Verheugen: Germany will link cash and constitution

By Dana Spinant

Date: 18/12/03

WITHOUT a deal on the constitution, Germany will find it difficult to agree on the EU's future spending plans with other member states, Enlargement Commissioner Günter Verheugen has warned.

"The view in Berlin is that it will be hard to agree on the next financial perspectives if the decision-making system is not clear," he told European Voice yesterday (17 December).

Verheugen, speaking in the wake of last weekend's abandoned Brussels summit, at which Poland and Spain blocked a deal on the constitution, made it clear that the German government sees a direct political link between the constitution and talks on expenditure for 2007-2013.

The comments by the commissioner, who is close to Chancellor Gerhard Schröder and likely to be reappointed to the next Commission team, will fuel misgivings among those who have warned that negotiations over power-sharing and the budget should be kept strictly separate.

His remarks come against the backdrop of the "letter of the six" to Romano Prodi, in which the leaders of Germany, France, the UK, Netherlands, Sweden and Austria called on the Commission president to cap the Union's budget at 1% of gross national income (GNI). The letter from the chief contributors to the EU's coffers, dispatched just two days after the summit, sent shock waves across the Union.

Given that the main victims of the budgetary cut would be Spain and Poland, the move was seen by many as "retaliation" by Germany and France.

Verheugen insists that was not the intention.

"We should not see it as a punishment," he said, adding that the letter's publication was deliberately delayed until after the summit to avoid lending credibility to such a suggestion.

Verheugen also said the EU should not be regarded as a mere "cash-machine".

"The core issue is not the distribution or redistribution of money. What is missing in the EU is not money, but political will, to have a more effective common foreign and security policy, and a stronger common policy on the budget and coordination of economic policies.

"These two elements are crucial," he said.

Verheugen argued that a cut in the EU's budget should not affect the ten mostly former communist countries due to join the Union next May.

Nine of those countries won referenda, based on people's assumption that Europe would help improve their lives, he pointed out.

"Morally, the promises must be maintained. If we must prioritize, then money should go first to the new member states."

The commissioner admitted that without payouts from Brussels, the newcomers would not be able to catch up with their richer western neighbours. The Union would then risk having two classes of citizens.

Verheugen's German colleague, Budget Commissioner Michaele Schreyer, has rejected a reduction in the EU budget. "I hear some member states saying that, in the future, the budget should be only 1% . . . this cannot run," she said, adding that the EU must strengthen its budget to meet the challenges ahead, such as improving its economic performance and boosting freedom, security and justice. "1% of gross national income is, for the broad union, not durable, especially since the expenditure for agriculture has already been determined."

Romano Prodi warned the six countries demanding cuts: "Miracles are not my speciality and they don't seem to come easily to member states, either. With only 1% of GNI it will simply not be possible to do what these member states - and all others - expect from us."

Interview with Günter Verheugen, European Commissioner for Enlargement, in which he explains that the German Government sees a direct political link between the Constitution and talks on expenditure for 2007-2013.