The Commission has made no secret of the fact that the 2004 Budget, characterised by very low payment appropriations amounting to 0.98% of gross national income (GNI), is due to the fact that effective spending in the new Member States will be very low over the first year of enlargement, given the progressive increase in structural and agricultural payments. On the basis of its Annual Policy Strategy, the Commission is by contrast anticipating a much more difficult year in 2005 on the budgetary level, particularly as technical adjustment of the financial perspectives has automatically resulted in a lowering of available ceilings under Heading 3 (Internal policies), 4 (External actions) and 5 (Administration). The Council "takes note" of this technical adjustment but nevertheless states that it continues to attach "great importance" to the maintenance of "sufficient margins under ceilings for the various Headings in order to be in a position to deal with any unexpected developments". This starting point augurs ill for the Commission's intention to propose mobilising the flexibility instrument to finance the reconstruction of Iraq.

Regarding Heading 1, (Agriculture), the Council invites the Commission in its Preliminary Draft Budget expected on April 28 to present "realistic estimates". The draft EcoFin Council Conclusions notably emphasise the importance of guaranteeing the accuracy of payment appropriations. Regarding Heading 2 (Structural...

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