EC comes out with 'agenda for future' to end budgetary flaps

Thirty years ago Western Europe launched a visionary experiment: to unite as an economic superpower which would be a political force for peace as well. In recent years, however, a series of loud arguments over how this European Community should spend its growing budget (some $25 billion a year), and who should benefit the most, has set capital against capital, generated headlines of "financial crisis," and led to some intensive soul-searching here in Brussels.

Now th Community -- stretching across 10 countries and including 260 million people -- has taken its biggest step yet to ease its budgetary confrontations.

Initial impressions here are that the step is something less than the "agenda for the future" its architects had promised. It was bound to bring protests from West Germany as well as from a number of other countries. It was a start, not an end, but at least it was destined to remain the focus of debate for months to come.

The step came in the form of recommendations by the European Commission for limited revisions of the ways in which the Community divides its budget to give help to farmers and to poor regions within Europe, and to deal with social problems.

The recommendations sprang from the protracted squabbling which saw Britain flatly refuse to pay its share of the budget in December 1979.

In May 1980 a compromise was reached.Britain received cash refunds totaling more than $3 billion for 1980 and 1981 -- and European leaders called for a plan to avoid similar squabbles in the future.

The Commission president, Gaston thorn, unveiled the much-heralded, long- awaited plan at a press conference in Luxembourg June 24. It turned out to be a series of compromises between reformists and defenders of the status quo.

Britain and the European Parliament had been seeking similar cutbacks in the Community's increasingly costly and controversial farm support system. They felt it benefited mainly French agribusinesses and small farmers in Ireland, Denmark, Belgium, and West Germany.

They wanted to channel more of the budget to social and regional problems. At the moment some 70 percent of the budget goes to shore up farm prices.

On farm spending, the Commission's answer was to resubmit its own earlier proposals to remove incentives for farmers to overproduce. They would also eliminate automatic farm price supports.

These proposals remain unpopular in France, Denmark, and other countries.

The commission specifically tried to answer Britain's frequent complaints that London pays a great deal into the budget but gets very little in return. The new plan would continue the system of rebates to bridge the gap.

West Germany had also complained in recent months of being the Community's paymaster. Chancellor Helmut Schmidt has supported the British view by saying that he too paid in much more than he received. He was expecting some preferential treatment under the plan.

But he did not get it.

President Thorn explained June 24: "There are perhaps other unaccepted but not unacceptable situations. . . . 70 to 80 percent of Germany's contributions to the Common Agricultural Policy [fund] is returned to that country."

Britain and West Germany had also insisted that the current ceiling on the Community budget be retained.

While the Commission did not want to lift the ceiling at once, it clearly indicated that such a move would come eventually.

The Commission's new plan urged that more of the budget be spent for social, regional, energy, and industrial needs. It also envisioned more emphasis on the needs of Mediterranean farmers.