EU Treaty of Lisbon: CFSP financial provisions

Why do the unsettled times between Royal prerogatives and Parliamentary appropriations described in the Diary of Samuel Pepys (1633 – 1703) come to my mind, when I look at the financial provisions for the common foreign and security policy (CFSP) and the common security and defence policy (CSDP) of the European Union (EU)?

If nothing more is sought than soothing foreign policy statements, if there is unanimity, the costs are negligible. But since the early days of European Political Cooperation (EPC) the member states have gradually started to think that they could actually have an impact in world affairs, given the means.

The Lisbon Treaty is a step in that direction, with enhanced coordination and more flexible allocation of resources. The governments and the Council remain key players, with only a light touch of democratic scrutiny by the European Parliament concerning both contents and finances.

When the Union budget is used for CFSP ends the European Parliament is only consulted. If the member states use their own resources, the EP can be side-stepped.

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The intergovernmental conference (IGC 2007) deemed it opportune to present its reforms like this (OJ 17.12.2007 C 306/31 and 32):

46) Articles 27 A to 27 E, on enhanced cooperation, shall be replaced by Article 10 in accordance with point 22 above.

47) Article 28 shall be amended as follows:

(a) paragraph 1 shall be deleted and the remaining paragraphs shall be renumbered accordingly; throughout the Article the words "budget of the European Communities" shall be replaced by "Union budget";

(b) in paragraph 2, renumbered 1, the words "which the provisions relating to the areas referred to in this Title entail" shall be replaced by "to which the implementation of this Chapter gives rise";

(c) in paragraph 3, renumbered 2, the words "the implementation of those provisions" in the first subparagraph shall be replaced by "the implementation of this Chapter";

(d) the following new paragraph 3 shall be added and paragraph 4 deleted:

"3. The Council shall adopt a decision establishing the specific procedures for guaranteeing rapid access to appropriations in the Union budget for urgent financing of initiatives in the framework of the common foreign and security policy, and in particular for preparatory activities for the tasks referred to in Article 28 A(1) and Article 28 B. It shall act after consulting the European Parliament.

Preparatory activities for the tasks referred to in Article 28 A(1) and Article 28 B which are not charged to the Union budget shall be financed by a start-up fund made up of Member States' contributions.

The Council shall adopt by a qualified majority, on a proposal from the High Representative of the Union for Foreign Affairs and Security Policy, decisions establishing:

(a) the procedures for setting up and financing the start-up fund, in particular the amounts allocated to the fund;

(b) the procedures for administering the start-up fund;

(c) the financial control procedures.

When the task planned in accordance with Article 28 A(1) and Article 28 B cannot be charged to the Union budget, the Council shall authorise the High Representative to use the fund. The High Representative shall report to the Council on the implementation of this remit.".

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We start our work by going to the existing Article 28 of the Treaty on European Union (TEU), which we find in the latest consolidated version of the Treaty (OJ 29.12.2006 C 321 E/23):

Article 28

1. Articles 189, 190, 196 to 199, 203, 204, 206 to 209, 213 to 219, 255 and 290 of the
Treaty establishing the European Community shall apply to the provisions relating to the areas
referred to in this title.

2. Administrative expenditure which the provisions relating to the areas referred to in this title
entail for the institutions shall be charged to the budget of the European Communities.

3. Operating expenditure to which the implementation of those provisions gives rise shall also
be charged to the budget of the European Communities, except for such expenditure arising from operations having military or defence implications and cases where the Council acting unanimously decides otherwise.

In cases where expenditure is not charged to the budget of the European Communities, it shall be charged to the Member States in accordance with the gross national product scale, unless the
Council acting unanimously decides otherwise. As for expenditure arising from operations having
military or defence implications, Member States whose representatives in the Council have made a formal declaration under Article 23(1), second subparagraph, shall not be obliged to contribute to the financing thereof.

4. The budgetary procedure laid down in the Treaty establishing the European Community shall
apply to the expenditure charged to the budget of the European Communities.

