asked the Minister for Foreign Affairs the action the Council of Foreign Ministers have taken to ensure adequate Community financial resources for the current year.
Ceisteanna—Questions. Oral Answers. - EC Financial Resources.
4.
It is the EC Commission which has the right of initiative to make proposals in the budgetary area, and, subsequent to the last Foreign Affairs Council in May, the Commission submitted proposals in regard to the Community budget for the current year and for 1987. These proposals have not yet been discussed by the Council.
The Commission has proposed a supplementary budget for the current year which, if adopted, would have the effect of using all the resources available within the 1.4 per cent ceiling of VAT returns which member states make over to the Community in order to finance the budget. This proposed supplementary budget is under consideration by the member states and will be discussed in detail by the Budget Council when it meets next month.
Would the Minister give us his view on the school of thought that maintains that the EC will be out of money by September next if he is satisfied that the proposal submitted by the Commission on the budget last May will not be discussed until next month and if that is leaving sufficient time to save a very embarrassing situation for the Community as a whole?
The proposal for the Commission, who are the initiating body, only came in after the last Foreign Affairs Council budgetary meeting. Although my reply says next month, this matter will be considered by the Budgetary Council this month. I do not accept, without having examined the figures in detail, that the Community will be out of funds by September, as the Deputy says. The supplementary budget being proposed by the Commission for 1986 is relatively modest and will be within the 1.4 per cent ceiling. What is of more concern is the position for the year after. I gather that the year 1986-87 can be facilitated within the 1.4 per cent but 1988 is a very different matter. Unless there is agreement to raise the ceiling from 1.4 per cent to 1.6 per cent, the Community will be in trouble in 1988.
I find it very hard to take seriously what the Minister says having regard to the fact that informed opinion agrees unanimously that the 1.4 per cent ceiling on VAT will not be sufficient for 1986. Would the Minister not agree that there is room for great concern at present because of the shortfall of cash that will emerge and that the Commission, the heads of State and the Council of Foreign Ministers have been doing nothing about it? Would the Minister turn his mind back to the time when we discussed in this House the question of the admission of Spain and Portugal to the Community. At that time we, on this side of the House, urged that appropriate steps should have been taken to ensure that there would be sufficient finances to maintain and improve the different schemes in operation within the Community.
We put forward the case very strongly that 1.4 per cent was not sufficient given the demands for new policies, the joining of Spain and Portugal to the Community and the number of other existing policies which cost more than was originally thought. At the time we said that the ceiling should be 2 per cent but that was not agreed to. The figure of 1.4 per cent was agreed. The budget for 1986 plus the supplementary budget for 1986 and 1987 can, according to the Commission, be contained within the 1.4 per cent ceiling. We may argue whether or not those budgets are large enough. I agree with the Deputy that they are probably not large enough. We would argue for more but they can be contained within the 1.4 per cent ceiling.
Would the Minister not agree that because of the obstinacy of member states, in particular the United Kingdom and Germany, the EC are not able to increase the limit from 1.4 per cent to 1.6 per cent or 2 per cent and that because of this downright obstinate opposition to an increase in the VAT levels the Commission are being forced to tailor make their policies and programmes to suit a budget which is not sufficient?
I have no problem in agreeing that a number of countries in the EC are not willing to lift the ceiling above the 1.4 per cent. Ireland and a number of other countries proposed that that ceiling should be 2 per cent. We could not get agreement on that. We could only get agreement on the 1.4 per cent. I agree that the budgets put forward have to be within that limit. The budget put forward for 1986 is below that. The 1987 budget will tip that ceiling. The problem is not in regard to these two years because budgets that are adequate for the Community can be drawn up and will come within the 1.4 per cent ceiling. In 1988 they cannot be drawn up. That is the real problem.