EU budget talks: Luxembourg's proposal means cuts to Finland's support

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Luxembourg, the country currently in charge of the rotating EU Presidency, presented the foreign ministers of the member states with a proposal for the Union's budget for 2007-2013 in a closed-door meeting on Sunday.
      Finland, among others, had a hard time digesting the plan that would cut its support by up to EUR 200 million per year. The proposed cuts would mean reductions to rural development and structural funds in particular.
     
Finland is already one of the Union's net payers. In other words, its membership payment exceeds the support funding it receives in return.
      According to the Ministry of Finance calculations, Finland's annual net premium may reach EUR 800 million by the year 2013.
      Finland joined the chorus of countries insisting on the abolition of the controversial British rebate, a point insufficiently addressed by the Luxembourg proposal.
      In 1984, Great Britain managed to negotiate an annual rebate of over four billion euros to compensate for its minute agricultural output.
      For Finland, the cost of the U.K.'s rebate comes to about EUR 150 million annually.
     
Luxembourg's budget proposal translates to an annual spending of around 1.06 percent of the member states' gross domestic product (GDP). The EU Commission, together with the new member states, has requested the lifting of the bloc's annual spending to 1.14% of GDP, in order to cover the additional expense of enlargement.
      The Union's annual budget is currently around EUR 100 billion, half of which is spent on agricultural support.
      The funding for agriculture has been fixed until 2013, so the current talks concentrate on the remaining half of the budget.
      Many of the net payer countries - such as Germany, France, Britain, and Sweden - consider the Commission's proposal too generous and have requested that the budget be limited at its current level of one percent of the bloc's GDP.
      In Finland's view, the limit should be 1.1%.
     
Negotiations over the Union's budget have not advanced in several months now, despite efforts by ministers, diplomats, and officials. Sunday's ministerial-level meeting was the first one at which concrete figures were discussed.
      Luxembourg hopes the Union will agree on the budget during its Presidency, by the end of June.
      So far, however, the member states are far from seeing eye to eye. The British have also threatened to veto any attempts to withdraw their rebate.


Previously in HS International Edition:
  Finland still wants highest level of EU support for east and north(12.2.2004)

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