Transport funding plan runs into buffers

Date: 05/09/1996

OPPOSITION is growing to the Commission's plan to raise an extra 1 billion ecu to finance 14 showcase transport projects.

The hardline group opposed to the idea of Commission President Jacques Santer has grown from the initial set of German, British, Dutch, French, Finnish and Swedish finance ministers to include their Spanish and Italian counterparts.

At their July meeting, EU finance ministers set up a group of personal representatives to discuss the issue and report back to them at their informal gathering in Dublin on 21 September.

The first pre-summer meeting of this group, chaired by former Director-General Eamonn Gallagher, saw attitudes hardening against Santer's plan.

“It is not particularly encouraging,” said an official. “There is a large hard core of finance ministers who are dead against providing any extra money for the Trans-European Networks (TENs) on principle. They are cutting spending at home and they are not prepared to raise it at the Community level.”

The coming meetings next week and on 16 September are unlikely to see any softening in their position. This will come as a blow to Santer, who has been fighting for this extra cash for the 14 priority TENs projects as part of his 'confidence pact' for employment.

Internal Commission analysis has revealed that the projects will need an extra 1.7 billion ecu by 1999 if they are to be completed on time, with the 16-billion-ecu high-speed rail link between France, Germany, the Netherlands and the UK alone accounting for one quarter of this.

At the Florence summit in June, Santer came within a whisker of winning the support of German Chancellor Helmut Kohl for his plan to reallocate some of the underspent agriculture budget into TENs funding. But Kohl's Finance Minister Theo Waigel persuaded him otherwise.

As a result, Santer changed tack and promised spending cuts worth 200 million ecu in return for a 1-billion-ecu increase in the expenditure ceiling for internal policies - now set at around 5.5 billion ecu.

Even this has found few takers in the Gallagher group and the Dublin meeting looks set to give the thumbs down to Santer's plan. Nevertheless, an out-and-out rejection of the proposal seems unlikely even if ministers have no intention of ever providing extra cash for TENs. “Some face has to be saved,” said a diplomat. “People do not like saying 'no'. They are more likely to say 'wait'.”

Transport Commissioner Neil Kinnock, who has long been sceptical of using the TENs cash top-up as a pump-priming measure for creating jobs, aims to keep the ball rolling by hosting a meeting in Brussels two days after the Dublin gathering.

On 23 September, his working group set up to consider how best to encourage public and private sector partnerships for the planning and financing of major transport projects will meet for the first time. It will include representatives from transport ministries and project-financing specialists from investment banks and engineering companies.

“These are long-term problems that can only really be solved in this way,” said a Commission official. “The projects which work best are those where there is a genuine public-private partnership.”