Brussels, 24/02/2005 (Agence Europe) - If an agreement is reached in June on the European Union's financial perspectives for the period 2007-2013, the areas of the budget that are “not protected” by earlier agreements will “be under pressure for cuts”, European Budget Commissioner Dalia Grybauskaité warned during a debate organised on Thursday by The European Policy Centre (EPC). As CAP spending (except for rural development spending) is the only spending reinforced by the future financial perspectives (by the European Council in December 2003), this would, the Commissioner says, mean that the Community budget would return to the “structure of the last century” with a large part devoted to “direct payments under CAP”, Ms Grybauskaité warns. She asks: What Member State would take on the responsibility of sacrificing future policies that it has itself advocated? The question of timing is practically as important as the substance of the agreement to be reached, Ms Grybauskaité repeated, recalling that, if one does not reach a political agreement in June, then there will not be the necessary legislative instruments for implementing programmes, on which Member States are very keen. If there is no agreement in June, she stressed, “We cannot execute half of the budget”. At the same time, she admits that the financial framework is “very difficult to negotiate”, mainly because of the economic environment which is “not the best”, the ratification process of the European Constitution underway in Member States, and also because there will be “a lot of elections”. An agreement reached later will not necessarily be better, she warns, regretting that she would have preferred to discuss priorities first of all, then the expenditure ceilings, but the Member Sates tend to do the “reverse”. (See EUROPE of 22 February, p.8, on the subject of the discussion at the General Affairs Council on the “competitiveness” chapter of financial perspectives).
On the subject of ceilings envisaged for the period 2007-2013, Ms Grybauskaité recalls that the Barroso Commission took up the July 2004 proposals by the Prodi Commission (ceiling reaching 1.14% of Gross National Income), as it shares the priorities set out, while adding: “figures can of course be discussed. The result will be different” for these proposals and “we need to find something in the middle to preserve what must be preserved”. The Commissioner said “our discussion on ceilings is somewhat semantic”, noting that the six Member States that want to place a 1% of GNI ceiling on the budget have never specified whether they mean commitment appropriations or payment appropriations, when, depending on which one considers, there would be a difference of 10%. Ms Grybauskaité sees at this stage in the discussion three groups of States (albeit “not strictly organised”): the Six (which, however, do not agree between themselves when it comes to deciding where cuts in appropriations should be made), those who approve the Commission's proposal, and those who already ask for more (for example, 1.2% of the GNI).
Regarding the problem of the “UK rebate”, Ms Grybauskaité admits that the generalised correction mechanism proposed would be very difficult to mange and “not very transparent”. A compromise solution must be found, she stressed, that does not come up against the hostility of any Member State.
EPC suggests restricting generalised correct to agricultural spending
Ideas Factory Europe, an initiative of the EPC, suggests in a brochure entitled “A fair solution to the UK rebate conundrum”, that the perverse result that may arise from a generalised correction mechanism could be avoided by introducing, instead, a correction mechanism that is limited to a specific category of expenditure. According to the author, Giovanni Grevi, given that it is agricultural spending that entails unequal treatment between countries having a similar level of prosperity, the mechanism should be restricted to correcting an excessive imbalance between, on one hand, the share of a Member State in the Union's GNI and, on the other, the share of the same Member State in agricultural spending for direct payments. Furthermore, the countries eligible for the Cohesion Fund could be partially excluded from financing the mechanism.