MEPs rescue EU chemicals agency from financial mire 

The move comes after European Commission Vice-President Günter Verheugen said cutting the European Chemicals Agency (ECHA) budget would undermine its work and throw implementation of the REACH directive into disarray. 

In 2010, ECHA is due to add 102 staff to the 320 personnel it will have recruited by the end of the year. This increase has been foreseen since the beginning of the REACH process in order to cope with its new tasks, and will cost €4.7 million. 

However, in July EU governments agreed to a recruitment freeze for all existing agencies, with the notable exception of Frontex, which coordinates border security. New bodies due to be set up in 2010 are also exempt. 

Many established EU agencies may have added a handful of new posts had governments not issued a blanket recruitment ban which was not specifically designed to slash the ECHA's budget. Nonetheless, 35% of the savings due to arise from the decision were to come from capping staff numbers at the chemicals agency. 

Verheugen slams EU governments 

Verheugen lashed out at European governments earlier this week (1 September) when he appeared before the European Parliament's environment committee. The commissioner was not due to discuss the ECHA, but took the opportunity to express concern over the European Council's sweeping cost-containment measure. 

He said 2010 will be "critical" for implementing REACH, and the agency needs resources to support this process. 

"I am very concerned about Council's proposal to cut funding by €5 million. A cut of €5 million will undermine the work of the agency. I'm dead against the intention of Council here. It's just not on," he said. 

Verheugen said it would be counterproductive to draw up ambitious chemicals legislation, only to cut its resources at the implementation phase. 

"We cannot make legislation to equip Europe for the long term and then take away money. You can't have ambitious goals and then pull the funding," he said. Diplomatic sources said governments did not believe delaying recruitment would undermine the agency, adding that member states were merely seeking to apply to the agencies the same principles for administrative expenditure as those applicable to the EU institutions. 

MEPs vote to reinstate agency's budget 

The commissioner's comments on Tueday were timed to bring the issue to the attention of the ENVI committee, which voted yesterday (September 2) to reinstate ECHA's budget and allow it to continue to significantly expand its staff numbers next year. 

MEPs from all major political groups backed an amendment proposed by German Social Democrat Jutta Haug, which effectively overturned the decision by member states to stall recruitment at ECHA. 

The move is significant as the European Parliament has ultimate control over financing of external agencies. 

In August, Haug submitted a draft opinion to the Parliament's budget committee on behalf of the environmental committee, stressing that decentralised agencies, including the ECHA and the European Medicines Agency, must be given "proper financing" to carry out their functions. 

MEPs also highlighted that the chemicals agency will soon become dependent on revenues generated by fees, recommending that it be given budgetary flexibility to allow it to deal with the uncertainty this may bring. 

Cash flow concerns 

There has been some concern that the timing of REACH implementation will leave a hole in the ECHA's budget. The agency is due to become independent at the beginning of 2010 but the revenue stream it expects to get from fees will not kick in until the end of November 2010, when companies must register for high-volume chemicals under REACH. 

Given its status as an EU agency, ECHA is not in a position to apply to banks for a bridging loan but will get a temporary community subsidy which will be repaid by 2010 using the anticipating income from fees. 

The Commission originally proposed a figure of €30 million, but the Council then reduced this to €25.31 million. 

Geert Dancet, executive director of the European Chemicals Agency, said staff and financial resources would be essential if it is to carry out its work. 

"It will be indeed crucial for the implementation of the REACH and CLP Regulations that the European Chemicals Agency is provided with the necessary human and financial resources to fulfil its mandate. ECHA is therefore grateful that the European Parliament's environment committee has supported its case and adopted amendments that will, when carried through the budgetary process, correct the situation inadvertently created by the horizontal cut of the ECOFIN Council," he said.