Pöttering blasts Berlin over budget cap call

By Dana Spinant

Date: 22/01/04

GERMANY is "dividing Europe" by trying to cap the EU budget at 1% of gross national income (GNI), the head of the European Parliament's biggest party group, Hans-Gert Pöttering, has warned.

Speaking to European Voice, the leader of the European People's Party said that moves by Berlin to gather support from other member states for the budget cap are "a bad development".

"The German government has the great responsibility for having divided Europe during the Iraq crisis. They are now doing just the same on the financial perspectives," the German Christian Democrat said.

"We are against dividing Europe into net payers and net contributors. There should be a Union of solidarity, not of poor and rich. We must understand the situation of those who need solidarity."

Leaders of Germany, France, the UK, Netherlands, Austria and Sweden wrote to Romano Prodi, European Commission president last December, urging him to freeze the budget at 1% of GNI until 2013.

The letter, sent only two days after the aborted Brussels summit on the EU constitution, sent shock waves across the Union. The move was dubbed as "thoughtless" by the man tipped to succeed Romano Prodi, Jean-Claude Juncker, prime minister of Luxembourg.

But Hans Eichel, the German finance minister, claimed on Tuesday (20 January) in Brussels that three other member states are considering lending support to the net payers' campaign.

Eichel said Italy, Ireland and Slovenia could join forces with the six to fight for a budget cap. Diplomats suggested that the group could grow to ten member states, as Finland would support it too.

A German official explained that more member states realized that they may become net contributors to the EU budget after 2007. "Ireland, for instance, because of the "statistical effect" of enlargement, could soon be a net payer. The same is true of Italy," he said.

The EU's present poorer states, such as Greece, Portugal and Ireland, will appear richer after the accession of even poorer countries from central and eastern Europe, as the accession of the poorer states will bring the average wealth down across the European Union.

But the German official warned that even the new member states should think twice about a big budget.

"They should realize that if the EU budget is bigger, it does not only mean that they will get more money, but also that they will pay more to the European Union's coffers.

"Everybody will think again before asking for a lavish budget."

The Commission will unveil its proposal for a seven-year spending programme on 10 February. Prodi has already warned the Union's pay masters that the EU cannot achieve its tasks with a 1% budget.

The Commission's budget officials are working on a plan under which the Union would spend around 1.12% of GNI every year. According to an early draft, the

2007 budget would start at 1% and rise gradually to 1.24%, which is the present upper ceiling, by 2013.

Michel Barnier, the French commissioner in charge of regional policy and institutional reforms, has warned that "a 1% budget is not realistic".

"We don't need to exceed 1.24%, but we are not obliged to be much under this ceiling," he told this newspaper.

Pöttering said the EPP wants to see a "moderate increase" in the EU budget.

He hinted that the 1.12% figure that the Commission is currently working on "seems right".

• Prodi's call for a realistic budget will receive the backing of Albert Bore. president of the Committee of the Regions, when the two meet for talks today (22 January).

Bore said he supported Barnier's proposal to guarantee financial support for all "objective 1" regions with less than 75% of the average EU GDP. danaspinant@economist.com

http://ec.europa.eu/comm/budget/financialfrwk/index_en.htm http://ec.europa.eu/comm/budget/financialfrwk/index_en.htm

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