The European Parliament adopted the 2009 draft budget substantially higher than that adopted by Council in its July first reading. Commitments are set at €136 bn (1.04 % of GNI), payments are €124.5 bn (equivalent of 0.959% of EU GNI). Council had adopted a draft budget of € 133.9bn in commitments and €114.9 bn in payments. With this vote, Parliament has stayed within the margins of the Financial Perspective.

Accordingly to the EU's commitments, the fight against climate change, the EU's social dimension and security questions are Parliament's priorities for 2009. External relations stay, as usual, a baffling problem because this budget heading has been under funded ever since the current financial perspective was adopted. The gap between the forecasts of financial needs ("commitments") and programmed expenditure ("payments") entered in the draft 2009 budget by the Council has never been so wide as this year. MEP believe that the Council's cuts had made it impossible to meet the EU's commitments and decided to diminish this disparity.

Climate change, Social Dimension and Security: EU priorities

The European Parliament proposed to increase by more than 2,000 M€ the cost of the actions dedicated to combating climate change.

The EP calls for the re-establishment of the figures in the PDB for CAP spending, reduced after Council's cut. Parliament is also concerned with the fall in real terms of spending on rural development, despite the need to restructure the rural economy. MEPs want to increase by over €2bn the total spending on certain budget headings for EU measures against climate change. In many cases, it means taking greater account of climate change in existing programmes, such as rural development, transport, research and the environment. For example, MEPs wish to virtually double the payments for the LIFE+ programme. MEP also call for a new budget line for climate change in Heading 2  to make the budget more transparent and comprehensible.  This would allow measures to combat climate change and the funding allocated to this area to be grouped together.  In addition to these transferred amounts, MEPs wish to allocate €20m extra to this new heading.

MEPs also propose an increase in the payments for the programme to improve the financial environment for SMEs.  In addition, they wish to launch pilot projects such as the Erasmus programme for entrepreneurs or measures to aid SMEs to seize opportunities to internationalise their activity.

The EP is seeking to expand the budget for the EU's social and employment dimension, i.e. the policy goals mainly included in Headings 1a (Competitiveness) and 1b (Cohesion). This includes the European Social Fund (which MEPs believe should get over €135m extra for convergence, employment and growth), the Regional Development Fund and the Cohesion Fund. A package of measures is targeted at small and medium-sized firms.

External Relations

The report maintains the amounts proposed by the Commission for aid to Palestine (300 M€ in commitments and 280 M€ in payments), Kosovo and Afghanistan. However, the deputies will try to allocate more money to external actions, mobilizing, for example, the mechanism of flexibility or emergency assistance. The use of these sources requires the agreement of Parliament and the Council, which addressed this issue at its meeting on November 21st.

The deputies suggested creating a separate budget line for aid to Georgia, although not designate any amount up to the Conference of Donors for this country, to be held in Brussels on October 22nd.

Frontex and the European Refugee Fund

Given the urgency of immigration matters, the Parliament proposes an increase for Frontex, the agency managing EU external borders (Frontex plus10 M€ in commitments and payments to a total of 55 M€ but 5 million are put in reserve). This extra many should be devoted to enable Frontex to sustain the comitment to permanent missions at the Southern EU borders.
 
The EP suggest as well as to increase the funds for external borders, to refugee Fund and emergency measures in the event of mass influxes of refugees.
 
MEPs consider that there is no justification for the Council's cuts in credits aiming to finance Schengen Information System (SIS II) and visas information system and propose to reinstate the PDB amounts.

EU Institutions

On the question of the posts at the Commission, for which Council had proposed a major cut, Parliament has reinstated the initial funding put forward by the Commission in its pre-draft budget. 50 M€ go in the reserve, though, which will be released if a number of conditions are fulfilled. One of these conditions features a "screening" of administrative needs to be done by the Commission as well as a redeployment plan.
 
The next key step now sees Parliament and Council engaged in the second conciliation on 21 November, aiming to strike an agreement before the second-reading.  The 2009 Budget should be approved and signed in December in Strasbourg.