By Bruno Waterfield - 10th February 2004
European finance ministers have fired the opening shots in what is set to be a bitter and bloody EU budgets battle.
As Brussels prepares to unveil a seven year budgetary blueprint for an enlarged EU, Europe’s big spenders have lined up their guns.
Germany's finance minister Hans Eichel opened fire on Monday by attacking plans to boost EU spending at a time when the European Commission was making strident demands for Berlin budget belt tightening.
And UK finance minister Gordon Brown joined the salvo with a call for an end to "wasteful and inefficient" Brussels expenditure.
On Tuesday Brussels chief Romano Prodi is expected to argue that the EU needs cash increases as Europe expands from 15 to 25 members.
He is expected to urge that spending rise in real terms from 0.98 per cent of EU gross national income (GNI) to around 1.22 per cent in the period 2007 to 2013.
In a bid to rally support the EU’s ‘financial perspectives’ are to be launched in the European Parliament where MEPs are expected to give calls for bigger budgets a warm reception before proposals are savaged by national capitals.
Europe’s ‘big six’ contributors to EU coffers – Germany, Britain, France, Austria, Sweden and the Netherlands – launched a pre-emptive strike in December 2003 with a demand that budgets be capped to one per cent.
And Prodi's announcement will see skirmishing and cash clashes commence until EU leaders finally agree a package sometime in 2005.
“It will be a full bloody battleground for years to come,” forecast one EU official.
Europe’s ‘big six’ finance ministers are rubbing the commission’s nose in a bruising defeat over Brussels budget guidelines for national governments.
Germany and France have breached EU fiscal rules designed to underpin the euro and enforced by the commission.
To howls of protest in Brussels a November decision by European finance ministers suspended guidelines aimed at curbing public debt, and spending, by eurozone capitals.
With a legal challenge now pending, ministers have returned to the fray with the stinging accusation of double standards as the commission seeks to boost its budgets at the same time as taking action in the EU courts to impose fiscal prudence on Berlin and Paris.
Germany's finance minister Eichel, warned that Brussels would not be taken seriously.
“You can’t say on one hand, you in Germany you have to save money and cut down expenditures, and demand at the same time: you have to pay more money to Brussels. It doesn't work that way.”
“You can’t pray for water and drink wine,” he said.
“The commission runs the risk that people will not take seriously the proposals.”
The theme has also been taken up by Britain.
“At a time when each member state is having to take tough decisions on spending and show fiscal discipline, it is unacceptable and unrealistic for the commission to propose a 25 per cent increase in its spending,” said UK finance minister, Brown.
But MEPs are set to back Brussels. European Parliament President Pat Cox will tell national governments that “this is not the time to do Europe on the cheap”.
“I do not make any presumption of easy money. I am the first to defend value for taxpayers' money. But Europe cannot turn in on itself, cannot let the economic cycle dictate its strategic course,” he will say.
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