IS THE EU STIFLING PROJECTS OF DEMOCRATISATION?

After Brussels' Blocking of Budgetary Lines

AIM Sarajevo, 13 July, 1998

Almost one billion German marks intended for the financing of various projects from the budget of the European Union have been "frozen" after the decision of the European Court of Justice (ECJ) of Luxembourg dated 12 May this year, because they have no adequate "legal basis".

Following this decision by the European Court of Justice, the European Commission reached a decision on 10 June to examine all existing budgetary lines and suspend all of those which do not have a proper legal basis.

The consequence of this decision has been to cause general chaos. Dozens of projects of different non-governmental organisations whose funding comes almost entirely from the budget of the EU are faced with total uncertainty and possible disaster.

It all began in 1995 when money was allocated from the budget of the EU for a project seeking to socially reintegrate prostitutes from Vienna and Bilbao. For the then conservative government of Great Britain this was "the last straw", so it lodged a complaint at the European Court of Justice demanding to know on what legal basis this grant had been decided. The complaint by Great Britain was later supported by Germany, Denmark and the Council of Ministers. The change of government in Britain did not lead to the withdrawal of the appeal as many had hoped for, so the Court continued work until it reached the decision.

At stake is a dispute between the Council of Ministers and the European Parliament which has lasted ever since 1982 concerning the "budgetary authority" of the Parliament and the procedure for establishing legal bases for budget lines. For many years the Parliament has regularly adopted innovative new budget lines in many fields which the European Commission has then put into operation, without the existence of a "legal basis, by allocating grants to numerous projects. They have included the PHARE and TACIS Democracy programme set up a few years ago, enabling the European Union to provide financial support to human rights, democratisation and independent media projects throughout central and eastern Europe, including former Yugoslavia. The process to establish a legal basis for this programme, which is now called "European Initiatives in Favour of Democracy and Protection of Human Rights" was started in July 1995, but has not been completed yet.

The ECJ has now ruled that the Commission may no longer allocate grants under budget lines created by the Parliament if no "legal basis" exists. This involves a legal and administrative framework which has to be agreed by the Council of Ministers and the European Parliament. The problem is that the process of establishing such a "legal basis" can take several years.

Following the ECJ ruling, the European Commission has suspended all the lines which are not completely "covered" by this legal procedure. As a result, general confusion has reigned in Brussels for weeks. This crisis has caused severe difficulties for many officials of the Commission who have worked for years in the framework of the budget lines now suspended. They are now obliged to explain to projects that they may not receive the expected funds as soon as planned or perhaps at all. The Commission has, however, announced that all contracts which have already been signed will be respected and the payments made.

The court decision has also affected the activities of many non-governmental organisations in developing countries which were in this way deprived of almost 400 million marks, but also support to handicapped persons and other socially vulnerable categories in the countries of the EU.

Among the suspended budgetary lines is also the one through which the operation of CAFAO in B&H is financed. Countless independent media and democracy projects throughout former Yugoslavia are under threat, precisely at a crucial time of reconstruction in B&H and of growing tensions in the southern Balkans. This is highly embarrassing for the European Union.

"It is a fact that this problem exists and that it affects not only B&H but also numerous other countries. It is a much broader problem and it can be resolved only between the European Parliament, the Council of Ministers and the European Commission in Brussels. This does not affect the aid of the European Commission amounting to 190 million ecus for B&H in 1998 through the reconstruction program because it has a clear legal basis. Most of our aid to B&H will be directed through this program", says Ivo Ilic Gabara, advisor for media in the Office of the European Commission in Sarajevo.

"If a solution is not found soon, hundreds of programs dealing with protection of human rights in Nigeria, medical and legal assistance to victims of torture in Turkey, prevention of violence against women, rehabilitation of homeless children in Latin America, independent monitoring of human rights in Kosovo, and many other activities of non-governmental organisations will be put down", warn in their joint appeal dated 22 June representatives of Amnesty International, International Federation for Human Rights, Human Rights' Watch and World Organisation against Torture.

Aidan White, Secretary General of the International Federation of Journalists, also warns against possible consequences, and in a statement for the public dated 12 June, predicts that the result of this decision could be "undermining efforts to bring peace and stable and sustainable development to crisis-stricken regions, both in Europe and world-wide".

In Brussels, intense attempts are being made to find a compromise solution, that is to implement the court decision and meet the demand for a legal basis, but also to continue financing the projects which would simply die out without the financial aid of the EU.

It is hoped to do this by redirecting the money from the suspended budgetary lines into other lines whose formal and legal status is unquestionable. This possibility will be used to pursue the funding of the CAFAO mission in B&H, as well as for the support of media and democratisation projects on the territory of former Yugoslavia.

A final solution should be found on 17 July by representatives of the European Parliament, the Council of Ministers and the European Commission. It is expected that the newly-created chaos will accelerate the procedure of establishing a legal basis for budget lines which has up to now taken an exceptionally long time.

"We are working hurriedly and jointly on overcoming the current situation. Nevertheless, at this moment, one cannot be sure about actual time limits which will be more certain after the meeting scheduled for 17 July", states Eila Nevalainen, spokesman of member of the European Commission Erkki Liikanen.

When one bears in mind the traditional "thoroughness" of European bureaucracy, it is not unjustified to fear for the future of many of the affected projects. Many Western European NGOs and institutions have strongly protested and the European Parliament has threatened to block the entire 1999 EU budget if a satisfactory long-term solution is not found. This will above all depend on the willingness of the Council of Ministers to find a way to enable the European Parliament to maintain its right to create innovative budget lines which can be rapidly put into operation. It must act also quickly to deblock the suspended budget lines thanks to an accelerated procedure for establishing legal bases. What is fundamentally at stake is the capacity of the EU to react quickly and efficiently in a manner befitting the world's largest economic group and its high political ambitions.

They are hoping in Brussels that before August, when the holiday season begins, they will succeed in finding adequate solutions which would enable a way out from the existing "stale-mate" position. Optimists from the EU think that a solution enabling the deblocking of the frozen 1998 budget lines could be found in the beginning of autumn. Pessimists, however, do not think that it will be possible to disentangle this knot before spring next year.

It is not difficult to imagine what that would mean for projects financed from suspended budget lines. A few months for negotiations by the European Commission, Parliament and Council of Ministers is perhaps a short time, but for all those who depend on this money it is equal to eternity. If no adequate solution is found on 17 July, the EU could soon take this issue off its agenda, because in the meantime, the affected projects will die out on their own due to lack of money.

Drazen SIMIC

(AIM, Sarajevo)