Taking the leaks into account. Jean-Claude Juncker refused to provide even approximate figures on his first draft compromise on the financial perspectives 2007-2013, stating that any sum that's published too early is inevitably doomed to rejection, by those who think it's too high and those who think it's too low alike. He made no attempt to hide his bad mood at how the first debate went at the General Affairs Council, which, on 25 April, was given over to “cohesion policy”, voicing a few considerations the other heads of government might like to take on board (see this column in our bulletin 8938), but mentioned no numbers. Not everybody, however, followed his example of discretion, and percentages were bandied about and even published. So what are we to do? Respect the orders for silence, or report the leaks, which are pretty much unbiased? I don't think there's any point pretending, because an overall view is preferable to the isolated publication of a few national stances or this or that other element, which are occasionally incomplete or ill-explained.
The Spanish problem. Mr Juncker's starting position is well-known: the expenditure of the Union in the period in question should be somewhere between 1% of the Union's GDP (a ceiling called for by the six thriftiest Member States) and 1.14% (proposed by the Commission), and any resulting reductions from the Commission's draft should cover all headings. As the main beneficiary of the cohesion policy, Spain was by definition the country worst affected by the reduction of credit under this heading in the Commission's draft, and it remained so in the Presidency's compromise, even though this did bring in greater flexibility. It is already generally agreed that the reduction in financing from the Regional Fund should be brought in gradually for regions clobbered by the statistical effect of enlargement. In the case of Spain, the Presidency's compromise provided for an additional two years of gradual reductions in the Cohesion Fund: 2007 and 2008. Five Member States opposed this: Germany, Austria, Netherlands, Denmark and Sweden. Without giving an out-an-out “no”, France observed that there is no legal basis to authorise this extension, and the United Kingdom entered a waiting reservation.
The Spanish authorities reacted with comments which went beyond the specific case of the Cohesion Fund, making the point that their country would be called upon to make the largest contribution towards the cost of enlargement, larger than the richest countries. Its net balance during the period 2000-2006 is estimated at 32.7 billion EUR; this balance would be reduced to 5 billion for the period 2007-2013, under the Commission's proposal. If the position of the countries of rigour was respected, it would fall to scarcely a billion, 8 under the Presidential compromise. Mr Miguel Angel Moratinos acknowledged the improvement put forward by the Presidency, but called for a further improvement, extending the funding of the Cohesion Fund in Spain post 2007 to four years (instead of 2).
All equally dissatisfied. The compromised also displeased Italy (which is also concerned that it could become the main bearer of the cost of enlargement), Greece and Portugal (which both felt that the special regime earmarked for them fell somewhat short), and even Belgium, because the region of Hainaut would get around 730 million EUR between 2007 and 2013, instead of the 1.2 billion proposed by the Commission. The level of 4% of national GDP as a ceiling of Community aid would be applied for the new Member States, including Bulgaria and Romania once they join. This has been challenged by most of the countries in question. Poland, having put at 3 billion EUR the support reserved for it, decided it was insufficient; it felt that the planned savings should not be made to the detriment of the poorest countries of the Union.
For their part, the “countries of rigour” are sticking by their preference for a ceiling of 1% of Union GDP. Five countries (Germany, United Kingdom, Netherlands, Sweden and Austria) have confirmed this explicitly, and France instead stressed three principles which it described as “red lines” not to be crossed: a) you cannot renege on what has already been decided on for agricultural expenditure; b) the majority of cohesion funds must be concentrated in the countries of central and eastern Europe; c) it is now time to put an end the “British rebate”, which is an anachronism (but the United Kingdom refuses to allow its rebate even to be discussed).
Tomorrow, I will attempt to draw a few ideas and conclusions from all of these elements.
(F.R.)