Barnier bullish over cohesion budget

It is “unrealistic” to think the EU can maintain its ambitious regional policy if the budget is capped at one per cent of national GDP, warns EU commissioner Michel Barnier.

Barnier, who runs the EU’s regional policy, was reacting to a letter sent to Brussels by six net-contributing states calling for the EU’s €100 billion annual budget to be capped at one per cent of GDP, down from the current maximum 1.24 per cent ceiling.

“I don’t think it is realistic to conduct all these [regional] policies without spending any more than we are spending today,” he said.

“I don’t think we will be able to do more with less money.”

Barnier also denied any links between the letter and recent spats over voting rights in a new European constitution and the budgetary rules underpinning the euro.

“I don’t think it is linked to the Stability Pact nor the temporary stalling in the Intergovernmental Conference.”

“The heads of state were intending to submit this letter after reaching an agreement on Sunday and it didn’t quite work that way.”

Barnier was “unsurprised” by the letter and said he had heard national governments expressing similar views earlier in the year at a meeting in Rome.

He also shared some of the concerns contained in the letter which calls for better cohesion and solidarity in the budgetary process.

“It does reflect many of the convictions I voiced myself,” stated Barnier.

“Many of the new commitments and the new expenditure we are being asked to take into account at European level do not necessarily lead to an increase in public expenditure for Europeans,” he warned.

“Expenditure which in the past was covered by member states will be transferred to the community budget.”

Barnier’s comments came as he announced the conclusion of negotiations for the implementation of structural funds in the ten EU accession countries for 2004-6.

Brussels has made over €14 billion available in structural funds for 2004-6 and backed this up with €8bn for the cohesion fund - cash meant to finance projects bridging the divides between the more and less developed regions in Europe.

Poland, as the biggest accession country, comes out best, walking away with over €12bn in EU funds to build up its infrastructure.

But all recipients must ensure that their projects comply with strict EU laws on government procurement, environment and competition if they are to qualify for the handouts available from the start of next year.

“I believe the success of enlargement must genuinely be based on the success of cohesion policy,” added Barnier.

“We will have a lot more inequalities and fractures than today.”

“You can’t win a match if you leave half the team on the side lines.”

As of May 1 2004, Brussels will take eight central European countries, Cyprus and Malta under its wing, increasing the union’s population and territory by a third but its budget by just six per cent.

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