EU budget battle begins with spending rise request

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The European Union's executive arm requested on Wednesday a nearly five-percent increase for the 2012 EU budget, setting up a pitched battle with cash-strapped states demanding austerity.

EU budget commissioner Janusz Lewandowski described the request as "a delicate balancing act combining austerity and growth boosting measures for 500 million Europeans" but acknowledged that "tough negotiations" loom.

With EU states cutting their own national budgets to tame a debt crisis, the 6.2-billion-euro increase to 132.7 billion euros ($191 billion) requested by the European Commission immediately drew sharp responses.

"A 4.9-pct increase would not be acceptable to us," a British government spokesman said. "Working with others (states), we will look to get the very best deal possible for the tax payer."

Dutch Finance Minister Jan Kees de Jager said the EU's spending proposals "are out of proportion."

De Jager added: "How do we explain to our citizens forced to tighten their belts that the European budget continues to grow?"

British Prime Minister David Cameron has led a campaign against EU spending and has been joined by France, Germany, Finland and the Netherlands in pushing for a freeze from 2012. The five countries pay for half the EU budget.

The EU Parliament and governments already went through hard bargaining for the 2011 budget which went down to the wire last year. Lawmakers wanted a six-percent budget increase; in the end they settled for 2.9 percent.

"We are asking for the European budget the same effort being imposed for national budgets, which is the stabilisation of spending," French Prime Minister Francois Fillon said during a Brussels visit on March 14.

Defending the draft budget, Lewandowski said the commission slashed spending for programmes that have not performed well.

Some three billion euros were cut from some programmes and redirected to projects that underpin employment and foreign affairs, he said.

For instance, funding for the long-delayed Galileo satellite navigation system would be cut by 24.9 million euros.

But the EU executive requested an 8.4 percent increase to 45.1 billion euros for its structural and cohesion fund, a vehicle used to help the development of Europe's poorer regions, notably in the former communist bloc.

Lewandowski also stressed that the EU has legal commitments to fund programmes launched in 2007 and failing to pay for them could expose it to lawsuits.

"We cannot punish our citizens, companies, local and regional authorities who have a right to get their bills paid," the EU budget chief said.

He cited an electric interconnection project between Britain and Ireland, noting that the 2012 bill will amount to 24 million euros, more than twice as much as last year.

While spending for regions is rising, Lewandowski said the commission was freezing its own administrative spending and would not request new positions for the third year in a row.

The EU Parliament is not following the same example. With Euro MPs refusing any cuts to their budget, the spending request for European institutions represents a 100-million-euro increase to 8.2 billion euros.

© 2011 AFP

1 Comment To This Article

  • Jimmy Anderson posted:

    on 20th April 2011, 14:48:50 - Reply

    EU is giving examples of a million here a million there being spent here on a project, but that does not account for the BILLIONS spunked up the wall or the HUGE increase in budget. I guess that 'European museum' and other white elephants have to be paid for......