Britain cops veiled flak for EU budget breakdown

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European Commission President Jose Manuel Barroso on Tuesday hit out at "a small number" of EU states for gunning down the bloc's 2011 budget in an indirect attack on Britain, Holland and Sweden.

"Those that think they have won a victory over 'Brussels' have shot themselves in the foot," Barroso said in a terse statement issued after the midnight collapse of talks to produce a working budget for the year ahead.

"I regret that a small number of member states were not prepared to negotiate in a European spirit," Barroso added.

The collapse in talks between the 27 member states on the one hand, and the European parliament on the other, leaves the bloc of half a billion people with no 2011 financial plan in place, and with key new agencies left hanging by a thread.

Britain publicly campaigned against a bid by the newly reinforced European parliament to increase its say in European Union budgetary affairs, and numerous political and diplomatic sources said the Netherlands and Sweden were strongly onside.

"They should know that they have dealt a blow to people all over Europe and in the developing world," the Commission president said.

"This is not a budget for 'Brussels'. It is the beneficiaries of EU programmes -- citizens, businesses, towns, cities, regions and rural communities -- who will feel the impact of this failure to reach agreement."

The collapse of the budget talks will likely trigger a funding freeze lasting months for key investments, EU Budget Commissioner Janusz Lewandowski said earlier.

Some diplomats and MEPs said an agreement might be in place by year's end.

Under EU rules formulated in the Lisbon Treaty, funding will be provisionally frozen at 2010 levels -- 123 billion euros (170 billion dollars) -- until the lengthy process of negotiating a new budget is completed.

"This will delay the financing of important initiatives and investments in the member states: some 90 percent of the EU budget finances investments which create growth and jobs," Lewandowski said.

"Measures to boost economic growth and research and development in our member states will be delayed.

"This is highly regrettable; we will immediately start working on a new draft budget with the view of having the (member states) and the parliament reach a compromise on it in the shortest possible span of time."

The 27 EU states, many of whom are implementing painful austerity measures at home, had reluctantly agreed to a 2.91 percent increase next year to the bloc's current budget.

But EU lawmakers wanted to exercise some of their greater powers under the bloc's new Lisbon Treaty which came into force in December 2009 to gain more influence over future EU income models and spending priorities.

© 2010 AFP

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