An EU draft budget for 1998, agreed yesterday in the European Parliament, calls for austerity and financial restraint and proposes cuts in agricultural spending.
However, the draft also proposes initiatives to combat unemployment and makes additional allocations for job-creation schemes.
The parliament was given the background to the 1998 budget and was told that 550 million ecu would be cut from agricultural spending and a further 550 million from internal and external policies.
It had been agreed that 150 million ecu would be allocated to a jobs initiative for small and medium-sized enterprises. Last October the parliament was told that 12 million jobs could be created in five years.
Schemes under consideration include a reduction in labour taxes, and provision for education and retraining programmes, and the possibility of the European Investment Bank giving loan guarantees to small businesses which take on employees.
Other schemes could include looking at ways to move taxes away from employers and into other areas.
Yesterday the draft budget also proposed an extra 70 million ecu for a student exchange programme for 1998 and 1999.
In the preliminary stages of the budget proposals, the parliament had opposed a reduction in payments for structural funds. That had now been accepted, and this meant preserving the present budget in this area.
The parliament was told that throughout the procedure members of the Budget Committee, while anxious to respect the need for restraint, wanted to see the burden shared fairly between all sectors.
That was why the cuts in internal and foreign policies had been met by similar reductions in the agricultural sector.