Brussels, 05/11/2012 (Agence Europe) - The initial Cypriot presidency compromise on the multiannual financial framework for 2014-2020 includes at least another €50 billion in savings, compared to the Commission's preliminary proposal. It has provoked criticism from member states for sometimes diametrically opposed reasons (see EUROPE 10722). At the discussions that took place on Wednesday 31 October at Coreper (Committee of Permanent Representatives in the European Union), so-called “net contributor” countries to the EU budget and the friends of “better spending” (Germany, United Kingdom, France, Finland, Denmark, Sweden and the Netherlands) called for further reductions, with a certain amount of discretion shown towards policies that are going to suffer the bulk of these cuts. On the other side, “friends of cohesion” countries (Spain, Portugal, Greece, Slovenia, Hungary, Poland and Slovakia etc.) were particularly scathing of reductions made in the field of Cohesion Policy. Several countries, including France and Spain, also opposed the gradually decreasing amount of agricultural aid proposed in the negotiating toolbox for the 2014-2020 financial framework. Bilateral meetings with EU countries are taking place this week.
Germany, Denmark and Finland have called for the 2014-2020 budget to be annually capped at 1%. Germany referred to a €130 billion reduction in spending initially proposed by the Commission (the latter proposed €1,033 billion for 2007-2013). France considers that further spending cuts are required than proposed in the Cypriot compromise. Sweden called for €150 billion in cuts and the Netherlands advocated a €100 billion cut in payment appropriations. The United Kingdom spoke of further cuts.
Spain does not agree that major policies (CAP and cohesion policy) should be subject to cuts when they have already been made use of in the Commission's initial proposals. Spain spoke in favour of including European Development Funds (EDF) in the EU budget.
Cohesion Policy. Germany, the United Kingdom, Denmark and Sweden believed further reductions were necessary in section 1b of Cohesion Policy. Germany said that much more significant reductions could be carried out in the following areas: reducing the envelope granted to transition regions by reintroducing the “reverse safety net” and setting a 2% cap (as opposed to the 2.36% cap in the Cypriot compromise) in cohesion policy fund donations. The United Kingdom underlined the need to focus funding on the poorest countries and regions.
On the subject of macro-economic conditionality (the suspension of funds to countries that infringe Stability Pact rules), Italy voiced its opposition against the double ceiling. Spain described this macro-economic condition as unjust and asymmetrical, saying that it risked introducing penalties on two fronts.
Europe's interconnection. Italy, Belgium, Austria and some Baltic countries criticised the reductions in funding proposed by the presidency in the European interconnection mechanism.
Agriculture. France, Spain, Hungary, Romania, Greece and Ireland opposed the cuts proposed to agricultural aid to farmers. Italy, Belgium, the Netherlands and Malta referred to the problems they were having with the proportional convergence funding method. These countries have most to lose with these modalities in the new aid distribution between the member states.
Revenue. The United Kingdom pointed out that its position had not changed on own resources and the British rebate. This delegation said that the tax on financial transactions (TFT) would create a problem if it were the basis for own resources in the EU budget. Spain opposed the correction mechanisms and Italy pointed out that, together with France, it was contributing most to the British rebate.
Budgetary flexibility. The United Kingdom and other net contributor countries criticised the fact that there was a possibility of including (by way of introducing greater flexibility into the budget to tackle unexpected requirements) a “contingency margin”. (LC/transl.fl)