EU Countries’ Budget Red Lines

(EurActiv) — Yesterday leaders sat down in Brussels for a series of ‘bilaterals’ to hack out their positions on the EU budget with Herman Van Rompuy, the president of the European Council, and European Commission President José Manuel Barroso. Here are their red lines.

France

As its largest benefactor, France’s priority is to keep the budget for the Common Agricultural Policy (CAP) at the highest level possible. Prime Minister Jean-Marc Ayrault said “There can be no question of us withdrawing even €1 from the CAP”.

While France publicly defends Cohesion Policy, in alliance with Poland, and the Connecting Europe Facility, it is unlikely it would oppose a freeze, or even a cut to these items.

Paris aims for an overall budget of around €960 billion, or about 1% of EU GDP, a position close to Germany, which would agree to a freeze in current spending.

Paris supports the principle of own resources and regularly makes reference to the idea of redirecting taxes from financial transactions towards EU coffers, a view opposed by Berlin.

Germany

Germany wants the budget frozen, at a ceiling of 1% of EU GDP, or €960 billion.

Berlin pushes especially hard for “better spending”, advocating the transfer of money towards new policies areas such as innovation and research.

Like France, Germany does not want cuts to the CAP, but would likely agree to the redistribution of some agriculture funds towards climate, energy and competitiveness, which it would also regard as “better spending”.

On cohesion funding, the second largest item of EU expenditure (36%), Germany is largely in favour of spending on poorer areas of the EU, with some of the money benefiting eastern Germany.

Since the “Germany-as-paymaster” argument is gaining ground in public opinion, Berlin’s wants to stay under the radar as much as possible, says the European Council on Foreign Relations, and avoid any increase in the German contribution.

Poland

As the principal beneficiary of structural funds, some €67 billion for 2007-2013, Poland opposes any idea of a cut and wants to secure a similar receipts for the next long-term budget. According to figures from EurActiv Poland, the government is banking on a total of €75 billion.

The country still needs to modernise its infrastructure, therefore it, and the bloc of other ex-communist countries, believe the climate of austerity should not be used as an excuse to delay their economic development projects.

Prime Minister Donald Tusk has rejected the proposals by the Cypriot Presidency of the Council of Ministers and Herman Van Rompuy, its president, continuing to support the line taken by the European Commission.

Poland ardently defends the CAP, in alliance with the French.

United Kingdom

British Prime Minister David Cameron rejected the figure first proposed by Van Rompuy (€973 billion).

Cameron wants a real freeze in spending and has called for the EU to reduce its budget in a “symbolic gesture”, threatening to use his veto should this not be met. But commentators feel Cameron’s hard-line position is the result of a staunchly Eurosceptic backbench and fear of losing voters to the UK Independence Party.

The British Parliament voted on 31 October a resolution that goes further than this and calls for an actual cut to the EU budget, putting Cameron under pressure at the EU summit.

Sweden and the Netherlands have taken a similar position.

Spain

Confronted with an economic crisis and unemployment levels above 25%, Spain’s Prime Minister Mariano Rajoy is banking on support from the CAP and regional policy, of which the country is historically among the major beneficiaries.

The Van Rompuy proposal would see Madrid lose one-third of its structural funds and 17% of its agricultural subsidies.

Following bailout packages and harsh austerity measures, the Spanish news media have largely portrayed Rajoy as bending to the will of the EU. For Madrid, another perceived political defeat is not an option.

For Íñigo Méndez de Vigo, the country’s Europe minister, Spain prefers “not to get a deal instead of having a bad deal”, but this can be viewed more as a tactical move than as a threat of a veto.

Slovakia

Prime Minister Robert Fico recently said that Slovakia could imagine certain cuts to the proposed financial framework but that it would never agree to cuts to cohesion funding, according to EurActiv Slovakia.

Bratislava supports the Financial Transaction Tax but has not set out a clear link between the EU budget and the FTT.

Bulgaria

Bulgaria also insists on solid cohesion funding and wants the overall budget and the CAP to remain at least at the current level.

On the CAP Bulgaria says that if any cuts are to be made to the funds, those countries which receive only direct payments for farming should be affected, according to EurActiv Bulgaria.

The third priority of the government is to secure further funds for the continued safe decommissioning of the Kozloduy nuclear power plant.

Bulgaria does not support a financial transaction tax.