Joint Committee on the Secondary Legislation of the European Communities debate -
Wednesday, 7 May 1975

Budgetary Powers of the European Parliament.

Chairman

We have a quorum and it is proposed now to get on with the agenda. We have an apology for inability to attend the meeting from Senator Lenihan. The Finance Bill is before the Seanad and he is engaged there. There are apologies also from Deputy Collins and Senators Fitzgerald and Killilea.

The first item for your consideration is the Chairman's "Draft Report on the Budgetary Powers of the European Parliament", a copy of which was circulated to each member on 21st April. This draft report was prepared on the basis of views expressed by the Economic and Social Sub-Committee. That committee considered the matter at two meetings—one on 13th March and one on 16th April. It was suggested that, if any member wished to submit amendments, they should be sent in by Monday, 5th May. No amendments were received and I now propose that the draft report be considered. I take it there is no objection to that and we will now proceed to consider the draft report.

Agreed.

Chairman

The best approach is to go through it seriatim. The first portion—Section A—is introductory. It is largely informative. I take it it is agreed.

Paragraphs 1, 2 and 3 agreed to.

Chairman

We move on then to Section B which is again almost entirely informative. It outlines the manner in which the budget is dealt with by the different Community institutions and how it is composed. I take it Section B is adopted.

Paragraphs 4 to 8, inclusive, agreed to.

Chairman

We come then to Section C. It is the nub of the report. It deals with the powers of the European Parliament in relation to the budget and, as you can see, these powers are operative in regard to two types of expenditure, obligatory and non-obligatory, and the report sets out in (a) and (b) what kind of expenditure is involved in regard to both types.

Deputy James Gibbons

I think it is a matter of some concern for this country in the operation and financing of the common agricultural policy.

Chairman

That comes up later on.

Deputy James Gibbons

I thought it came under obligatory expenditure.

Chairman

Specific comments come up later on.

Senator Robinson

Should we refer under this section on the present budgetary powers of Parliament to the current difficulties in relation to the regional development fund? Part of our function is to inform the Oireachtas. In the earlier introductory part of this report we do not analyse the problems faced by the European Parliament.

Chairman

We mention later on that the regional development fund should be treated as non-obligatory expenditure.

Senator Robinson

I think the present dispute is causing a great deal of confusion here. The European Parliament's row is with the Council of Ministers and is delaying a final decision on the regional development fund. One function of this report is to inform Members of both Houses of the Oireachtas and the public in general about the powers of the European Parliament.

Chairman

Perhaps Deputy Gibbons's point is relevant if we put in here that FEOGA is an instance of obligatory expenditure and the social fund is an instance of non-obligatory expenditure.

Paragraph 9 amended by the insertion before the penultimate sub-paragraph of the following new sub-paragraph:—

"The Social Fund was classified by the Commission as non-obligatory and accepted by the Council as such because the total expenditure from the Fund has not been limited by Regulation and can therefore be regarded as not necessarily resulting from an act adopted in accordance with the EEC Treaty. The European Parliament sought to have the Regional Development Fund put into this category also but the Council has been insisting that because the proposed expenditure for the next three years has been fixed by Regulation it must be treated as obligatory at least in that period."

Paragraph 9, as amended, agreed to.

Paragraph 10 agreed to.

Chairman

Section D deals with the proposed strengthening of the budgetary powers of the European Parliament. I think we might go through this in detail. The introduction is explanatory and paragraph 11 deals with the modifications to obligatory expenditure.

Deputy James Gibbons

The same problem arises. While it might be possible to maintain the operation of the two sections of the Guidance Fund as obligatory, I do not think it would be desirable from our point of view to have the actual sums provided controlled by the Parliament. I am mainly concerned about the guaranteed section and the guidance section. In the long term it is likely that the pressure on the intervention resources of the Community will lessen in the expectation of the increased demand for food and the expressed intention that we should guarantee more and more for Third World requirements.

Chairman

I think that is a very valid point. It is, in fact, adverted to later and I think, perhaps, we could discuss it more fully in a later section of the report. May I point out that there is a typing error in the first line of paragraph 11? The word "non-obligatory" should read "obligatory".

