By Bruno Waterfield - 19th January 2004
Key national governments and Brussels are set on collision course over EU budget proposals worth upwards of €1000 billion over seven years.
European Commission plans for a 2007–2013 budget blueprint will see large rises in cash for the EU’s poorer areas and a 400 per cent boost to Europe’s networks in transport, power or telecoms.
According to documents seen by FT Europe Brussels chief Romano Prodi is going to stick to his guns and insist that the EU maintains its maximum spending ceiling.
Europe’s six biggest contributors to EU coffers – including the ‘big three’ Germany, France, and the UK - are pushing for expenditure ceilings to be cut from 1.24 per cent of gross national income (GNI) to one per cent.
But sources close to budget commissioner Michaele Schreyer's indicate that the EU’s executive will fight to maintain spending for an enlarged Europe.
Projected growth figures at 2.3 per cent a year over seven years would see EU expenditure pass the €1000bn mark for the first time.
In 2011 agriculture would remain the EU’s biggest cost, swallowing 53.8 per cent of the budget.
But reformed farm subsidies would be down one per cent with large spending increases focused on ‘cohesion’ cash for the poorest regions and a huge shot in the arm for EU competitiveness.
Spending on regional policy will be up 23 per cent to 46.9 per cent of the EU’s total budget.
And, in an interview with FT Europe, regional policy chief Michel Barnier pledges that the cash will be split 50/50 between existing and new EU member states.
Ten new countries, mainly from formerly Stalinist eastern and central Europe, will need the spending to prevent their economies acting as a drag on a more the EU’s ambitions on the global economic stage.
“You can’t raise European competitiveness without cohesion,” Barnier told the newspaper.
“You can’t win a match with part of the team standing on the sidelines.”
Europe’s spending on foreign policy is set to rise 24 per cent to 8.5 per cent of the EU total, cash for European bureaucrats is also up a quarter to 9.3 per cent under the proposals.
Indicating a shift towards greater judicial cooperation EU justice spending increases by 200 per cent to 2.3 per cent of Europe’s total spending.
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