Reduced membership fees for other EU states may prove costly to Finland

Enlargement of Union will increase costs in any case

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Membership fee reductions to EU's largest net contributors may prove costly to Finland.
      The European Commission's planned amendments to the model of the Union's payment policies would significantly increase dues for countries such as Finland, who are relatively wealthy but not large net contributors.
      From Finland's point of view the difference between the most and the least expensive proposed solutions is around EUR 450 million per year.
     
Finland has put in its own suggestion for a simplified payment policy, according to which additional contribution concessions should be dropped. In Finland's model, member states that have enjoyed fee reductions would receive a decreasing restitution until the end of the transition period in 2013.
      The Commission has suggested reductions to large contributors such as Germany, Sweden, France, and the Netherlands, whose fees exceed 0.35 percent of their GDP. Two-thirds of the portion going over this limit would be returned back to them.
      This would increase costs to members, for instance Finland, whose contributions remain below this limit.
     
In Finland's view, with the enlargement of the European Union, its entire membership contribution policy has become outdated and distorted.
      In the coming years there will be a significant increase to Finland's net contribution in any event, but the extent of this increase largely depends on the outcome of negotiations over regional support, agricultural subsidies, and funding models.
      The fact that the ten new EU member states are considerably poorer than the old ones is bound to add to the costs to the old members. In relative terms, the new members will receive a larger appropriation from the EU treasury.
      The Ministry of Finance estimates that for the financial period 2007-2013 Finland's average contribution to the EU will range between EUR 360 to 770 million.
      The final outcome will largely depend on the level at which the Union wants set the cap on its expenditure. Finland favours a maximum of 1.1 percent of the Union's GDP.
      The Commission has proposed a higher limit.


Previously in HS International Edition:
  Finland to pay considerably more to European Union in coming years 11.10.2004)

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