Senator Robinson

In the sub-committee, when we were discussing the proposal for strengthening the powers of the Parliament, I expressed the view that these were minor but I think on reflection—this is implied in the report—that they are quite substantial powers for Parliament in relation to budgeting. This is one of the difficulties for a country like Ireland. There is a paradox here because in this country we are in favour of democracy, in favour of a Parliament exercising power but the reality is that as a country we might be less protected in the Parliament than in the Council of Ministers.

Chairman

The net issue in paragraph 11, of course, is a reversal of the present position, modifications proposed by the Parliament, within the overall limit stand unless the Council direct otherwise. But it is the other way around at present.

Paragraph 11 agreed to.

Chairman

Paragraph 12 incorporates a power of some importance.

Paragraph 12 agreed to.

Chairman

Paragraph 13 deals with the establishment of a Court of Auditors. Later on we refer to that specifically also. At this stage the important point to note about the court is that it consists of nine members, appointed by the Council, acting unanimously after consultation with the Parliament.

Do any of our Parliamentarians wish to comment on that?

Senator Robinson

I notice that the title is "Courts of Auditors", whereas I imagine what is envisaged is a Court of Auditors, singular. I think it is one court of auditors.

Chairman

Yes, "Court" singular.

Paragraph 13 agreed to.

Deputy James Gibbons

On paragraph 14, in the developments as they are foreshadowed, it must be anticipated that there will be some diminution of the powers of the Commission as against those of the Parliament, on the one hand, and the Council on the other. It would appear that the proposal, as it stands, is reasonable in that light. But I think we would need to examine it a little further to ascertain whether or not there would be any adverse implications to ascertain whether or not the Commission might be used as a buffer between the Parliament and ourselves in the case of any adverse decisions by the Parliament.

Deputy Esmonde

Is Deputy Gibbons suggesting that this might be taking from the overall duty of the Commissioners, the policemen of the Treaty's provisions? Is that what the Deputy is afraid of?

Deputy James Gibbons

The Commission's role is likely to be diminished by these new proposals. Their role will become more a Civil Service one as we know it in this country. It amounts to this. If in the case of obligatory expenditure, we can rely absolutely on the protection of the Council of Ministers, then it is all right but if we cannot, it is quite a different story.

Chairman

I took it that what we were discussing here was really a formality, with the Parliament giving a formal discharge that the budget had been implemented. It would be of the same nature as what our Comptroller and Auditor General does here. Is that not all that is involved here?

Senator Robinson

I think so; it is a formal function.

Paragraph 14 agreed to.

Chairman

Then we shall proceed to paragraph 15—Establishment of a Conciliation Procedure. This is a very important development.

Deputy Esmonde

I take it this is in relation only to new steps being taken?

Chairman

No, I think it is a new procedure which comes into operation in the event of a dispute between the Council and the Parliament. As I understand it, such a conciliation situation has arisen at present. Perhaps Deputy Gibbons or Deputy Nolan could tell us about this. Has not such a procedure been invoked?

Deputy James Gibbons

Yes, about the regional fund and, as far as I know, it has not been resolved yet. I do not know what is the next move.

Chairman

At least it is a step forward that conciliation procedure can now be invoked where there is a dispute between the Parliament and the Council.

Deputy Esmonde

I take it that is the meaning. It is not required by virtue of Acts already in existence, like the regional fund where the Acts do not already exist.

Deputy Staunton

This is an essential mechanism.

Chairman

It is very essential. Later on in the report we express approval.

Paragraph 15 agreed to.

Chairman

We shall move on to Section E—Conclusions of Joint Committee—which is the really important section of the report. This section has been formulated on the basis of the views expressed at the sub-committee. I think we should go through it very carefully.

Deputy Esmonde

What is behind the statement in the second sentence reading:

However, it has no objection in principle to ultimate Executive control over the limit of expenditure.

Chairman

I would think, apart from anything else, that would be very much in line with our own Parliamentary procedures. It is the Executive who can decide the level. Parliament cannot increase the total level of expenditure insofar as it is the Executive that has to raise the taxation and the necessary finance.

Deputy Esmonde

By the "Executive" do you mean the Council of Ministers?

