Tacis and Meda face cuts to fund aid for Kosovo

Date: 24/06/1999

By Simon Taylor

EU GOVERNMENTS are planning to cut back spending on international cooperation projects to find the money needed to pay for rebuilding Kosovo.

The two areas likely to be hardest hit by the move are the Union's Tacis programme for helping Russia and other post-Communist countries and its Meda scheme, which funds projects in the Mediterranean region.

These two programmes could lose €100 million each - 10% of their total budgets for next year - to provide funds for Kosovo. Non-governmental organisations also face a possible €8 million reduction in the grants they get from the EU.

Although the main impact of the cuts will be felt next year, Commission staff have already begun identifying areas where savings can be made in 1999. "The hat is being passed round and we are all being asked to put something into it. It is politically inevitable," said one official.

Savings of €150 million will have to be found this year after EU foreign ministers agreed earlier this week to provide immediate aid for refugees in Kosovo. Finance ministry officials have also begun discussing a range of changes to the EU's budget for 2000 which would generate up to €500-700 million to cover the costs of restoration.

This approach has won the support of a majority of Union member states including France and Spain, even though they attach great importance to EU funding for projects in the Mediterranean region.

One official said that as long as the money needed for Kosovo was not taken out of the Union's regional aid budget, there would be no opposition from those countries which get more money back from the EU than they pay in.

But one diplomat predicted that the southern member states would put pressure on their northern partners to take more of the cash required from the Tacis programme for Russia and eastern Europe than from Mediterranean projects.

The decision to extract the money for Kosovo from the EU's external relations budget reflects the change in the Union's political priorities in the aftermath of the conflict. The Commission's original spending plans envisaged allocating €5.716 billion to external relations in 2000, with €635 million going to Tacis and €551 million to Meda.

Governments are still debating whether to cut spending by 10% across the board or slice €100 million each off the allocations for eastern Europe and the Mediterranean and take 10% from all other areas covered by the external relations budget.

Acting Foreign Affairs Commissioner Hans van den Broek said yesterday (23 June) the cost of rebuilding Kosovo would be around €1 billion a year for the next three years, and that the EU would pay half the bill. He added that the precise cost would be established by a special evaluation mission.

Once the the exact figure is known, proposed changes to the 2000 budget will be presented in time for a meeting of Union budget ministers on 16 July which will discuss the Commission's spending proposals for next year. However, a final decision on the 2000 budget is not expected until December, after negotiations between the EU institutions.

Features on the initiatives by the EU and other elements of the international community to prepare for the rebuilding of Kosovo.