THE PRESS WEDNESDAY, OCTOBER 3, 1979. E.E.C. Budget challenge

Press, 3 October 1979, Page 18

THE PRESS WEDNESDAY, OCTOBER 3, 1979. E.E.C. Budget challenge

The European Parliament, elected directly for the first time this year, is showing signs of asserting itself. Some members of the Parliament think that the European Economic Community's Budget needs revamping and they are saying so. The European Parliament has no more powers now than it had when it was composed of members serving their own national Parliaments and representing their countries and parties in the European Parliament; the only change is that its moral authority may be enhanced because the members have been directly elected and because they will feel the need to be more directly responsive to electors. This is a time when it will be seen whether the Parliament becomes a rubber stamp for the European Commission or the Council of Ministers. The assembly has begun, in truly Parliamentary fashion, with a fight about money. The outcome of the fight will reveal a great deal about the future relationship of the directly elected European Parliament to the other Community institutions. The European Parliament may direct that the Budget spend more on certain things: it may reject the whole Budget; and to a limited extent it may reallocate expenditure proposed in the Budget. It may also censure the European Commission, which would amount to a dismissal of the Commission. The complaint about the 1980 Budget seems mostly to be that so much is to be spent on agriculture (about three-quarters of the Budget) and that not enough is left over for spending on other areas, such as energy, unemployment. regional, and social development. The Council of Agriculture Ministers has had much of its own way in the past in providing farmers with farmsupport prices under the Common Agriculture Policy; the challenge by the Parliament to the Ministers’ spending will be w’atched with considerable interest in many parts of the world, and very keenly in Wellington and in London. As a member of the European Economic Community Britain has a direct interest in how money is collected by the Cornmunity and in how it is spent. Two of the three sources of money for financing the Budget—customs duties on external trade, and agricultural levies on farm imports—hit Britain badly. Britain is by far the biggest importer in the Community and thereby contributes hugely to the

Budget. It will do so more next year because the transitional arrangements made for Britain's joining come to an end in December of this year Britain will then be the biggest single contributor to the Budget, yet it is the third poorest member. The British Government will have to be determined to find a remedy for this anomaly. Several remedies might be consulted: but the one wanted most by Britain is a reform of the C.A.P. In this the interests of Britain and New Zealand coincide. New Zealand, too, would like to see changes in the system by which the production of dairy products is increased and consumption is decreased because of the high prices. Yet it might be unduly optimistic to believe that the C.A.P. is going to be changed in such a way as to be of great benefit to New Zealand. The E.E.C. is unlikely to change the way that it finances its Budget, and more especially when a crisis looms because of restrictions on the third source of revenue—value added tax. Britain is likely to continue to be penalised for importing large quantities of farm produce from New Zealand. Britain also appears to want to encourage its own agriculture and to substitute this for imports. One of the more cynical views of British policy at the moment is that it is holding the British market for New Zealand produce open for as long as it can while it builds up its own agriculture until it will need ,to import very little from anywhere. This growth of British farm production would also hit Denmark, which would like a much bigger share of the British dairy market. The most optimistic aspect for New Zealand lies in the long-term effect of reducing the surpluses of dairy products in Europe and the consequent dumping of these surpluses on third markets. However, even that optimism has to be restrained because of the European contention that several members of the E.E.C. have been traditional exporters of dairy products and consider this to be a proper activity for them. In any event, the Council of Agriculture Ministers has the power to reject Parliamentary reallocation of funds for agriculture and the Ministers have hitherto shown no haste in reforming the C.A.P. Britain’s desire to reform the C.A.P. is no guarantee of change. The main immediate hope New Zealand can take from the situation is that the E.E.C. is looking at longer-term arrangements for this country.