Friday, February 25, 2005

Budget blues

Yesterday, as everybody knows, the finance ministers of the 25 EU member states got together for their monthly council meeting. And, unlike Bush, happy they were not - on the agenda was that singularly awkward issue, next "multiannual" EU budget.

Dominating the meeting was the Lithuanian, Dalia Grybauskaite - aka the EU budget commissioner – who rapped the richer "old" members of the Community over the knuckles for being too greedy in wanting to keep on to their regional aid allocations.

Grybauskaite, a trained economist who studied for her PhD in the Moscow Academy of Public Sciences, also risked the wrath of l'escroc, in suggesting that pressure was mounting for a limited reopening of the controversial deal to fix farm support until 2013, brokered by Chirac in 2002.

Her Soviet training must have come in handy as the meeting was apparently beset by "fierce haggling" over the seven-year EU budget. However, Dr Grybauskaite clearly survived the experience, emerging to say that "the chances are increasing" that member states could reach a deal at the European Council in June.

Taking a highly un-Soviet-like stance, Grybauskaite had actually criticised her own commission's regional aid plans, drawn up by Michel Barnier, the former EU regional affairs commissioner, thus highlighting the debate about the distribution of the proposed €338bn regional budget between rich and poor countries.

According to the Financial Times, she said the original proposals would give 51 percent of the regional package to the EU's 15 older members while the relatively impoverished remainder would only 49 percent of the spoils. You can see the economist at work there.

The lady believes this is "difficult to defend", which is something of an understatement, but she is up against Spain which is determined to keep its share of the loot. To get past this blockage, Grybauskaite is going to need all her skills, and more.

However, just to make sure she has as many enemies as possible, the commissioner has also taken on the issue of Britain's rebate - worth an average of €4.6bn a year - declaring that it was "no longer justifiable... There is a new situation and the reasoning for the rebate has changed," adding, "We understand we need to find a solution which isn't hostile to the UK, or makes it difficult for the UK to sign up to a new package."

She has a lot to learn.

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