Budget encourages inertia, says Vilnius envoy

By David Cronin

Date: 12/02/04

THE EU's €100 billion-per-year budget is not geared towards meeting the "Lisbon agenda" goals of developing the world's most dynamic economy by 2010, according to Lithuania's European Commission nominee Dalia Grybauskaite.

The finance minister contends that the current budget, 44% of which goes to agriculture even though farmers make up just 4% of the EU's working population, encourages inertia in member states.

"Today's spending is not very rational," she told European Voice. "The budget needs to support the main goals of European development - growth, labour market reform, Lisbon, competitiveness. But the emphasis on agriculture shows that the budget is not priority oriented."

Grybauskaite held talks this week with Michaele Schreyer, the budget commissioner, as she is keen on "shadowing" the German Green from May, when Lithuania accedes to the Union. She has also been closely following the discussions about the EU's spending plans for 2007-13.

As part of her tight fiscal policies in Vilnius, Grybauskaite has fought efforts to increase domestic subsidies towards her country's farmers.

As a commissioner, she plans to fight for reform of the Common Agricultural Policy (CAP) that goes beyond the package agreed by the member states last year.

"We can call it [the CAP] not a support for a sector of the economy but a social security system. We are practically paying people for doing nothing or for doing what markets don't need. The CAP is the largest distortion which has been created in any economic society in the past 50 years. If the CAP stays as it is, we will have no ability to avoid increased spending and increasing the budget of the European Union."

Grybauskaite, who belongs to a coalition government of social democrats, liberals and agrarian politicians, professed surprise at the debate on communism at the European People's Party congress last week. It adopted a resolution asking politicians from central and eastern Europe not to take up posts in the EU institutions if they had been involved in repressive activities during the communist era.

"Each post-communist country cleaned itself up in the first years of independence," she said. "That was 10-12 years ago."

Lithuania's nominee European Commissioner, Dalia Grybauskaite, contends that the European Union's current budget encourages inertia in Member States.