Luxembourg, 08/10/2002 (Agence Europe) - The EU Economy and Finance Ministers did not manage to move forward on the issue of enlargement financing during their meeting on Tuesday in Luxembourg, under the chairmanship of Thor Pedersen. The Ecofin Council confirmed the divergence that had appeared during the last General Affairs Council regarding the payment of direct agricultural aid and structural funds, as well as the divergence over the method of calculating possible budgetary compensation in favour of future Member States. The Ecofin Council did not adopt the conclusions proposed by the Presidency which included the following elements: - early payment, in 2004, of 4% of the funds under structural actions; - gradual granting of direct agricultural payments (according to the approach adopted by the Commission) and compensation for deterioration in the balance of financial flows compared to the situation during the year prior to enlargement.
The four cohesion Member States (Spain, Portugal, Ireland and Greece) and the Commission recalled that they would not accept early payment of the structural action credits, the former because they fear undermining the principle of non-discrimination, and the latter for legal reasons (according to the regulation, no payment must be made the first year of accession). The Commission also insists that about 18 months are needed between the time when the first programmes are launched and the kick-off for payment of funds. Germany and the Netherlands restated their reserve on payment of direct farm aid and announced, with other net contributors to the budget, that they were reticent about compensating for the negative balances of future members.
The Danish Presidency, for its part, does not wish to review its compromise proposals that it considers still valid and recalls that the European Council in Brussels, on 23 and 24 October, must decide on the amounts to be included in the budget from 2004 to 2006 for the new Member Sates in the field of direct aid and structural funds and the method to be used for calculating eventual budgetary compensation.
The dossier will be on the table of the General Affairs Council for the last time on 22 October before being forwarded the next day to the Heads of State and Government. The Presidency hopes the General Affairs Council will manage to reach an agreement on the method of calculating budgetary compensation, while the two other, more political issues, should be settled at the highest level.
The Danish Presidency is almost convinced that its approach for structural aid (payment of 4% from 2004) will be adopted, since a majority of Member States is in favour.
Without adding possible budgetary compensations, this method would enable Poland to confirm its position as net beneficiary from the Community budget, receiving 1.773 billion euro in structural aid in 2004 (against 1.585 billion euro according to the initial methodology chosen by the Commission that provided for no payments that year) and up to 2.6 billion euro in 2006. Early payments of appropriations for structural measures would, in 2004, improve the uncomfortable budgetary situation of the Czech Republic, Slovakia and Malta, which would be net contributors to the Community budget. However, even with this new method, four countries would continue to pay more than they receive in 2004 (without compensation): Cyprus (-63 million euro), the Czech Republic (-136 million euro), Slovakia (-120 million euro) and Malta (-24 million euro); whereas five countries (these four plus Hungary) would in 2004 find themselves in a less favourable financial situation than in 2003, the last year before accession.
The Presidency proposes opting for the amounts proposed by the Commission for the payment of direct agricultural aid (20% in 2004, 25% in 2005 and 30% in 2006) that will really begin in 2005, or over 8.4 billion euro for the period 2004-2006: (1) 1.227 billion euro in 2004, 635 million of which for Poland, 155 for Hungary, 143 for the Czech Republic, 107 for Latvia, 62 for Slovakia; - (2) 3.049 billion euro in 2005, with 1.5 billion for Poland, 486 million for Hungary, 379 million for the Czech Republic; (3) 3.796 billion euro in 2006, 1.9 billion of which for Poland, 590 million for Hungary, 453 million for the Czech Republic, 291 million for Latvia.