The European Parliament is on the verge of approving a 14.95 billion ecu ($17.5 billion) budget for research and development, after dispute over a guillotine clause threatened to stall the process.
According to European Commission sources, the new budget for the Fifth Framework Programme includes a 3.6 billion ($4.2 billion) provision for the Information Society Technologies (IST) scheme.
This covers funding for cooperation between industry vendors and university researchers on hardware, software and telecommunications projects.
The budget proposal was originally filed by EU member states, but up till now has been blocked by Spain, which disputed a so-called 'guillotine' clause over the need for a funding review in 2000.
A parliament official said: "The guillotine clause has been a major problem. It says that if there is a new financial perspective (5-year EU spending plan) in place, and it covers the amount agreed in the programme, then the programme proceeds as normal."
He continued: "If not, all programmes come to a halt, and will not be implemented further until there is a decision on a new financial perspective. Spain wanted this clause as part of the agreement, but this was not acceptable."
As a result, a revised agreement has been proposed to protect Parliament's position and guarantee Spain's safety net. The clause can only be applied with Parliament's cooperation, and following a mid-term review.
This mid-term review would allow for members to adapt scientific and technological objectives - and funding - halfway through the Fifth Framework Programme, and according to Commission sources, Spain had reacted positively to the proposals.
A Parliamentary source said: "From Parliament's point of view, if we could get rid of the guillotine clause, but keep the mid-term review, we would agree to a budget of around 15 billion ecu. Most member states are willing to go for this."
An aide to European science, research and development commissioner, Edith Cresson, added that it was significant that the member states themselves had made the proposal because it showed they were willing to negotiate, and that people were slightly more optimistic.
Other Commission sources indicated that a deal is likely to be struck in Strasbourg, where the Parliament is meeting from next Tuesday and where negotiations will be resumed.
A Commission official said: "Member states are still discussing the new compromise package, which has been approved by Parliament. The situation looks hopeful for Strasbourg - but no one has thought of the next step in case an agreement is not reached."
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