Kallas: Budget cuts threaten EU fundamentals

Siim Kallas

Siim Kallas, the Commission vice president responsible for transport, said budget cuts for 2014-2020 proposed for the 22-23 November summit risked ‘cancelling’ European policies designed to link Eastern and Western parts of the continent.

Speaking at the European Liberal party's congress in Dublin last weekend, Kallas, an Estonian Liberal, strongly expressed his concerns about the course that budget negotiations had taken.

Addressing a meeting on a “Liberal roadmap for energy transition,” Kallas said that he even wouldn’t call the ongoing budget discussions a “debate”.

“It’s a real fight about the future [of the] EU budget," he said. "This is not about money, this is about the fundamentals. Do we need European policies at all or should we cancel European policies?”

Kallas said that he and his fellow commissioners, including Energy Commissioner Günther Oettinger, agreed about the proposed cuts, currently under discussion in the wake of the extraordinary EU summit.

“We are much afraid that these cuts will hurt seriously our energy and transport network projects,” Kallas said.

He singled out two countries for displaying the importance of a common energy policy for Europe. These were his own Estonia, part of the Soviet-era electric grid which has to yet establish links to Finland or the Baltic states, and Bulgaria, which is still reliant on Russian gas supplies.

The philosophy behind Oettinger’s proposal for a Connecting Europe facility (CEF) a year and a half ago was to develop physical infrastructure for European integration, Kallas said.

CEF currently appears the biggest victim of the latest ‘revised negotiating box’, a document containing concrete spending figures for the 2014-2020 period, recently tabled as a compromise proposal by the Cypriot presidency.

The new cost of CEF, according to Cypriot figures is €36.3 billion, although the Commission originally proposed €50 billion.

East-West links at stake

Asked by EURACTIV to substantiate his strong criticisms, Kallas cited transport projects already adopted at Council level, aimed at connecting Eastern part of the continent to the West.

“This has been one of the most important priorities of this Commission. But if the money is cut to the extent that we cannot realise these projects any more, this is a cancellation of European policy," he said.

The European Commission will present on Thursday (15 November) its Communication on the internal energy market (see background).

According to a leaked version, recently obtained by EURACTIV, Estonia, Lithuania and Latvia – as well as Malta, Cyprus, Spain and Portugal – are described as “gas islands” because of insufficient infrastructure connections with the rest of the EU.

Perhaps more seriously, dependency on a single gas provider also prevails in countries with a better geographical position, such as Slovakia, Bulgaria, Hungary and Romania, the paper says.

But the EU executive is also critical of Germany, calling on Berlin to enhance the inter-connectivity of gas flows from the Nord Stream pipeline with Russia, operational since November 2011, and to develop north-south and east-west transport capacity. [more]

The European Summit of 4 February 2011 underlined the need to modernise and expand Europe's energy infrastructure and to interconnect networks across borders.

Heads of state insisted that no EU member country should remain isolated from the European gas and electricity networks after 2015 or see its energy security jeopardised by lack of the appropriate connections.

On 29 June 2011, the Commission proposed the Connecting Europe Facility to promote the completion of priority energy, transport and digital infrastructures with a single fund of €50 billion, out of which €9.1 billion are dedicated to energy.

The European Commission estimates investment needs of about €140 billion for electricity infrastructure and at least €70 billion for gas through 2020.

On 15 November the Commission will present a Communication on the Internal Energy Market to take stock of progress made towards the completion of the internal energy market by 2014, identify the main challenges ahead and propose actions to improve the effective application of the third energy package.

The Communication will be accompanied by documents that provide an insight into the European electricity and gas market, key statistical data and a country-specific analysis on each of the 27 member countries, as well as an overview of their investments in energy infrastructure.

  • 15 Nov.: Commission to table a Communication on the Internal Energy Market
  • 20 Nov.: General Affairs Council to discuss EU budget 2014-2020
  • 22-23 Nov.: Extraordinary summit to discuss and decide EU budget 2014-2020

Cypriot presidency

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