Mr Juncker's prudence. While the European Commission draws up the texts which will govern the future of the Stability Pact and all the institutions prepare themselves for realising the review of the Lisbon Strategy, attention is being focused on the third challenge of the Luxembourg Presidency: the political agreement on the financial perspectives 2007-2013. Jean-Claude Juncker, the master builder behind the operation as President of both the Ecofin Council and the European Council, has never hidden the fact that it is by far the most difficult and ambitious challenge Asked about this issue in an enlightening exchange of views three weeks ago with members of the national parliaments of the Member States, Mr Juncker declared that he “does not believe” that either of the two positions already officially tabled will be retained: neither the European Commission's proposal, nor the position of eight Member States who think that Community expenditure should not exceed 1% of the Union's GDP. If there is to be a compromise, it will be somewhere between the two, but “not in the middle”: Mr Juncker distrusts the simplistic solution of simply cutting matters in half in this way. Bu the refused to indicate whether he sees the potential compromise closer to the 1% or closer to the Commission proposal, adding that we should not expect any predictions from him. He would not be presenting any compromise proposals before June. To those members of national parliaments who insisted on knowing more, he said that if he were to make a prediction, it would be rejected before it was even out of his mouth.
The starting point. Here is what little it is possible to say at the moment about the dossier on which the ambitions and reality of Europe over the next decade will depend:
Finishing in June. The European Council in December last year accepted the principle of
reaching a “political agreement” in June, without which it be impossible to prepare and approve the new regulations in time, notably on regional policy and cohesion. The Union would be blocked. Added to this is the fact that the United Kingdom, who will preside over the Council (and therefore also the Summit) in the second semester, does not want the final phase of negotiations to take place under its Presidency so that it will not carry the responsibility for drawing up the final compromise. The government in London would prefer to have its hands free to negotiate the British rebate.
A few accepted principles. Last December, the European Council also approved the results
of preparatory work undertaken under the Dutch Presidency, notably on: a) confirmation of the ceiling for own resources of the EU at 1.24% of the overall income of the Union; b) maintaining solidarity (alongside subsidiarity and proportionality) among the principles to be respected; c) the demand that the new financial framework should provide the necessary finances to confront the disparities in development levels between new and old Member States; d) rejecting the Commission suggestion to introduce new measures on budgetary flexibility; e) continuing consideration of the introduction (proposed by the Commission) of a “generalised correction mechanism” to confront excessive imbalances between net contributions to the budget. At first glance, the idea of a mechanism which would apply to all Member States in a position of excessive imbalance (instead of the current mechanism which was made-to-measure for the UK) seems reasonable.
The Summit of 22/23 March devoted just one sentence to this problem. Here it is: “the financial perspective for 2007-2013 will have to provide the Union with adequate funds to carry through the Union's policies in general, including the policies that contribute to the achievement of the Lisbon priorities” (paragraph 7 of the Presidency conclusions).
Avoiding linear reductions. Negotiation methods will consist of firstly defining what the twenty-five want to do together; in a second phase they will endeavour to define the contributions necessary and only in the final phase will they negotiate sharing the burden among the Member States. What several governments want to avoid is a linear evening out of the contributions proposed by the Commission. In some areas, expenditure could be spaced out, in others a sudden influx of resources could create problems with absorption and thereby risk waste; it is therefore possible to make savings. But in some cases, as for example the European transport networks, a drastic reduction in contributions would radically compromise the results of the action planned. (F.R.)