• Danish flag. The commission believes that with a bit of "good will" a deal can be reached on the budget this year (Photo: quietdangst)

Danes seek clarity on future EU budget

27.01.12 @ 18:02

  1. By Honor Mahony
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BRUSSELS - The EU's famed diversity was on show on Friday (27 January) during first concrete discussions on the European Union's next long term budget, a debate that threw up as many points of view as there are member states.

Trying to start what is normally a fraught debate on a constructive note, the Danish EU presidency asked ministers to indicate whether they agreed with the budget priorities and the overall sum - a five percent increase to €1.025 billion for the 2014-2020 period - as proposed by the European Commission last June.

Even the question itself caused some grumbling. A whole series of countries asked whether it was useful to be talking about the overall sum when money for specific policies has yet to be decided.

The biggest issues concern whether the size of the budget is appropriate and, if cuts are to be made to it, which policy areas they should hit - concerns that have become more acute as countries across Europe implement austerity measures in response to the eurozone debt crisis.

Net-paying countries, Germany, the UK, Finland, France and the Netherlands stuck to the position - first outlined in a pre-emptive letter sent late in 2010 - that the commission's proposal needs to be curbed.

"It's €100 billion too high," said Dutch minister Ben Knapen.

His UK counterpart David Lidington referred to the "considerable financial efforts" members states are making to support the EU, while also noting that London "will protect" its annual rebate from the budget - a source of friction with other countries.

Italy, currently undergoing stringent austerity measures under its new technocratic government, indicated it is prepared to join the camp in opposition to the size of the budget.

"The Italian government may find it necessary in the light of its responsibilities to the taxpayer to pay serious consideration to a sizing down of the euro budget," said Italy's representative.

Some countries, such as Ireland and Lithuania, supported the budget increase.

Many poorer member states expressed concern about the fate of cohesion funds which - along with farm money - account for around 75 percent of the budget.

One particular worry for newer member states is the conditionality introduced by the commission for payment of the funds, which are themselves meant to raise the standard of living in poor parts of the EU. Meanwhile, Hungary said the commission's idea of capping cohesion fund payouts according to a country's gross national income as "unfair."

But richer states have a different view. "We have to find to courage to spend less on areas not fulfilling these (growth) criteria. We need to make to make substantial reductions and reforms of the CAP and the cohesion policy to achieve a modern budgets. This is a precondition for us," said Sweden.

There were also calls for the money to be better spent, with the German and French representatives pointing out that cohesion money has in the past been used to renovate hotels and build bicycle stands.

A majority of member states raised transparency concerns about the fact that the commission has omitted €58.3 billion of EU spending - for such things as the bloc's development fund and ITER, its fusion reactor project - out of the formal budget. "Increased off-budget spending is simply not acceptable," said the UK.

Putting the spending back on to the formal books raised other questions.

Belgium indicated it could live with a reduction in the size of the budget but not if the reduction was calculated including extra spending for projects currently not counted.

The commission's proposal to try and raise money by raising money itself remains as controversial as the executive predicted it would be.

The Czech Republic "doesn't see any relevant reason for introducing own resources", a view shared by the UK and the Netherlands.

Denmark's Nicolai Wammen said the debate had given a "better picture" of where countries stand on the EU budget and promised discussions devoted to cohesion policy in April and June.

"The more you achieve, the happier Cyprus will be," said the island's Europe minister, with Cyprus taking over the rotating presidency on 1 July and meant to see through the negotiations to a deal by the end of 2012.