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EU budget - in for a hard time

Posted by Richard Thursday, April 07, 2005

So obsessed are the media with the general election that, almost to a man (or person), they could find neither time nor space to review events across the channel today, and look to see what our real government is doing in Brussels.

The single exception was The Times business section which did at least notice that the commission yesterday unveiled its new budget proposals, offering the headline: "EU to triple R&D spend in attempt to rival US and Japan".

The spending plans are provisional and show the Commission’s ambitions as it heads into negotiations with EU member states. Overall, it has asked for a budget of 1.26 per cent of EU GDP

Anthony Browne, the Brussels correspondent, tells the story, outlining how the commission aims to "triple spending on research and development, transport and education in an effort to create jobs and revitalise the EU's struggling economy."

The €132.7 billion (£90.8 billion) pitch to raise competitiveness is, we are told, aimed at making the commission’s €1,025 billion spending plans for the years 2007 to 2013 more palatable to member governments, many of which have attacked them as too costly.

The budget also includes proposals to nearly quadruple spending on "culture, youth media and citizenship" to €2.5 billion over the seven-year period. This includes €207 million for a "citizens for Europe" programme to "foster co-operation between citizens and organisations from different countries who will meet to develop their own ideas and act in a European environment".

The EU also intends to more than triple spending on "freedom, security and justice" to €8.3 billion. The plans include a new EU border management agency, programmes to help illegal immigrants — such as "counselling for unsuccessful asylum seekers" (the only issues dealt with by The Daily Telegraph) — and a new fundamental rights agency.

Spending on health and consumer protection will be nearly tripled to €1.8 billion. The Commission is desperate to use its budget to show that it is no longer focused on the post-war problem of boosting agriculture but is helping to make Europe the world's leading "knowledge-based" economy.

The Times, also reports that total spending on agricultural subsidies, through the CAP, will decrease by three per cent. Nevertheless, this remains the single biggest area of expenditure, totalling €301 billion by 2013. However, because of the overall increase in the budget, agricultural spending will drop from about half the EU budget to less than a third.

Dalia Grybauskaite, the budget commissioner, is quoted, saying: "Today's proposals clearly reflect a shift towards growth and employment with a focus on knowledge-based activities such as research and innovation. The proposals offer a real added value for EU citizens and represent a good use of taxpayers' money."

José Manuel Barroso, President of the Commission, said: "The Commission's blueprint for investing in Europe’s future is complete. Europe must have the means to match its ambitions."

More can be found in the commission press release, which sets out the details in a helpful chart.

The commission has also set up its own dedicated website, which clearly borrows from Zanu-Labour, rejoicing under the title as it does, "Investing in our future".

"The future belongs to all of us and we need to plan for it," says the site. "In order to safeguard the way of life that European citizens are now accustomed to, it is necessary not only to think about which projects should be continued or started, but also how they will be financed."

What the commission is not saying, however – and neither is anyone else – is that we are seeing a subtle change of strategy in the commission's thinking.

Like everyone else – except the French – the commission is sick to the back teeth of being held to ransom over CAP spending. Thus, moving money over to research and transport (the two growth areas), is more than just the commission pushing for "more employment".

It is no coincidence that most of the greatest beneficiaries of EU R&D and transport spending – like Galileo and the ITER project (if it goes to Europe) – are the French.

What is happening here is a slow transition away from the CAP funding, into other areas of spending where the French will be equal or greater beneficiaries, in the hope that they can eventually be bribed into dropping opposition to CAP "reform".

Not content with just that, though, Grybauskaite is upping the ante, according to EurActiv, warning anyone who will listen of the consequences of a late agreement on the budget.

So concerned is the commission that it has even set out these consequences on its website, complaining that the commission presented its proposals in good time - two and a half years before the start of the next budget period. "The Council's multi-annual programme foresees political agreement this June. We must stick to this," it declares.

The chances of this happening, however, are next to nil and the commission is in for a hard time. But then, so is Tony Blair. The UK presidency is going to have to deal with the issue and he is going to be in the hot seat.