Finance ministers earmark EUR 111bn for 2006 budget

By David Cronin and Martin Banks

Date: 07/07/05

EU Finance ministers are likely to set a Û111 billion budget for the Union's activities in 2006 when they meet in Brussels next week (15 July).

The proposed sum would be just more than Û1bn less than the overall spending plans previously recommended by the European Commission.

Diplomats from the Union's 25 countries yesterday (6 July) agreed by a weighted majority to a series of cuts to the Commission's proposals. But Germany, the biggest net contributor to the budget, felt that the proposed reductions did not go far enough. The Netherlands and Austria expressed similar views.

The cuts would take Û150 million from the amounts earmarked for agricultural subsidies, Û120m from administration in the EU institutions, Û127m from pre-accession aid for countries bidding to join the Union and Û82m from other foreign aid.

It was also agreed that Û655m earmarked for direct payments to farmers should instead go to rural development measures such as environmental or animal welfare schemes or creating jobs in villages. Diplomats say such a transfer would be in line with the reform of the Common Agricultural Policy agreed by the Union's governments in 2003.

A question to remain open for next week's meeting is aid for Slovakia to help repair the damage done by storms, which severely affected the country's forests last year.

Diplomats are to hold a preparatory meeting on the budget forecasts with representatives of the European Parliament on Monday (11 July). The agreement of MEPs is required in order to set the budget.

Polish centre-right deputy Janusz Wojciechowski, who is to lead the Parliament's delegation, said next week's meetings would provide "an early test" of whether Britain's EU presidency could secure compromises on budgetary issues following the failure of last month's Brussels summit to agree on spending plans for 2017-13.

While he said the precise questions which MEPs will raise in the talks have not been finalised, one issue that will almost certainly feature prominently is aid to the victims of the Indian Ocean tsunami.

MEPs are perturbed by efforts to take away Û60 million in long-term development aid already earmarked for Asia to spend it on dealing with the disaster and are pressing for money for tsunami-related projects to be additional to previous commitments.

Jan Mulder, a Dutch Liberal MEP, is expected to be another member of the assembly's delegation. His two main priorities, he said, would be to increase funding for small- and medium-sized businesses and for food safety.

Anticipation of a meeting of the Economic and Financial Affairs Council, 15 July, Brussels. EU Finance Ministers were to discuss the EU's budget for 2006.

European Commission: DG Budget: Documents: The general budget of the Union http://ec.europa.eu/comm/budget/furtherinfo/index_en.htm

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