BUDGET: COUNCIL ADOPTS 2004 BUDGET IN FIRST READING.

Following this conciliation meeting, one of the only tangible results concerns consideration by the Commission of Parliament's priorities for Heading 1a (farm spending), notably the creation of an insurance regime for farmers in a letter of amendment at the end of the year. The Commission is also invited in the autumn to present an assessment of the financial consequences of reform of the Common Agricultural Policy.

By contrast, disagreement persists on Heading 4 (External actions): the Council, which is keen to see Common Foreign and Security Policy (CFSP) spending raised to Euro 52.6 million, was neither in a position to motivate this 8.4%increase nor to provide appropriate clarification regarding the considerable reserve (32%) set aside for these credits. Regarding the agreement of November 25, 2002 which imposes a duty on the Council to inform Parliament on CFSP actions (and their implications for the EU Budget), the Council reaffirmed its opinion that the duty of information proposed does not extend to Common Security and Defence Policy (CSDP) actions. Under these conditions, the missions in Macedonia and the Congo did not need to be notified to Parliament since, according to the Council, they were financed exclusively by the Member States and not through the EU Budget. The two parties have agreed to reassess the issue in November before the second reading of the Draft Budget. Parliament and Council have nevertheless reached agreement on mobilising the emergency aid reserve for Southern Africa and Ethiopia, channelling Euro 25 million to Southern Africa and 15 million to Ethiopia.

No agreement has yet been reached between the Institutions on Heading 5 (Administration). Parliament is keen to asses the reductions made by the Council to the posts requested by the Commission in anticipation of enlargement. Furthermore, the Council is refusing at the present juncture to agree to the frontloading of real-estate expenditure in 2004, despite the insistence of the Budget Committee and the Commission, that a sufficient margin probably exists under Heading 5 permitting such a move and warning regarding the imminence of management problems regarding the EU's real-estate portfolio. The Council believes a rigorous approach is needed and considers that a margin very close to that resulting from its first reading is likely to emerge in the end. The Council is adamant that the opportunity provided by the accession of ten new Member States should be...