Monday, April 25, 2005

Budget woes

To add to the woes of already stressed-out politicians, foreign ministers of the EU member states are meeting today in Luxembourg with the vexed subject of the EU budget firmly on the agenda.

Still on the table is the commission proposal that spending for 2007-2013 should be increased to 1.14 percent of Gross National Income, rising from the current £77 billion to £89 billion in 2007 and thence to over £100 billion by the end of the period.

Ministers are also having to deal with a fractious Poland which has already rejected the commission’s proposals, objecting to the ceiling on structural funds which would be set at 3.8 percent of a member state's gross domestic product (GDP).

This is instead of the four percent currently allowed, meaning EU aid to Poland would decrease.

Luxembourg foreign minister Jean Asselborn has said that a budget compromise would be reached "inevitably by reductions in each spending category compared to the commission's proposal".

Overshadowed by uncertainties on the constitution ratification, ministers are unlikely to make any decision today, and will leave the hard issues until after the Dutch referendum. This means that there will be only two weeks for talks ahead of the European Council on 16-17 June, by which time a deal is supposed to be reached.

However, if the heads of state and government are confronting one or more "no" votes, talks then are likely to be dominated by plans to deal with this situation, creating an atmosphere which is not conducive to an agreement on a matter so contentious as the budget.

The chances are, therefore, that the new British prime minister will inherit the poisoned chalice, most likely Tony Blair, who will have the added task of defending the rebate negotiated by Thatcher in 1984.

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