EU governments to fight budget switch

Date: 23/03/2000

By Simon Taylor

EU GOVERNMENTS have vowed to fight the European Commission's plans to break the budget ceiling for external relations programmes next year to pay for reconstruction projects in the Balkans.

Diplomats warn that they will oppose attempts by Budget Commissioner Michaele Schreyer to increase foreign affairs spending by €300 million in 2001, even though she has promised to find the extra money from the agricultural kitty after winning a fierce internal battle with farm chief Franz Fischler.

"The basic line in the Council of Ministers is that we should not start discussions on changing the financial perspective," said one. "There is a solid feeling within the Council of Ministers that all activities should be planned within budget ceilings."

Schreyer argues that transferring the money from agriculture to the external-relations budget is essential to enable the Union to honour its commitment to help the Balkans and ensure that it is ready to assist Serbia if President Slobodan Milosevic is removed from power. Serbia is currently excluded from the EU's regional-assistance scheme because of Milosevic's regime.

"Schreyer is reinforcing the possibility of a rapid reaction to help Serbia," said her spokeswoman, adding: "It would not be politic of the member states to say we can just wait and see."

But Union governments say this argument is based on "speculation" and have called on the Commission to keep within the ceiling for spending on external relations agreed at the Agenda 2000 summit in Berlin last March. They insist the extra funding needed for the Balkans could be found from savings within the foreign affairs budget.

The Commission claims the additional money is vital for the EU to meet its pledge to provide €5.5 billion for reconstruction in the Balkans over the next seven years. The budget deal struck by Union leaders last spring only allocated €1.8 billion for the region, leaving a shortfall of €3.7 billion.

Diplomats predict that the European Parliament will take the Commission's side in the forthcoming argument over the budget plan, reviving last year's battle between MEPs and national governments over how to raise extra money for the Balkans.

"The Parliament tends to see budget ceilings as bureaucratic obstacles to be removed," said one official.

The two sides only managed to agree a last-minute deal on the 2000 budget after the Commission agreed to draw up financing plans for the Balkans stretching over several years to avoid annual fights over how to raise the extra funds.

EU governments have vowed to fight the European Commission's plans to break the budget ceiling for external programmes in 2001 to pay for reconstruction projects in the Balkans. Budget Commissioner Michaele Schreyer argues that transferring the money from agriculture to the external relations budget is essential to enable the Union to honour its commitment to help the Balkans and ensure that it is ready to assist Serbia if President Slobodan Milosevic is removed from power.