BUDGET: PARLIAMENT FIRST READING OF 2005 BUDGET SETS AGENDA FOR CONFLICTS.

On general payment appropriations in the Budget, the Parliament wants a more generous approach. The Council has put in the lowest bid so far: its own Draft Budget in July proposed Euro 4 billion less than the Commission's Preliminary Draft. In particular, the Parliament wants more money for Structural Measures, to match Member States' increasing ability to make good use of the money available.

The Resolution adopted by the Parliament urges the EU to "provide the necessary budgetary means to meet its stated ambitions" - including implementation of the Lisbon Strategy, boosting sustainable growth and employment, enhancing co-operation on asylum and immigration policies, improving information targeted at the European public by the EU (particularly in the wake of the abstention levels in the EP elections in the new Member States, and in advance of the ratification campaign for the Treaty), and strengthening cohesion and external policies.

There is strong emphasis on justice and home affairs particularly for the fight against terrorism (Parliament wants to double the Euro 1 million for last year's pilot project to pool anti-terrorism experience) and increased security, "to meet citizens' concerns", according to rapporteur Salvador Garriga Polledo (EPP-ED, Spain). Extra funding is needed for rural development, in particular to support young farmers. The budget proposal foresees a further Euro 90 million for rural development and to assist co-operation in rural areas

Insufficient margins in the internal policies heading have also driven the Parliament to demand additional funding so that decentralised EU agencies can do their job. These agencies have multiplied (from seven to 23) since 1999, when the current financing framework was fixed, jeopardising funding for other key areas. Parliament is urging a separate agreement with Council to meet these unforeseen demands.

The dispute over Iraq spending arises from the EU promise to contribute Euro 1 billion over five years at the Donors' Conference in 2003. MEPs want funding for reconstruction in Iraq to be found by using the Euro 190 million available in the EU Budget's flexibility instrument, rather than through the external action heading in the Budget. The Council preference is to cut existing budget headings and increase margins for spending such as on Iraq - to avoid using the flexibility instrument.

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The Report on the Draft General Budget of the European Union for the financial year 2005 is...