Irish upbeat despite EU budget blues

By Peter Chapman

Date: 27/05/04

THE Irish presidency has admitted infighting between EU member states on contributions to the European Union's multi-billion budget will be a tough nut to crack.

A policy paper that lays the ground for budget discussions at next month's meeting of EU leaders in Brussels (17-18 June) warns: "It is clear that the different positions on the expenditure ceiling and the arguments advanced in support of those positions, will not be easily reconciled."

The UK, Germany, Austria, Sweden, the Netherlands and France have all publicly opposed initial plans from the European Commission to set the EU spending in 2007-13 at a ceiling of 1.14% of gross national income.

In what has been dubbed the "letter of the six", the nations' leaders have called for a cap of 1% on the EU's spending until 2013. They are unofficially supported by Denmark and Finland. Italy and Ireland are also said to back them - but Dublin cannot take a position before the end of its stint at the EU's helm on 30 June.

However, the Irish blueprint, discussed by EU diplomats this week, notes that governments already agree on many of the priority areas for EU cash in 2007-13 - even if the level of expenditure depends on the sum ministers finally agree to pledge.

Member states for example "are broadly supportive" of priority areas such as cohesion, the need to combat terrorism, control the external borders, combat trafficking, achieve further progress in the area of asylum procedures and the Lisbon Agenda on competitiveness.

However, the Irish note that some countries are reluctant to write a blank cheque for projects designed to help European competitiveness and growth.

The document also notes "there are calls for the abolition of the rebate which has benefited one member state since the mid-1980s".

This is a reference to the UK's 3 billion a year rebate won by Margaret Thatcher in 1984, on the grounds that Britain receives relatively few agricultural subsidies, which were then constituting the bulk of the budget.

Moreover, Dublin warns that the hit-list of priorities risks getting out of hand in detailed discussions between governments.

"Any attempt to have 25 member states establish a clear hierarchy of expenditure is unlikely to fully succeed," the Irish warn, adding that "stricter prioritization" is needed.

Earlier this week Budget Commissioner Michaele Schreyer hinted that the Commission might heed national demands for rebates in its final budget proposals, expected later this summer.

Article considers differing viewpoints of Member States over the EU's budget.

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