EU ministers start talks on under-fire budget

28th July 2011, Comments 0 comments

European Union ministers Thursday began efforts to thrash out the 27-nation bloc's 2014-2020 budget, as austerity-focused governments challenged Brussels' planned spending hike.

The two-day meeting, called by Poland which currently holds the EU's rotating presidency, paves the way for an October summit in Brussels.

"Discussions are going to be what in diplomatic jargon we call 'frank'," Mikolaj Dowgielewicz, Poland's EU affairs minister, told reporters in the Baltic resort of Sopot.

"I think this will be constructive, albeit heated. As we hold the presidency, we'll be doing what we can to achieve concrete results. But this is still the beginning of a tough negotiating process," he added.

At the end of June the European Commission -- the EU's Brussels-based executive body -- unveiled a draft budget.

It included a five-percent rise from the previous seven-year financial cycle, lifting spending to 1,083 billion euros ($1,570 billion).

The plan came under immediate fire.

Two of the bloc's "big three" powers, Britain and Germany, were among the most vocal critics, insisting that Brussels show frugality in the current, harsh economic climate.

In Sopot, Germany's EU affairs minister, Werner Hoyer, hammered home Berlin's concerns.

"In view of the situation of the national budgets, I see the necessity of a freeze, and not an increase," Hoyer said.

"This proposal goes beyond the financial limits of practically all member states. I think it's necessary in all countries to clean up the budgets and to come to strict austerity measures. And in these circumstances, it is difficult to envisage an EU budget increasing," he said.

Budget battles are an EU tradition.

"It is always the same ritual. The commission comes with a very ambitious proposal and then it is necessary to bring it to a realistic level," Hoyer said.

EU budget chief Janusz Lewandowski, a Pole, defended Brussels' stance.

"It's important that member states consider this a realistic proposal -- and a good starting point for negotiations -- which can be filled out, debated and changed, but not overturned," Lewandowski said.

"It's clear that we're expecting talks to be particularly tough, given the current climate in Europe, which has never been so bad and riven with self-interest," he added.

Poland and other ex-communist nations that have joined the EU since its 2004 "big bang" expansion from 15 members are locked in austerity drives.

Their priorities include protecting EU funds that help poorer members catch up with richer nations, and a level playing field for their farmers, who they argue do not get a fair slice of EU money for the sector.

The budget plan redefines EU priorities, reducing farm funds in favour of infrastructure investment and the greening of Europe -- with a strong focus on cross-border energy, telecoms and transport grids to streamline economic integration in the world's biggest market.

Controversially, it foresees an EU sales tax and financial transactions tax to help Brussels raise its own funds rather than depending on member states for the bulk of the money.

Brussels says the sales levy, representing one or two percentage points of national value-added tax, and the transactions tax, worth an annual 30 billion euros, would bring in 40 percent of EU revenue.

© 2011 AFP

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