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AGENDA 2000: PARLIAMENT STAGES PUBLIC HEARING ON OWN RESOURCES SYSTEM.

Summary: The European Parliament's Committee on Budgets staged a public hearing on November 23 on the future of the EU's own resources system, attended by experts and national MPs. This issue, a cornerstone of the negotiations on Agenda 2000, was the subject of a European Commission report presented on October 7 (see European Report No 2349 for further details)

Summing up the proceedings, the rapporteur, Jutta Haug (PES, Germany) pointed out that the criticism levelled at the current system had so far not led to an overall strategic rethink on the future of the EU's resources. To have a system which was fair to all and in which the principle of Community solidarity was still accepted, the rebate granted to the United Kingdom since the Fontainebleau Summit would have to be phased out, and co-financing with the Member States of a revamped common agricultural policy introduced. However, Mrs Haug insisted that "co-financing does not mean renationalisation". She acknowledged that this issue is still as controversial within Parliament as it is among the Member States. Nevertheless, it should be possible to "envisage a form of co-financing that takes account of the different prosperity levels of the Member States, with higher co-financing contribution rates by the richer Member States and lower rates for the less prosperous ones".

Mrs Haug agreed with the experts that, for the present, using the GNP resource method to determine the level of the Member States' contributions remains the "least worst" solution, even though it does not guarantee the EU an independent source of funding. The Directorate-General for Budgets (DG XIX) is actively considering the future of the VAT resource. Alternative sources of revenue such as corporation tax, a carbon/energy tax or seigniorage (a tax on profits from assets held by the European Central Bank) may be considered in future. However, any solution would have to be "legitimate" in the taxpayers' eyes. Speed is therefore of the essence if an agreement on the financing of the EU is to be reached before March.

Winding up the hearing, Detlev Samland (PES, Germany) agreed with the experts that the tasks facing the EU Budget would have to be determined before expenditure levels could be set. He acknowledged that "the EU's own resources system is illogical, but indicated that the Community has managed to progress so far by small steps and despite illogical decisions". He concurred with Budget Commissioner Erkki Liikanen that the EU's future system of budget resources should embody the principles not only of budgetary rigour, but also of fairness, clarity, simplicity and transparency. He also emphasised the importance of ensuring that measures involving EU funds should clearly contribute "added value" over and above the input of the Member States. He hoped that a solution to the EU's funding arrangements would be found by March 1999, "a solution which would be unsatisfactory to all but in which the dissatisfaction would be equally spread".

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Publication:European Report
Date:Dec 2, 1998
Words:485
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