Brussels, 13/03/2009 (Agence Europe) - Talks are still ongoing but agreement has not yet been reached on how to find the promised €5 billion EU funding for rural development and energy interconnection projects. At a meeting of the committee of Member States' Permanent Representatives to the EU (COREPER) on Thursday 12 March 2009, most Member States said that the new financial rejigging in the Czech Presidency's latest compromise was moving in the right direction. Clarifications are still required, however, and the various projects have been given a very lukewarm welcome, with many doubts remaining about the list of energy projects. The final outcome of the talks is hard to predict, but it is on the agenda of the General Affairs and External Relations Council meeting on Monday 16 March, before being sent to the European Council as planned (19-20 March).
The compromise package unveiled by the Czech Presidency on Thursday includes a new allocation of the five billion euros between the two areas of the European Commission's proposal. Some €3.9 billion would be invested in energy (compared with the €3.75 bn initially planned, see EUROPE 9855) and €1.1 bn (rather than €1.25 bn) in rural development.
For energy, €1.395 would go on gas interconnection; €880 million for electricity interconnections; €10 million for projects for the isolated islands of Cyprus and Malta; €565 million for offshore wind farms; and €1.050 bn for carbon capture and storage (CCS).
For rural development (broadband internet and new challenges like climate change, renewable energy, water, biodiversity and aid for restructuring the dairy industry), several delegations said that no further cuts should be made in the €1.1 bn package now on the table. Some Member States have again called for greater flexibility between amounts allocated for the funding of high speed internet connections in rural areas (two thirds of the €1.1 bn) and monies for new challenges to be taken up by the Common Agricultural Policy (one third of the €1.1 bn).
In terms of the budget, some €2.6 billion would come from the 2009 budget and €2.4 bn from the 2010 budget.
In 2009, €600 million would go for rural development under the recovery plan. This would come from funding available under Heading 2 (the management of natural resources), expected to be of the order of €3.5 bn this year. The €2 bn for energy projects would come from an increasing in the ceiling for Heading 1a (competitiveness) in 2009, balanced by an equivalent reduction in the ceiling of Heading 2 for the same year.
Next year, the funding should be secured through a compensation mechanism: at the conciliation of the 2010 budgetary procedure (and if necessary, at the conciliation of the 2011 budgetary procedure), the European Parliament, the Council and the European Commission will examine all available sources that could provide for the compensation of funds to be committed to the rune of €2.4 bn. This would mean finding €1.9 bn for energy projects and €500 million for rural development projects. Most of the rural development monies should come from Heading 2 in 2010 (depending on the amount available). If insufficient funding is available, the possibility of finding finance from the 2011 budget (in addition to the 2009 and 2010 budgets) is mentioned, but not beyond 2011. (A.B. trans fl)