The legal service of the Council of the European Union has rejected Commission plans to reallocate unspent EU money, bringing to a standstill recently unveiled plans to spend €5 billion on "smart investments" across Europe.
Doubts over the legality of the proposals were raised soon after the EU executive officially unveiled its plans three weeks ago. Diplomats said they were surprised that Commission President Barroso's team had not cleared all the hurdles before announcing its initiative.
Speaking to EurActiv, diplomats from three of the largest EU countries basically said the same thing: "There is no money available." One country's representative cited legal uncertainties about unblocking the funds, while another said his capital did not attach too much importance to energy and broadband projects at EU level, because it had a preference for investments in a national framework.
Commission spokesperson Cristina Arigho outlined the background for the stalemate. Speaking to EurActiv, she said the French Presidency had scheduled an extraordinary meeting at ambassador level in December to agree to provide the €5 billion from the 2008 budget, but no agreement was reached. However, the Commission proposal remained that the projects should be financed from the so-called "margin" between the 2008 annual budget and the ceiling for the EU's long term 2007-2013 financial framework.
'Yes we can'
At first, some member countries questioned the legal possibility of shifting the budget around, Arigho said. But she rejected the Council's view that it was an impossible thing to do.
"We don't share the interpretation of the Council. For the Commission, our interpretation is yes we can [allocate 2008 money], because the 2008 margin does not belong to the 2009 budget. It belongs to the financial framework, and there is nowhere in the interinstitutional agreements which would contradict such an approach," she said.
The Council's legal service issued its opinion at the beginning of February, excluding the possibility of retroactively revising the 2008 allocations. The Commission's reply, presented by Budget Commissioner Dalia Grybauskaite at a meeting of finance ministers last week, was that the EU executive was "aware of the Council's legal service opinion," Arigho continued.
"But we continue to believe that it is possible, and this is a political question, not a legal or technical question."
Arigho conceded that the present situation is an interinstitutional conflict, but said negotiations are ongoing. She further stated that she expected the issue to be discussed at a meeting of foreign affairs ministers on Monday, which will prepare decisions to be taken at the spring EU summit on 19-20 March.
One diplomat from a smaller EU country said he regretted that countries had started fighting over projects for which no money was available. But a representative from a bigger Western country was less critical.
"It's not the only game in town about money," he commented.