Santer’s TENs plan reaches end of line

Date: 19/09/1996

By Tim Jones

FINANCE ministers are poised to throw out European Commission President Jacques Santer's plan to spend an extra billion ecu on the EU's most important transport projects.

Their top officials have been unable to strike a deal on how - or even whether - to find money within the Union's 85-billion-ecu budget to help finance 14 priority Trans-European Network (TENs) projects.

When they meet in Dublin on 21 September, ministers will be given a report from a group of their personal representatives which should finally put the drawn-out TENs funding issue to rest.

If it does, this will be a crushing blow to Santer, who made raising the cash a centrepiece of his prized 'confidence pact' for employment.

Having failed to win support for his plan to switch underspent farm resources into TENs, he called for spending cuts of 200 million ecu in 1998-99 in

return for a 20&percent; increase in the 5.5-billion-ecu expenditure ceiling for internal policies.

Finance ministers set up a high-level group, chaired by former Commission Director-General Eamonn Gallagher, to examine the proposal but three meetings have simply seen attitudes hardening.

In its report to Dublin, the group states: “Given the differences in views of the representatives of the ministers of finance, it is not possible in present circumstances to reach an agreement on the financial perspectives for 1998-99.”

Ever since Santer first made his proposal in February, a group of six member states - Germany, France, the UK, the Netherlands, Sweden and Finland - has been unwilling even to consider a revision of the financial perspectives agreed four years ago.

They did not budge at all during the three Gallagher group meetings.

Indeed, their position that the TENs needed no supplementary loan finance was given added impetus by a submission from the European Investment Bank at their 9 September gathering.

Reminding ministers that it had already sunk 5.2 billion ecu into nine of the priority projects, the EIB reported that “the principal delaying factors for these projects are frequently a combination of a planning and administrative nature ... Loan finance has not proved to be a constraint in any of the cases.”

The EIB found that all too often, the leadership of projects was fragmented between several ministers and public bodies while planning procedures, which can take years, had not even begun for some of them.

Only Greece and Portugal gave their full backing to the Santer proposal, with more reticent support from Belgium.

While the Swedes were prepared, along with the Spanish and Austrians, to consider a reallocation of spending within the internal policies category of the budget, they could not stomach any raising of the ceiling.

Possible spending cuts of up to 700 million ecu under this heading, identified by the Netherlands, were the only possible basis of a compromise among the group. But this was vetoed by the European Parliament, which has the final say on this area of the budget.

Before they entered their final meeting this week, officials were told by Laurens Brinkhorst and Joan Colom I Naval, the Parliament's budget draughtsmen, that they could not accept spending cuts without a revision of the financial perspectives.

“With that said, no compromise was possible,” said a diplomat.

On Saturday (21 September) in Dublin, finance ministers will have to decide whether to accept the conclusions of the working group's report and put this issue to bed or find some formula to save the Commission's face.