Highly sensitive public opinion. The two documents approved by the European Commission last week (one on the future of cohesion policy and the other on funding the process of getting candidate countries ready to join the EU) are connected in the financial sense, of course, and mark the beginning of the real battle over the European Union's future expenditure. The Commission has separated out the various issues and kept the expenditure between now and 2006 under the current financial framework separate from the financial framework for the following period. But it's clear that everyone is already worrying about the impact of the current decisions on the more distant future (the impact is obvious for the gradually increasing agricultural payments to candidate countries). For several reasons, these discussions are both extremely important and highly charged:
Public opinion in some Member States is particularly sensitive about all aspects of funding the EU. In net contributing countries, some politicians and journalists created the widespread feeling a few years ago that it was mainly German and Dutch money funding a lazy, spendthrift and occasionally dishonest Europe. Neither improving the balance (by cutting the net contributions of some and the net receipts of others) nor proof of the advantages for all Member States of being part of the Union have been able to completely wipe out such false impressions and myths;
The desire by some politicians to scrap most of the Common Agricultural Policy and European regional policy. The budget is the best weapon to use in this connection and we have already had a foretaste at the European Parliament of the debates that lie ahead;
The general economic situation and difficult budget facing various Member States. The EU calling on countries to both cut their spending and increase European spending is not easily accepted and is seen as contradictory.
Respecting the 1.27% ceiling. Against this difficult political and psychological situation (and other restrictions that I will not outline here), the Commission has pointed out the absolute necessity for European activity to be effective and capable of preserving the future, namely the significance and benefits of reunifying the EU by extending it to east and central Europe; the promises made to countries in the east and centre; the political, economic, environmental (etc) impact of the Common Agricultural Policy; and the reasons why a genuine cohesion policy is required rather than a simply gesture of solidarity towards the most underprivileged regions of Europe. At the same time, however, in order to make this convincing, the Commission has to prove that Europe's money is not being wasted and that expenditure is being closely monitored.
This is why I think it is important that the Commission has let it be known (through its President) that the policies it recommends and the budget it is currently requesting will not lead to raising the ceiling of EU resources that has been set by EU heads of state at 1.27% of EU GDP. Numerous politicians and scientific and academic milieu believe this is too low, as apparently do a number of European Commissioners. But it would be a wise move to keep spending at this level for the moment (the ceiling has never actually been reached to date so there is plenty of room for manoeuvre) with no increase being put forward, since it is now up to the Convention to express itself about the future of Europe (how much Europe costs will vary widely in terms of the level of federalism decided upon). It is not for the Commission to express itself ahead of the Convention through financial guidelines, although it is advisable and desirable for the Commission to have views on the subject. Michel Barnier, European Regional Policy Commissioner (also responsible for institutional reform and, along with Mr Vitorino, member of the Convention) personally feels that the future cohesion policy needs 0.45% of GDP if it is to be effective, explaining that the figure is based on objective factors (see next page). After hesitating a moment in answer to a question, he said that this could be achieved without breaking through the overall 1.27% ceiling.
The two important Commission documents (on the financial framework for enlargement in 2004-2006 and the cohesion policy) are based on respecting the budget ceiling set by the Summit. Since this point has now been won, the actual substance of the two documents deserves consideration.
(F.R.)