By Bruno Waterfield - 27th April 2004
EU spending will rise by €10 billion to balance budgets as Europe expands – a cash injection that will bring Brussels close to expenditure margins.
The European Commission’s spending plans for 2005 – the first full budget for an enlarged Europe of 25 members – risks bumping up against an EU spending ceiling enforced by penny pinching national capitals.
A cash limit for Brussels expenditure in 2005 is set at a ceiling of €114.2bn with planned spending forecast at €109.5bn – a €4.7bn safety margin.
Two fifths of the €9.7bn rise on 2004 expenditure is accounted for by the costs of incorporating new members into the EU.
The other 40 per cent of the increase is made up of money to match farm subsidy reform, 13 per cent, and funding for Europe’s poor regions, 28 per cent.
National governments are pushing Brussels to set expenditure at one per cent of Europe’s total income in the period 2007-2013: figures for 2005 set spending at €1.03 per cent.
EU budget chief Michaele Schreyer has warned that spending margins would be “tight” next year.
“The ceiling decided for 2005… will be tight,” she said on February 25.
“The budget in 2005 will come close to the ceilings to fulfil all obligations especially those agreed in the [enlargement] treaties.”
And spending will be under strict EU presidency surveillance in 2005, the Netherlands has warned.
The Hague, which will hold the EU rotating presidency for the last half of 2004, cautions that bringing in the 2005 budget on target “won’t be easy”.
Gerrit Zalm told a March council of European finance ministers that the Netherlands would be watching European Commission plans for spending.
“We want to adhere to margins, it will require budgetary discipline,” he said.
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