Chairman

Yes. I think the report is really seeking to take a middle line here which is a reasonable compromise between the necessity for ultimate Executive control over the total amount of expenditure and, at the same time, the necessity to bring Parliament more closely into the procedure.

Senator Robinson

All the same, I think it would be possible to strengthen the first sentence where we seem to be, to say the least of it, taking a middle line. It reads:

In general the Joint Committee welcomes moves to extend the powers of the European Parliament especially as there are prospects of early direct elections to that body.

We should use this argument to reinforce the reasons for having direct elections and a direct relationship with the citizens of the Community. The strengthening of the budgetary powers of Parliament is closely related to the question of a directly elected Parliament. I think we should rephrase that, for example, and say: the Joint Committee welcomes moves to extend the powers of the European Parliament which reinforces the necessity for implementing proposals for direct elections to that body. I think we should strengthen that.

Deputy Staunton

I think that is what, in effect, that sentence says. I find it acceptable.

Senator Robinson

It says there are prospects of early direct elections to that body but we are not committing ourselves to being in favour of their implementation.

Deputy Esmonde

I think that comes under another heading.

Chairman

We are coming on to another report in favour of direct elections.

Senator Robinson

Yes. But the point I am making is that the strengthening of the powers of the European Parliament is a very substantial argument for, if anything, advancing the date of direct elections. It is not a welcome prospect that the European Parliament exercise more power but still be indirectly elected and operating under the handicaps of a dual mandate and so on.

Chairman

To some extent it is a chicken and egg situation. We want to move on to direct elections and to more budgetary control. Both are interdependent or mutually dependent to some extent.

Deputy Staunton

I think it is a case of twins rather than a chicken and egg situation.

Chairman

I have no great pride in the particular metaphor I used.

Senator Robinson

It reinforces the argument for direct election to the Parliament and we should say that. This would tie in with the report we are bringing in on direct elections. We should not just note that there are prospects of direct elections. We should say that proposals to strengthen the powers of the European Parliament constitutes a strong argument for making rapid progress on direct elections.

Chairman

Both are equally desirable and endorsing; the one should facilitate and encourage us in moving towards the other.

Senator Robinson

And moving towards strengthening the Parliament without moving towards direct elections is not welcome because the European Parliament at the moment does not have a direct mandate. They are equally desirable and very closely linked.

Chairman

I agree.

Deputy Seán Flanagan

Later there is mention of new types of Community expenditure:

As new types of Community expenditure which could properly be regarded as not necessarily resulting from Treaty obligations . . .

Senator Robinson

An example would be an environmental policy: there is no very direct Treaty authority for that but Article 235 is being used to evolve substantial proposals at Community level for combatting environmental problems.

Chairman

With a re-phrasing of the opening sentence of paragraph 16, is the paragraph acceptable?

Paragraph 16 amended by the deletion of the first sentence and the substitution of the following:—

"In general the Joint Committee welcomes moves to extend the budgetary powers of the European Parliament and views these developments as reinforcing the case for early direct elections to that body."

Paragraph 16, as amended, agreed to.

Paragraph 17 gives Deputy Gibbons scope for expressing his view here.

Deputy James Gibbons

I am concerned in this. Under direct elections the consumer representation in the Parliament right across the board of political groups—Socialists, Christian Democrats, et cetera—with some exceptions, gives a very strong voice and they are demanding the supply of food to the Community as cheaply as possible. We are the main beef exporting country in the Nine; the country which supplies by far the greatest portion of its total output of animal products especially to the Community and we have a particular concern in this. While we do not want to put on the backs of consumers a load that would be intolerable and would have a diminishing return effect, we do want to ensure that the guarantees provided are available to the maximum extent to this country for the reason I have just stated—the big proportion of our exports—and, secondly, because of the relative poverty of this country in comparison with the others. For those reasons we would need to rely on the ultimate safeguard at present in the Council of Ministers of our Minister armed with an eventual weapon—I select the atom bomb as the metaphor—that could not be resorted to very frequently, but as an ultimate protection against the exploitation of the Irish. As a beef producing race they would need this protection.

