Brussels, 16/12/2003 (Agence Europe) - The Heads of State and governments from France, Germany, United Kingdom, Netherlands, Sweden and Austria have explained in a letter sent on Monday to Romano Prodi that EU budget spending in the next financial periods "should not supersede 1% of Gross National Income (GNI), including agricultural spending within the limits of the ceiling set by the European Council in October 2002" (see above). This political manoeuvre should allow these countries (net contributors to the EU budget, like Italy, Belgium, Luxembourg, Finland and Denmark, which did not sign the letter) to attempt to influence current arbitration at the European Commission on proposals for the next financial programming period. This request can also be interpreted as an attempt to put pressure on Spain and Poland, two days after the failure of the European Council's work on the constitution. The Head of the Polish negotiating team, Wlodzimierz Cimosczewics gave his reaction to the initiative of the six Member States by declaring that the EU "cannot work according to the principle of the carrot and the stick".
This letter provoked the wrath of Romano Prodi, who answered in a communiqué that with a budget ceiling of 1% of GNI, "it will quite simply be impossible to do what these Member States and the others expect from us". Prodi reiterated that the EU's objectives were to create the most competitive economy in the world, continue the development of Common Foreign and Security Policy (CFSP), protect external borders and manage immigration. The President of the Commission added, sarcastically, that "Miracles are not my forté and do not appear to be those of the Member States either". Mr Prodi also asked whether the request of these countries reflected "the level of responsibility" that they sought to give the enlarged Europe. EUROPE can indicate that during its discussion on the preparation of the communication on the next financial framework, the Commission presented several options for spending ceilings (1.02%, 1.1%, 1.15%, 1.24% and 1.3%, see EUROPE 31 October 2003 p 5). A draft communication drafted by Mr Prodi has already stressed that the EU wanted to set out new objectives (Lisbon, Göteborg) and that it would be necessary to set the ceiling of financial perspectives above the current spending level.
In the letter, the six countries explain that, "with regard to the demographic challenges facing Europe, high and sustained growth demands long term healthy finances and the taking into account of the efforts demanding consolidation from Member States. Our citizens will not understand why the Community budget is exempted from this rigorous process". They also added that, "in this context, it does not appear possible to have an EU budget close to the current ceiling of own resources". According to these countries, spending on average over the next financial periods should be "stabilised around the current level of spending and should not supersede 1% of Gross National Income (GNI), including agricultural spending, in the ceiling limits set out by the European Council of 2002". According to the six Member States, "this will provoke annual increases in EU budgets that are higher than the growth rates of the national budgets of most countries and will create a sufficient margin for implementing policies in the enlarged Union". The countries emphasise that the Commission proposal on new financial perspectives "ought to reflect this approach",
Diplomats from countries that signed the letter outlined that an EU budget of the equivalent of 1% of GNI would not constitute an actual reduction in the budget, given that the level of spending over recent years was between 0.90%-0.98%. These countries are not calling for a reduction in the ceiling of own resources, which remains fixed at 1.24%. According to the latter, a budget corresponding to 1% of GNI should allow for (taking into account economic growth expected over the next financial perspectives) growth in commitment appropriations of 2% in value and an almost two-fold increase (4%) in payment appropriations. Such a growth rate will be twice that imposed on Member States' budgets due to rules of the stability and growth pact, explain these Member States, which also consider that such an envelope is compatible with the funding for efforts necessary for solidarity in the enlarged Union, as well as for developing common policies.
In Strasbourg the President of the Greens/EFA group, Daniel Cohn Bendit, described the letter from the six Member States as "ridiculous". He explained that if what they were proposing could work, it would be "damaging" but given that it could not work, it was "ridiculous" as there was a lot of work to do, as well as the growth initiative to fund. Alain Lamassoure (UDF) considered that, "there will be no agreement on the financial perspectives if we do not settle them by using the Convention method". According to Lamassoure, as long as we do not proceed to setting up "genuine own European resources" instead of contributions calculated on GDP, national egos will continue to be played out".