Transport projects put up as possible budget trade-off

Date: 25/06/1998

By Tim Jones

THE campaign by four northern European governments to cut their contributions to the EU budget could well pave the way for a deal to raise extra money for transport and communications projects, say diplomats.

They point out that the 'gang of four' - Germany, the Netherlands, Austria and Sweden - would be the biggest beneficiaries of any cash injection for the Trans-European Networks (TENs), as most of the 14 top-priority schemes are in the north of the Union.

Officials say that increased spending on transport projects, which would need to be offset by cuts elsewhere, would marginally reduce German, Dutch, Austrian and Swedish net budget contributions because they would get more money back from EU coffers.

The big-money TENs projects include a 20-billion-ecu high-speed rail link between Germany and Italy via Austria, a 26-billion-ecu rail network linking Paris, Brussels, Cologne, Amsterdam and London, and the 4-billion-ecu Oresund sea-crossing between Copenhagen and Malmö. All these are concentrated in the paymaster member states.

At a meeting in Vienna last week to devise their strategy for negotiations on the EU's Agenda 2000 reform package, top Austrian officials agreed to push first for an agreement to boost the 2.3-billion-ecu 1995-99 TENs budget to 5 billion ecu in 2000-2006. At the Cardiff summit in mid-June, heads of state and government called on their ministers to "reach a common position by December".

Austria's approach to the transport budget contrasts sharply with decisions reached at the Florence summit two years ago when German, Dutch and British opposition killed off European Commission President Jacques Santer's plan to divert 1 billion ecu of unspent EU agricultural subsidies into TENs projects.

In early negotiations over the new TENs proposal, officials have agreed on the principle that project funding should be approved for a five-year period, even if the cash is released annually.

They have not, however, decided how much extra money to allocate to the schemes and many are sceptical about the Commission's suggestion that funds from the EU budget should be permitted to make up 20% of total investment in a project, up from the current 10% ceiling.

In its strategy for securing "substantial progress" on Agenda 2000 at December's Vienna summit, the incoming Austrian presidency of the Union is seeking to break the back of the negotiations on farm policy reform and regional funding by late November.

Vienna will also remind the European Parliament of pledges made by President José María Gil-Robles, in an exchange of letters with the outgoing UK presidency, to publish all its 'own initiative' reports on Agenda 2000 by November.

In response to demands from the Dutch and German governments, the Commission will come forward in October with a report on the EU's 'own resources' system for financing the budget through farm levies, import duties and lump sums related to sales tax receipts.

Diplomats believe that the Spanish government, for all the hardball it is playing over Agenda 2000, is reasonably content with the current package of proposals because it maintains large-scale fiscal transfers from the North to the South and earmarks 45 billion ecu in cash for enlargement countries.