In regard to the social needs, the regional fund and other funds, I would think it would be to our advantage that these are expenditures that can be controlled by the Parliament itself. That is my anxiety.

Chairman

I certainly agree and I think that view is fairly well set out in paragraph 17.

Deputy Staunton

I would strongly support the view expressed by Deputy Gibbons. It is an extremely important point. It may be a chauvinistic approach, protecting the interests of this country as against the other European countries, but in our own interests the ultimate power should continue to reside in the Council rather than the Parliament and, if you look at paragraph 17, there is too much ambiguity in the first sentence which reads:

The Joint Committee is in favour of the ultimate control of obligatory expenditure remaining with the Council at least at the present stage of development of the Communities.

I would prefer to drop the latter part of the sentence from "at least at the present stage of development of the Communities". It suggests ambiguity and uncertainty and, in our interests, it should be omitted. The sentence should end at "remaining with the Council".

Deputy Nolan

I agree. We should end that first sentence with the word "Council" and delete the remainder of it. The remainder only weakens the sentence.

Chairman

I do not feel very strongly about it. I would have thought there might be situations arising in future when we might be prepared to dispense with the final control of the Council over the obligatory expenditure but I am quite satisfied to delete the offending words.

Deputy Esmonde

The offending words underline the importance of the situation.

Chairman

I do not think they either add or subtract so we can hopefully delete them.

Deputy James Gibbons

I would say, while it is not totally chauvinistic, I would accept our function here is to consider the Irish point of view and I think we are acting within the general intention of the Treaty of Rome and in the condition that we are working towards the full development of the agricultural potential of the country. If we had the efficiency of the Dutch or the Danes, we would be obliged to accept constraints with our rising prosperity but we have not got that. The role we want to play is that of a large efficient food supplier to the rest of the Community. We cannot play that role in our present stage of development. We cannot hope to play that role unless we get the special protection we are looking for in paragraph 17.

Senator Robinson

There may be a danger in this rather selective approach to what we consider to be the proper exercise of power by the European Parliament. We could get into a blind alley where we maintain that the Parliament should not be allowed scope to review expenditure in the area of the common agricultural policy but we are in favour of it excessing power over the social fund and the regional fund. As the Community develops, we could be very isolated adopting this stand. Secondly, we should be prepared to concede the consumer's desire for cheaper food and use the regional policy to strengthen our own position and our own agricultural policy. We would do much better to broaden the scope of the regional policy and to make it more flexible in supplementing the common agricultural policy.

Deputy James Gibbons

There is need to have a scale of enlightenment.

Senator Robinson

Yes.

Deputy Staunton

We are filling in the background so far as the agricultural policy is concerned. As a producing country, we are well aware of the agricultural policy. Here we are simply concerned with the phraseology in this sentence.

Chairman

I think we can delete the words objected to. The rest of the paragraph strikes a true balance between our chauvinistic national interest and the need to promote the European ideal and have Parliament develop and increase its powers in this very important area of the budget. The paragraph strikes a reasonable balance between the two, not necessarily totally conflicting ideas, but to some extent conflicting. On the one hand, we would like to think that in the case of the obligatory expenditure the Council have the final and ultimate authority, whereas Parliament is given the important powers even in relation to this obligatory expenditure. I believe we succeed in the paragraph in meeting those two requirements, where the ultimate authority is retained by the Council and at the same time we welcome the increase in the powers of Parliament in this area.

Paragraph 17 amended by the deletion of "at least at the present stage of the developments of the Communities" in the first sentence.

Paragraph 17, as amended, agreed to.

Chairman

In paragraph 18 we comment on the power of the Parliament to reject the budget as a whole. It could be regarded as a somewhat academic power. On the other hand, it certainly can be a very real and very important power. The final sentence of the paragraph says:

Nevertheless, as a reserve power it is an important one which should increase Parliament's influence in the budgetary sphere and the Joint Committee supports the proposal.

Paragraph 18 agreed to.

Chairman

Now we come to paragraph 19 which deals with non-obligatory expenditure and here a couple of points arise. There is the social fund and more immediate the question of the regional development fund.

