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29th Mar 2024

Blair budget plan may cause East-West divide

New member state politicians have sharply attacked UK prime minister Tony Blair for his proposed EU structural spending cuts - but western European net paying countries appear to be happy with London's plans for the 2007-2013 EU budget.

Poland, Hungary, the Czech republic and Slovakia - the so-called Visegrad group - on Tuesday (29 November) sent an open letter to the UK presidency reminding it of the importance of EU structural funds, which the UK presidency has proposed to slash in the bloc’s 2007-2013 budget.

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Britain will propose to EU leaders at a key summit in December to cut newcomers’ regional funding by 10 percent, in a bid to accommodate demands by net paying member states that want to see an overall cut-back of EU spending.

However, the four countries have reminded the UK presidency that EU regional funding is a key tool for the newcomers to catch up with western European economic levels, Reuters reports.

"Spending EU resources in new member states to upgrade infrastructure, to strengthen innovation and human capital addresses this challenge, which is one of the greatest at the beginning of the 21st century for the EU", the letter said.

It adds that "we are confident that we can count on the commitment of the UK as was the case in the pre-accession period", appealing to London not to give up the staunch support it demonstrated in the past for the new member states' EU bid.

Meanwhile, individual politicians from the new states have used less subtle terms in expressing their disappointment with the UK stance.

Hungarian prime minister Ferenc Gyurcsany told the FT in an interview that if west European states stick to their stinginess, they face the prospect of "the most serious possible conflicts between the different parts of Europe."

Former Polish president Aleksander Kwasniewski blamed the UK for a lack of leadership, stating "One month before the end of the British presidency we are where we are now despite all the statements of the British presidency," according to the IHT.

The Polish politician rebuffed London's argument that new states cannot absorb all the EU funds coming their way in any case.

He countered that the poor EU countries should be helped to absorb the funds, adding that the UK proposal would lead to spending cuts of up to 20 percent in some Polish areas.

Other EU diplomats also point out that previous EU entrants, such as Ireland, also faced early administrative difficulties on EU cash before becoming the bloc's financial "tigers."

The new states have received backing from Spain, with Madrid’s European affairs minister Alberto Navarro saying the Spanish government will not agree to the cuts in structural funds, and that it will co-ordinate its position with Poland, according to El Pais.

But net paying states other than the UK - such as Germany, France, Austria, Sweden, and the Netherlands - appear to be happy with London’s plan, which has resulted in a cut-back of overall spending comitments to 1.03 percent of EU gross national income, compared to the 1.06 percent figure in an earlier proposal made by the Luxembourg presidency in June.

Reimer Boege, a German conservative MEP, told Polish agency PAP: "The proposed cuts are very interesting for all net contributors. Although I do not yet have the position of the German government, taking into consideration the catastrophic state of finances in Germany, I think the finance minister would be happy to pay less into the EU budget."

Mr Blair has not yet responded to the newcomers' concerns, but will meet Baltic and Visegrad leaders later this week.

In a speech delivered on Tuesday, Mr Blair merely reiterated that Britain will not give up its rebate, its yearly discount on its contribution to Brussels, if France does not agree to a cut in agricultural spending.

Ukraine slams grain trade restrictions at EU summit

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With the war in Ukraine showing no signs of ending any time soon, EU leaders will meet in Brussels on Thursday and Friday (21 and 22 March) to discuss how to boost the defence capabilities of Ukraine and of the bloc itself.

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