EU ministers gear up for budget clash

20th January 2004, Comments 0 comments

20 January 2004 , BRUSSELS - European Union finance ministers headed for another bruising financial clash with the European Commission on Tuesday after four more countries joined demands by six of the blocs richest nations for a freeze in the EU budget. German Finance Minister Hans Eichel told reporters Ireland, Italy and Slovenia now backed earlier calls from Germany, France, Britain, Austria, Sweden and the Netherlands for EU spending to be capped at one per cent of Gross Domestic Product (GDP). Diplomat

20 January 2004

BRUSSELS - European Union finance ministers headed for another bruising financial clash with the European Commission on Tuesday after four more countries joined demands by six of the blocs richest nations for a freeze in the EU budget.

German Finance Minister Hans Eichel told reporters Ireland, Italy and Slovenia now backed earlier calls from Germany, France, Britain, Austria, Sweden and the Netherlands for EU spending to be capped at one per cent of Gross Domestic Product (GDP).

Diplomats said Finland was now also demanding curbs on the blocs expenditure.

"The Commission must not ask too much financially from member states," Eichel told reporters after a meeting of EU finance ministers.

Countries like Germany and France were already under fire from the EU Commission for allowing their national budgets to go into deficit and could not afford to contribute more to the blocs joint coffers, he added.

"It is completely unacceptable to increase EU spending," agreed Austrian Finance Minister Karl-Heinz Grasser.

British Chancellor of the Exchequer Gordon Brown also insisted that at a time of hard budgetary choices for governments, "it is vital that a reforming EU shows that it too can exercise budgetary restraint."

Following close on the heels of the Commissions decision to take finance ministers to court over flouting of the eurozone stability pact, EU finance chiefs tough stance on the budget sets the scene for another confrontation between governments and the European Commission which is demanding more money from governments.

"I have a duty to the future of the organization to defend it against any cuts," European Commission President Romano Prodi said earlier this week.

With the bloc set for the biggest enlargement in its history, the Commission chief said it was "an odd moment to propose lowering the ceiling on the EU's own resources (budget) to one per cent, as some member states have suggested."

It was important that EU institutions had the resources to fund new policies, Prodi insisted, adding: "We are asked to increase our prosperity, we are asked to strengthen the competitiveness of our firms, we are asked to meet the demands of our citizens for more security, freedom and justice, we must satisfy their concerns about the environment public health and food safety."

Current EU spending is set at 1.24 percent of GDP but the blocs actual expenditure is no higher than 1 percent of GDP, say officials.

However, with 10 new members set to join in May, officials in Brussels say there must be no move to slash the existing spending threshold.

The Commission will present its assessment of the blocs budget needs for 2007-2013 in early February.

But approval of the budget also requires endorsement by the European Parliament and approval by governments.

DPA
Subject: German news

 

 

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