Friday

14th May 2021

Group of EU states wary of 2008 budget plan

Several EU member states have criticised the European Commission's draft spending hikes for the 2008 budget, ahead of the first debate on the budget proposal to be held by finance ministers on Tuesday (7 May).

Four countries - Germany, France, the UK and the Netherlands - have expressed uneasiness over Lithuanian commissioner Dalia Grybauskaite's plan to spend €121.6 billion next year (5.3% more than in 2007), according to Dutch press agency ANP.

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  • Some countries say Brussels will not be motivated to work efficiently if it gets more money (Photo: Wikipedia)

The critics argue that by putting aside more money than is likely to be spent, the EU executive is not motivated to work efficiently, even though the 2008 plan respects broad annual spending limits as agreed by the bloc's leaders for 2007 to 2013.

The concerns sit strangely next to Ms Grybauskaite's vision, who highlighted efficiency and economic competitiveness as the key features of her draft 2008 budget when presenting the plan last week.

Under her proposal, €57.2 billion (44.2% of the budget for 2008) is to be put toward "sustainable growth." The amount is higher than what the EU will be paying out for its Common Agricultural Policy (CAP) - €56.3 billion - for the first time in EU history.

Brussels wants to top up areas such as the cohesion funds for big infrastructure projects (plus 14% compared to 2007), research (plus 11%), energy and transport (plus 14%) and lifelong learning (plus 9%).

The commission also argues that it is prepared to pursue a new approach to its staff policy, which is to be focused on re-deployment rather than employing new personnel.

But the EU's 2008 expenditure for administration is still expected to rise by 5.7 percent compared to this year, mainly due to hikes in pensions (up by 10.2%) for employees from all institutions and for European schools (an 11.1% rise), following the increase in personnel in Brussels after the two most recent enlargements.

The commission and member states had a bitter fight last year over the increase in administrative expenses, with Brussels arguing the proposed hikes were necessary to provide equal representation of nationalities in EU institutions.

In 2008, the EU's budget may also be strained due to two foreign policy projects for which the commission has put aside financial reserves - Kosovo and Palestine aid.

On top of this, Brussels has suggested the EU may be forced to inject extra cash into its satellite navigation system, Galileo, due to problems with private capital previously expected to cover the bill.

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