Budget 2007-2013: prospects for deal look bleak

Most of the new EU member states have blasted the latest Presidency proposals for the financial perspective 2007-2013. Some of the EU-10 see plans to limit the amounts for structural funds as ‘a step backwards’.

The Presidency presented its latest proposals for the financial perspective 2007-2013 to the General Affairs Council on 25 April. The revised ‘negotiating box’ was sharply attacked because it maintains the maximum limit (4% of GDP) a country can get from the structural funds. The Luxembourg proposal introduced further differentiation by tying the precise percentages to the prosperity level of the beneficiaries.

Poland, the Czech Republic, the Baltic States and Portugal condemned the Presidency’s proposals as “unacceptable” and “a giant leap backwards”.

As expected, the financial perspective debate is turning out to be a struggle more about national interests than about the real long term priorities of the Union. It looks highly unlikely that the Presidency will be able to conclude a compromise before the end of June. 

With Germany and France unwilling to re-discuss the 2002 Berlin agreement on financing CAP, the UK’s stubbornness over its rebate and the fight between the old EU-15 and the new EU-10 states over structural funds, this debate could stretch well into 2006, with the EU’s Lisbon reform objectives the major loser.

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