Thursday

28th Mar 2024

Poor members worried by EU spending cut reports

Member states from central and eastern Europe are getting ready for tough talks on the EU budget with UK leader Tony Blair this week, following hints that the British presidency plans to propose sharp spending cuts for the bloc's poorest countries in 2007-2013.

Mr Blair will meet the leaders of the Baltic states in Tallinn on Thursday (1 December) before taking his diplomatic tour to Budapest on Friday to debate the pending budgetary proposal with the four Visegrad countries.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Bratislava - the Slovak government is disappointed with German chancellor Merkel (Photo: European Commission)

Poland, the Czech Republic, Hungary and Slovakia have agreed to write a letter to Mr Blair urging him to secure an EU budget deal by the end of this year.

Poorer countries from central and eastern Europe are concerned that further delays in spending talks will cause financial losses and delays in programmes designed to strengthen their economies.

But with early details of the UK's proposal emerging ahead of the 5 December publication date, the new member states have also made clear they will not sacrifice their slice of the pie in the name of compromise.

Less money or no deal in December?

UK media have backed up reports that London aims to squeeze structural funds for new member states in its new offer, while placing an overall limit of 1.03 percent of EU gross income on spending, instead of the previous 1.06 percent proposal.

With the UK sticking to its rebate and lack of widespread support for an early overhaul of the common agricultral policy, structural funds seem the most likely to suffer under any new deal.

Poland, which stands to lose up to €6 billion form the slated €60 billion EU package for 2007-2013 if the structural fund cuts take hold, has already signalled its oppsition to such a move.

Polish prime minister Kazimierz Marcinkiewicz said Warsaw would prefer no budget to a bad budget, Gazeta Wyborcza reports.

But the new leader refused to say if he would veto any spending cut plans until he has talked personally with Mr Blair on Friday.

Punishment for tax reform?

Meanwhile, the Slovak finance ministry has blasted suggestions by German chancellor Angela Merkel that poorer EU countries with lower corporate taxes should get less money from the EU budget.

During her Paris-Brussels-London tour last week, Ms Merkel argued that low taxes in the region would cause companies to leave Germany, according to German daily Die Welt.

But her statements have sparked bitter disappointment in Bratislava, with officials questioning the chancellor's shift from her position in the run-up to Germany's elections, praising Slovakia's tax reform, to her new stance.

The idea of linking EU funds to corporate taxes was previously spelt out by Ms Merkel's social democrat predecessor Gerhard Schroder.

'Swiftly dial back' interest rates, ECB told

Italian central banker Piero Cipollone in his first monetary policy speech since joining the ECB's board in November, said that the bank should be ready to "swiftly dial back our restrictive monetary policy stance."

Opinion

EU Modernisation Fund: an open door for fossil gas in Romania

Among the largest sources of financing for energy transition of central and eastern European countries, the €60bn Modernisation Fund remains far from the public eye. And perhaps that's one reason it is often used for financing fossil gas projects.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us