25 – 26 November: Budget Council

Date: 02/12/1999

TALKS between budget ministers on the Union's spending plans for 2000 lasted until the early hours of Friday morning, as member states wrangled over the proposals. But ministers refused to bow to the European Parliament's demands that the overall budget should be increased to cover the costs of reconstruction in Kosovo. Instead, they provided €360 million by shifting funds from other foreign policy programmes. Ministers originally aimed to earmark €500 million for the province for next year alone, but decided to spread the expenditure over two years in light of new information suggesting that Kosovo's needs will be lower than expected in 2000.

MINISTERS agreed to raise the €360 million for Kosovo reconstruction in 2000 by transferring €30 million of unspent funds from the EU's OBNOVA aid programme for 1999, €60 million from the 2000 OBNOVA budget and €50 million from the humanitarian aid budget. They agreed to raise the remaining €220 million by moving €180 million from other external relations projects and cutting expenditure on foreign affairs programmes across the board to provide a further €40 million. As an alternative, ministers said some of the money could be found by using funds in the h200-million 'flexibility instrument'. Officials said the key to the entire package would be how much of the €220 million MEPs were prepared to fund from the flexibility reserve.

MEPS attacked the deal and indicated they would continue to demand an overall budget increase to pay for the unforeseen expense of Kosovo when they hold their final vote on the package on 16 December. German centre-right MEP Reimer Böge described the 'conciliation' meeting between the Parliament and ministers aimed at finding a compromise as “a failure”, but indicated that MEPs could agree to use the flexibility clause.