A qualified majority is purported to exist on a slightly increased 2001 draft budget of Euro 95.8 billion in commitment appropriations (+2.8%) and 92.5 in payment appropriations (+3.5%). Spending would represent 1.05% of European Union GDP, compared with 1.07% in the Commission proposal (PDB2001 - see European Report No 2499). Only Germany is likely to oppose the compromise reached by the Committee of Member States' Permanent Representatives to the EU (COREPER), on the grounds that insufficient the cuts have been made to agricultural and structural expenditure (see last issue of European Report). The discussions with Parliament will focus on Heading 4 and Heading 3. Regarding external actions, the Cobu delegation, defending the Resolution adopted in plenary session on 5 July will emphasise the notion of a revision of the FP at least for 2001, if not to 2006 as proposed by the Commission. In addition, Budget Committee representatives are certain to challenge the reallocation proposed and should maintain the Euro 814 million proposed in the PDB for the Western Balkans, which the Council intends to prune back to 614 million.Failing a revision of the FP, Parliament is inclined to draw in part on the funds set aside for international fisheries agreements (about Euro 275 million), suggesting recourse at a later date to the Flexibility Instrument if needs become pressing in this area towards the end of the year. Finally in respect of Heading 4, MEPs will air their concerns over the new method for funding EU Special Envoys and will demand more information. Regarding Internal Policies, a dialogue should...

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