Senator Robinson

In this paragraph we approve of the fact that Parliament can amend the non-obligatory expenditure and that the social fund has been classified as non-obligatory. I would have thought it would have brought the point home more sharply if what actually happened in the European Parliament last year in relation to the social fund was used in that they voted, in effect, to be more generous than the Council of Ministers. This is a power which has already been exercised by the Parliament and it has had a significant impact.

Chairman

I see the Senator's point. It might well be mentioned there what happened in relation to the social fund during the year. Would the Committee agree that we might consider making some reference here to this if we find it necessary?

Deputy James Gibbons

It is important to underline the fact that the Parliament, as it now stands, was faced with this decision which was to our advantage.

Deputy Seán Flanagan

What are the mechanics of reclassifying?

Chairman

Perhaps from now on most new expenditure will automatically be classified as non-obligatory. The regional fund could be regarded as non-obligatory because it does not emanate from any particular Treaty provision.

Senator Robinson

It is not yet accepted that it is non-obligatory. That is what the row is about.

Deputy Esmonde

Is there any ceiling on the amount of the non-obligatory fund that might have implications in respect of any money available for the regional fund?

Chairman

Yes.

Deputy Esmonde

Does it limit the amount of money available for the regional fund?

Chairman

No, but it has the effect that by putting it into the non-obligatory category it gives Parliament power to increase the amount.

Deputy Esmonde

By much?

Chairman

Within limits. It could be 10 per cent. At least it has that unqualified power to increase it if it is in the non-obligatory category.

Deputy Esmonde

I would not like to see any undue limitation on the amount of the regional fund.

Chairman

By putting it into the non-obligatory category you are not putting any limitation on it that would not be on it in the obligatory category. Subject to that, we definitely support Parliament wholeheartedly on putting the regional development fund into the non-obligatory category.

Deputy Esmonde

Is there any provision for a supplementary budget?

Deputy James Gibbons

There is.

Deputy Esmonde

I take it that the budget we are talking about for one year covers supplementary budgets as well.

Chairman

Everything here applies to the budget. It is reassuring to know that the counterpart in Brussels of the Department of Finance are not any more accurate in forecasting than we are.

Deputy James Gibbons

I seem to recall that there was a supplementary budget last year for something or other. I forget what it was for.

Chairman

Of course there are two types of supplementary budget. There is the supplementary budget which arises because the expenditure on some particular voted heading is more than anticipated. Then there is the supplementary budget which arises because the Government decide to embark on some entirely new item. It all amounts to the taxpayer paying more.

Paragraph 19 agreed to.

Chairman

Now we come to paragraph 20. We support the new conciliation procedure, the establishment of a court of auditors and the proposed conferring of power on Parliament to give a discharge to the Commission in the implementation of the budget.

Senator Eoin Ryan

What exactly does "discharge" mean?

Chairman

My view is that it is a formality.

Senator Eoin Ryan

Can they go ahead and spend it?

Chairman

No. They spend it correctly. It is like the Comptroller and Auditor General here. In effect, the Parliament say to the Commission or to the Council: "We present you with the budget. You got certain money to meet the cost of that budget and we certify that you have used the money you were given correctly for the budgetary purposes for which you sought it".

Senator Eoin Ryan

It is like the report of the Comptroller and Auditor General?

Chairman

Yes.

Paragraph 20 agreed to.

Chairman

I now put it to the Committee that the draft report, as amended, be the report of the Committee, and that it be presented to both Houses of the Oireachtas.

Senator Robinson

One general conclusion implicit from the discussions we have had is that if the European Parliament does exercise these powers it will be able to exercise very real influence in this country, especially in relation to the social fund, the regional development fund and, potentially, in relation to the common agricultural policy. It reinforces the arguments that the people who go from Ireland as Members of the European Parliament need to be very well briefed, need to be there for vital votes, for vital committee meetings and should not be in the intolerable position of having clashes between their national Parliaments through trying to exercise the dual mandate. That is why I think we must link this in with the need for very swift progress on direct elections, because the people who go need to be there in Ireland's interests, need to be very well briefed and need to do their job properly. What will be decided there could be as important as anything that might be happening here.

Draft report, as amended agreed to.

Ordered: To report accordingly.