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What is Article 28 TEU going to look like, if the Lisbon Treaty enters into force? Merging the existing text with the amendments drafted by the IGC 2007 should lead us to a new, consolidated Article 28 TEU:

Article 28

1. Administrative expenditure to which the implementation of this Chapter gives rise for the institutions shall be charged to the Union budget.

2. Operating expenditure to which the implementation of this Chapter gives rise shall also
be charged to the Union budget, except for such expenditure arising from operations having military or defence implications and cases where the Council acting unanimously decides otherwise.

In cases where expenditure is not charged to the Union budget, it shall be charged to the Member States in accordance with the gross national product scale, unless the Council acting unanimously decides otherwise. As for expenditure arising from operations having military or defence implications, Member States whose representatives in the Council have made a formal declaration under Article 23(1), second subparagraph, shall not be obliged to contribute to the financing thereof.

3. The Council shall adopt a decision establishing the specific procedures for guaranteeing rapid access to appropriations in the Union budget for urgent financing of initiatives in the framework of the common foreign and security policy, and in particular for preparatory activities for the tasks referred to in Article 28 A(1) and Article 28 B. It shall act after consulting the European Parliament.

Preparatory activities for the tasks referred to in Article 28 A(1) and Article 28 B which are not charged to the Union budget shall be financed by a start-up fund made up of Member States' contributions.

The Council shall adopt by a qualified majority, on a proposal from the High Representative of the Union for Foreign Affairs and Security Policy, decisions establishing:

(a) the procedures for setting up and financing the start-up fund, in particular the amounts allocated to the fund;

(b) the procedures for administering the start-up fund;

(c) the financial control procedures.

When the task planned in accordance with Article 28 A(1) and Article 28 B cannot be charged to the Union budget, the Council shall authorise the High Representative to use the fund. The High Representative shall report to the Council on the implementation of this remit.

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The Convention, led by Valéry Giscard d’Estaing, looked for more flexibility and rapidity by proposing the following Article III-215 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/70):

SECTION 2

Financial provisions

Article III-215

1. Administrative expenditure which the provisions referred to in this Chapter entail for the institutions shall be charged to the Union budget.

2. Operating expenditure to which the implementation of those provisions gives rise shall also be charged to the Union budget, except for such expenditure arising from operations having military or defence implications and cases where the Council of Ministers decides otherwise.

In cases where expenditure is not charged to the Union's budget it shall be charged to the Member States in accordance with the gross national product scale, unless the Council of Ministers decides otherwise. As for expenditure arising from operations having military or defence implications, Member States whose representatives in the Council of Ministers have made a formal declaration under Article III-201(1), second subparagraph, shall not be obliged to contribute to the financing thereof.

3. The Council of Ministers shall adopt a European decision establishing the specific procedures for guaranteeing rapid access to appropriations in the Union budget for urgent financing of initiatives in the framework of the common foreign and security policy, and in particular for preparatory activities for tasks as referred to in Article I-40(1). It shall act after consulting the European Parliament.

Preparatory activities for tasks as referred to in Article I-40(1) which are not charged to the Union budget shall be financed by a start-up fund made up of Member States' contributions.

The Council of Ministers shall adopt by a qualified majority on a proposal from the Union Minister for Foreign Affairs European decisions establishing:

(a) the procedures for setting up and financing the start-up fund, in particular the amounts allocated to the fund and the procedures for reimbursement;

(b) the procedures for administering the start-up fund;

(c) the financial control procedures.

When it is planning a task as referred to in Article I-40(1) which cannot be charged to the Union's budget, the Council of Ministers shall authorise the Union Minister for Foreign Affairs to use the fund. The Union Minister for Foreign Affairs shall report to the Council of Ministers on the implementation of this remit.

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In the Treaty establishing a Constitution for Europe the member states took on board the proposal of the Convention with minor changes in Article III-313 (OJ 16.12.2004 C 310/141 and 142):

SECTION 3

FINANCIAL PROVISIONS

Article III-313

1. Administrative expenditure which the implementation of this Chapter entails for the institutions shall be charged to the Union budget.

