Commission’s ‘smart projects’ plan divides the Union

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A recent plan by the European Commission to allocate five billion euro of so-called “unspent EU money” to clean energy and broadband projects antagonised the bloc’s foreign ministers yesterday (23 February) and embarrassed its initiators too, EURACTIV has learned.

At yesterday’s meeting of the General Affairs and External Relations Council, foreign ministers even disagreed over what “geographic balance” implies, sources told EURACTIV. 

In the view of Western countries, the energy projects package presented by the EU executive is a “balanced” one. But for the richest countries, a balanced proposal implies that they get returns, in the form of projects, to match their bigger contributions to the EU budget. 

Eastern countries have a different understanding. As one Bulgarian official put it, Sofia sees “no coherence, no balance and no policy” in the Commission’s proposal. Bulgaria will push for a “geographic balance” in the allocations, he added, to make sure that “the lessons learned from the gas crisis are reflected in the final decision”. 

In fact, Bulgaria and Slovakia, the countries worst hit by the crisis, were allocated only modest sums under the EU executive’s plans to reallocate five billion euro of unspent EU money (EURACTIV 29/01/09). Under the proposal, Bulgaria was allocated €20m for the Haskovo-Commotini gas interconnection with Greece, and Slovakia €25m for the Velky Krtis-Ballasagyarmat interconnector with Hungary. 

But this time around, Bulgaria’s criticism was echoed by Greece, Portugal and Spain, all of which also saw the package as unfair. 

Other Western countries are raising objections too. Britain is uncertain about the timeframe and believes that money could be committed by 2010, but not spent. Germany would like to see a different list of projects, and Belgium and Denmark are unhappy that projects for “smart energy cities” have been dropped, sources said. 

The Commission, the initiator of the project, found itself under fire not only over the content of the proposals but also for not having secured financing, EURACTIV revealed recently (EURACTIV 19/02/09). Now, under pressure from Germany, Austria, the UK and the Netherlands, the EU executive has been forced to abandon its plans to use funding from the so-called ‘margin’ between the 2008 annual budget and the ceiling for the EU’s long-term financial framework for 2007-2013. Instead, it will try to find the money from elsewhere. 

In the meantime, the entire package – proposed at the initiative of Commission President José Manuel Barroso – remains an illusion, a diplomat said. 

On 28 January, the European Commission proposed to reallocate five billion euro of unspent EU money, mostly to support clean coal projects, offshore wind farms and the deployment of broadband Internet connections in rural areas (EURACTIV 29/01/09). 

Presenting the plans, European Commission President José Manuel Barroso said the projects would represent a "smart investment" for the EU as it battles a deepening economic downturn. 

Under the plans, a total of €3.5 billion will be devoted to clean energy projects, while €1 billion will support broadband Internet. A further €500 million is earmarked for tackling new agricultural challenges such as climate change, renewable energy, water management and restructuring the dairy sector. 

In the meantime, many countries have attacked the Commission proposals, for a variety of reasons. Some Western countries complained that projects for "smart cities" have been dropped, while Bulgaria, the country worst hit by the recent gas crisis, found its own modest allocation "abnormal" (EURACTIV 04/02/09). 

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