Germany undermining EU budget deal: Juncker

25th May 2005, Comments 0 comments

25 May 2005, BERLIN/BRUSSELS - European Union leaders are unlikely to cut a deal on the bloc's new budget amid Germany's refusal to consider further increases to its contribution, Luxembourg's prime minister Jean-Claude Juncker said on Wednesday.

25 May 2005

BERLIN/BRUSSELS - European Union leaders are unlikely to cut a deal on the bloc's new budget amid Germany's refusal to consider further increases to its contribution, Luxembourg's prime minister Jean-Claude Juncker said on Wednesday.

The 25-member European Union (EU) is supposed to reach agreement on annual spending for the period 2007 to 2013 at its 16-17 June summit in Brussels.

But Juncker, whose country holds the rotating EU presidency through the end of June, poured cold water on this idea.

"It is less and less do-able, above all because of the announcement of German elections in September," said Juncker in an interview with the Belgian newspaper Le Soir, adding: "I think that our (EU) presidency will end badly."

German chancellor Gerhard Schroeder, who called early elections after the SPD suffered a big defeat in regional voting at the weekend, will hardly be in a position to offer more money to the EU while fighting a tough re-election campaign.

In Berlin, Schroeder's chief spokesman Bela Anda insisted the government would not budge from its demand that Berlin not pay more than its present maximum rate of 1 percent of the collective Gross Domestic Product (GDP) of all 25 EU states.

This, Anda stressed, was "non-negotiable".

But Anda pointed out that paying the full 1 percent would mean Germany's projected annual contribution to Brussels would rise to EUR 32 billion annually in 2013, up from the present EUR 22 billion.

"That's a compromise," said Anda.

Germany, which has Europe's biggest economy, is already the EU's top paymaster and contributes about 20 percent of the bloc's annual budget of just over EUR 100 billion - most of which is spent on farm subsidies and aid for poorer regions.

In the past, EU budgets have only been decided after all-night haggling such as the 1999 Berlin summit, where leaders met for 28 hours straight before Chancellor Schroeder gave in to French demands on increased German spending.

A more experienced Schroeder appears determined not to cave in a second time - especially given that he badly trails Germany's opposition conservatives in all opinion polls in the run-up to general elections expected on 18 September.

DPA

Subject: German news

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