rotation system, and

-    supporting  measures   including  scrapping   operations  and  aid   for
     investment in inland waterway terminals.

It  should be  noted that  on 25 October 1996  the Council  adopted  a common
position  with a  view  to adopting  another Regulation  amending  Regulation
(EEC)  No 1107/70.    The purpose  of  that amendment  is  to extend  for two
further  years (1996  and 1997)  the  aid granted  on a  temporary  basis for
combined transport.

TRANSPARENCY

Public access to documents

The Council  agreed on the reply to  be given to an  application from Mr Tony
Bunyan for  Council documents, with  the Danish, Irish, Netherlands,  Swedish
and  United Kingdom  delegations voting against.   The following explanations
of vote were given:

Statement by the Swedish and United Kingdom delegations:

"The  Swedish and United  Kingdom delegations  cannot endorse  the content of
the reply.  They disagree with  the interpretation given to the terms "repeat
application"  and "very large documents" contained in Article 3(2) of Council
Decision 93/731/EC.

On  an overall assessment  of the  circumstances of  the case  they therefore
cast a negative vote.

They  request  that the  result  of  the  vote  and this  statement  be  made
public.";

Statement  by the  Austrian,  Belgian, French,  German,  Italian, Luxembourg,
Portuguese and Spanish delegations:

"The  Austrian, Belgian, French, German,  Italian, Luxembourg, Portuguese and
Spanish delegations support the draft reply  and the interpretation contained
therein of the concept of "repeat applications" and "very large documents".

They  consider that the  applications by  Mr Bunyan  are repeat applications,
that they  are contrary  to the  spirit of the  1993 decision  and that  they
abuse the good faith of the Council in its willingness to be transparent.  

They  accordingly consider the reply  to be "fair" within  the meaning of the
1993 decision."

[1]  Annexed hereto is a table  showing a breakdown of 1997 total expenditure
     by financial perspective heading.

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