I would be pleased to adopt that procedure because it fits better our terms of reference. It would achieve the objective which I sought in tabling this motion. My motion responds directly to Deputy Flanagan's point. One of the important discussions we had in Brussels was a meeting with the Budget Commissioner, Mr. Tugendhat, in the course of which he referred to the question of the future financing of the Community. We have, as our Chairman said, reported on that in our forty-seventh report. We reported on the Commission's alerting the Community to the fact that the present financing is based basically on a decision in 1970 relating to own resources and that these resources come from the common customs tariff, the agricultural levies and from a yield from a rate of VAT, which comes into operation in 1980, up to a ceiling of 1 per cent.
In a debate in the European Parliament on 20 July last, Commissioner Tugendhat, referred to the fact that this was a 1970 decision up to a maximum of 1 per cent of VAT and then said:
Even so, the decision sets a limit to the amount of the Community's revenue, and in no abstract fashion. This year, the Community has a rate of VAT of 0.74%. Consequently only 14.9% of the total resources potentially available to the Community actually remain unspent: only 14.9% of what is actually remaining to the Community is not yet, in one way or another, committed. The prospect of exhaustion of Community revenue is therefore something which is now very imminent, and the timing of this exhaustion is a point to which I will shortly revert.
What is being calculated is that without any further expansion of Community expenditure this 14.9 per cent will be exhausted by 1981 by the natural increase, for example, in agricultural expenditure. The effect of this will be that the agricultural spending will hit the ceiling and there will be less than there has been in the past for the regional and social funds and other things. That is the nature of the financial crisis.
In a sense the Committee when compiling its forty-seventh report was aware of the problems but nobody was raising it to the level of political attention it deserved. Commissioner Tugendhat did it in the European Parliament. He did it even more forcefully in the private discussions with us because he made it clear that in order to increase the financing for 1981 one had to start next spring. In order to start next spring one has got to get a political decision to start next spring. The Commission would have to make proposals on the basis of an enlarged budget, whether it is an increase in VAT or from some other source.
At present it looks as though that political decision will not be there, the Germans and the British are not favourably disposed. The purpose of this motion was to have the Joint Committee call attention to the serious crisis and seek a debate in both Houses on the absolute necessity for an increase in the budget of the Community which can come as a result of a decision to be taken next spring for an enlarged budget in 1981. Otherwise, agricultural financing will absorb what is left of the potential resources and there will have to be less for regional and social expenditure. There is no good in our looking for a better regional policy if there is no money there to allocate and indeed if the squeeze is on at that stage.
That is why I am very happy to accept the line of procedure the Chairman proposes, that we this evening report as it were, on the financial situation arising from our own homework, which we did in the forty-seventh report, in our private discussions with Tugendhat, and now the recent statement by Commissioner Gundelach which again calls attention to the crisis. Ireland at present is in the driving seat, we hold the Presidency until the end of December. If both Houses of the Oireachtas were to debate this as an urgent Irish problem, as it is an urgent European problem, and seek that this be a political priority during the European Council Meeting in November and that a political decision be taken—a commitment to increasing the budget of the European Communities so that there can continue to be support for the common agricultural policy, possibly with movement toward reform in areas where there is a positive need for reform—that is certainly open to discussion together with the development of the regional and social policy. If things go on as they are at present the crunch will come in 1981 in no uncertain terms and this country will suffer more than any other country. I would be very happy if we could report on that and call, in our report, for an urgent debate in both Houses.