Budget plans must wait for treaty deal – commissioner

European Budget Commissioner Dalia Grybauskaite? has said that the EU should complete negotiations on treaty reforms before it starts deciding on its future budget and sources of income.

In an interview with European Voice, Grybauskaite? said that she wanted to see a deal on institutional reforms before putting forward ideas on overhauling the EU’s budget.

"We know that the EU and the new [German] presidency are prepared to take the European reforms forward and revive the constitutional process. I deeply believe the EU budget is only the mirror of European politics. If politics are not sorted out and there are not radical changes in the decision-making process we can’t expect radical changes in the budget," the commissioner said.

"We are very keen to see this process [the treaty negotiations] started first and finished before we put the final [proposal on the budget] on the table," she added. Grybauskaite?, who will be drafting the Commission’s plans for an overhaul of the budget, said that she would present an "issues paper", a kind of "political questionnaire", for discussion next year.

After that, there would be a "full political document" by the end of 2008 or early in 2009 "depending on how the first goal, the discussion on institutions goes".

Asked if the negotiations on new treaty reforms could be linked to budget discussions - in a possible trade-off of farm policy reform for a deal on a new treaty, she said: "Politicians, the German presidency, would like to have it [the negotiations] separated." She pointed out that in any case negotiations on a new financial framework could only start in 2011 after the formal proposals had been adopted by the Commission.

The document to be presented in 2008 or 2009 would contain three options, she said. The "most ambitious" option would involve a "deletion of rebates on rebates and exceptions on exceptions". But she added: "That’s the absolute maximum possible you could achieve." Asked if she meant getting rid of the UK rebate, she said it would not be possible to "clean up" the own resources system without "radical change" to the spending side.

The commissioner was also sceptical about the chance of radical reform to farm support policy before 2013.

"[The deal on the 2007-13 budget] was unanimous so only a unanimous decision can change it," she said. But she pointed out that it would be possible to shift funding within the farm budget in 2008 using the mid-term review of the Common Agricultural Policy (CAP) agreed as part of the 2003 reforms.

She insisted that there would be growing pressure for CAP reform over the coming years for a large number of reasons. These included the fact that new member states would be receiving 100% of farm payments from 2014. This would exert "huge pressure" for reform, she said.

The decision to publish the names of beneficiaries of farm payments would also help the reform process, she said, as it became clear that "large amounts of CAP funds are received by a small number of individuals".

She did not rule out moving to national co-financing of farm subsidies in the future, pointing out that from January 2007 the 12 new member states (including Romania and Bulgaria) would be co-financing their farm payments. For half of the member states the CAP was "already partly renationalised", she said.

Grybauskaite? was sceptical about creating a European tax to provide funds for the EU budget. There was a problem with the idea of a tax, she said, because citizens thought it would be an "additional burden" on them. In any case, national governments did not want to lose control over how much money the EU budget received, she said.

European Budget Commissioner Dalia Grybauskaite? has said that the EU should complete negotiations on treaty reforms before it starts deciding on its future budget and sources of income.