2. Operating expenditure to which the implementation of this Chapter gives rise shall also be charged to the Union budget, except for such expenditure arising from operations having military or defence implications and cases where the Council decides otherwise.

In cases where expenditure is not charged to the Union budget it shall be charged to the Member States in accordance with the gross national product scale, unless the Council decides otherwise. As for expenditure arising from operations having military or defence implications, Member States whose representatives in the Council have made a formal declaration under Article III-300(1), second subparagraph, shall not be obliged to contribute to the financing thereof.

3. The Council shall adopt a European decision establishing the specific procedures for guaranteeing rapid access to appropriations in the Union budget for urgent financing of initiatives in the framework of the common foreign and security policy, and in particular for preparatory activities for the tasks referred to in Article I-41(1) and Article III-309. It shall act after consulting the European Parliament.

Preparatory activities for the tasks referred to in Article I-41(1) and Article III-309 which are not charged to the Union budget shall be financed by a start-up fund made up of Member States' contributions.

The Council shall adopt by a qualified majority, on a proposal from the Union Minister for Foreign Affairs, European decisions establishing:

(a) the procedures for setting up and financing the start-up fund, in particular the amounts allocated to the fund;

(b) the procedures for administering the start-up fund;

(c) the financial control procedures.

When the task planned in accordance with Article I-41(1) and Article III-309 cannot be charged to the Union budget, the Council shall authorise the Union Minister for Foreign Affairs to use the fund. The Union Minister for Foreign Affairs shall report to the Council on the implementation of this remit.

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The similarities between the draft Constitutional Treaty, the Constitutional Treaty and the Lisbon Treaty are obvious in this Article.

The financial provisions in Article 28 TEU concern ‘this Chapter’, i.e. the common foreign and security policy (CFSP), including the common security and defence policy (CSDP).

Administrative expenditure is charged to the Union budget.

Non-military operating expenses are charged to the Union budget, if the Council does not unanimously decide otherwise.

Expenditure with military or defence implications is charged to the member states, if the Council does not unanimously decide otherwise. As a rule, a gross national product scale is used for the contributions of the member states, but the Council can unanimously decide otherwise.

The reference to the formal declaration in Article 23(1), second subparagraph, points to the existing TEU. Following the original numbering of the Reform Treaty TEU (as I have done throughout), the corresponding provision is Article 15b(1) TEU, second subparagraph:

“Article 15b(1)

Decisions under this Chapter shall be taken by the European Council and the Council acting unanimously, except where this Chapter provides otherwise. The adoption of legislative acts shall be excluded.

When abstaining in a vote, any member of the Council may qualify its abstention by making a formal declaration under the present subparagraph. In that case, it shall not be obliged to apply the decision, but shall accept that the decision commits the Union. In a spirit of mutual solidarity, the Member State concerned shall refrain from any action likely to conflict with or impede Union action based on that decision and the other Member States shall respect its position. If the members of the Council qualifying their abstention in this way represent at least one third of the Member States comprising at least one third of the population of the Union, the decision shall not be adopted.”

In other words, an abstaining member state makes a formal declaration, lets the other members proceed, but is not bound by the decision with military or defence implications, including the operating expenditure.

Rapid access to CFSP resources is the novelty in the Lisbon Treaty, as proposed by the Convention and incorporated into the Constitutional Treaty, especially preparatory activities for CSDP operations referred to in Article 28a(1) and Article 28b.

The Council decides on the procedures for rapid access to funds from the Union budget for urgent needs. The European Parliament is only consulted.

If the preparatory activities can not be charged to the Union budget, they shall be covered by a start-up fund made up of member states’ contribution. The Council makes the decisions needed by qualified majority, on a proposal from the High Representative. The Council authorises the use of the fund and monitors its use. – There is no mention of scrutiny by the European Parliament.

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The provisions on the common security and defence policy (CSDP) are next in line.


Ralf Grahn