28th May 2022

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.

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  • 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.

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