| New crisis in the European Union The main goal of the meeting in Brussels, which yesterday brought together the leaders of 25 EU countries and its member states, Bulgaria and Romania, was to find a way out of the impasse in which the agreement on the Union budget for 2007-2013 found itself. Europe has not seen such an acute conflict between its leaders for a long time.
At the Brussels summit, two concepts for the further construction of the European Union collided. One is represented by supporters of expanding the EU's common financial pot, primarily France and Germany. The other is defended by Great Britain, which advocates its reduction. British leaders want the EU to be a large free trade area, an economic community with a minimal supranational superstructure. Prime Minister Tony Blair presents himself as the savior of the European project, which he believes has been undermined by an over-indulgence in political integration.
Arriving at the Justus Lipsius Palace in Brussels last night, Blair suggested the negotiations would be "difficult, very difficult." The head of the country presiding over the EU until the end of this six months is not confident in the possibility of a compromise. The draft seven-year EU budget, according to Blair, involves funding in the amount of 849 billion euros. This is 145 billion euros less than the European Commission, which had requested at least a trillion, would like to see. Blair's estimates include an 8-9% reduction in assistance programs for new EU countries and a cap on the administrative costs of European institutions. These proposals are harshly criticized by most summit participants.
The UK agrees to increase its contribution to the EU by 1 billion euros per year, but other European leaders consider this sacrifice insufficient - after all, London enjoys preferential treatment when calculating its payments to the EU budget. Back in 1984, Margaret Thatcher got her country to return almost two-thirds of its national contribution to the EU budget. This is the so-called “British check”, that is, compensation for London for the fact that UK agriculture does not consume subsidies from the EU trough. This year its size amounted to 5.6 billion euros.
European leaders are demanding that London increase its overall European budget and at the same time increase its own national contribution. The European Commission, France, Poland and Hungary clearly opposed the current project. Madrid called on London to make further concessions; Rome expressed “dissatisfaction.” German Chancellor Angela Merkel said she would “not agree with the UK proposal at any price.”
Never before has public debate at the top of the European Union been so frank and harsh. European Commission President Jose Manuel Barroso called the British project “unacceptable” and “a budget for mini-Europe.” In his opinion, it will not have enough money not only for the costs associated with the costs of EU enlargement, but also for programs to increase the competitiveness of the European economy in a globalized world. He warned that the failure of budget negotiations would "send a very bad signal to European citizens", demonstrating that an integrated Europe was "at a dead end and cannot move forward".
The budget impasse has exacerbated the EU crisis caused by the failure of referendums on ratification of the European Constitution in France and the Netherlands. A budget failure would be a further demonstration of the EU's inefficiency and structural failure. In the future, this may lead to a weakening of the euro and a revision of plans for further expansion of the union.
But Blair has a significant trump card. Until the budgetary outlook for 2007-2013 is agreed upon, the “new Europeans” will receive nothing from EU aid funds. Newcomers face a difficult choice: compromise or be left with nothing in the near future. Wanting to appease the newcomers, on December 5 the British government unveiled a retouched draft European budget, increased by 2.5 billion euros through small targeted subsidies to Eastern European countries. In particular, 1.2 billion is expected to be allocated to Slovakia and Lithuania for the liquidation of Soviet-style nuclear power plants.
Formally, the EU has the whole of 2006 left to agree on the budget. In the first half of the year, Austria will have to deal with the problem. If things get really bad, Vienna could convene an extraordinary EU summit in January or February next year. If the Austrians' efforts prove fruitless, the budget dispute will pass into the hands of Finland in the second half of the year, which will hold the EU presidency during this period.
Until the long-term budget is finalized, the EU will live according to the 2000-2006 budget. This will require approval from the European Parliament. The basis will be the 2006 budget of 112 billion, which will be amended annually taking into account the level of overall economic growth in the EU. It is possible that the budget scandal will force the EU to abandon the practice of drawing up long-term financial plans, introduced in 1988, and switch to annual estimates.
Budget disputes are already affecting many pan-European programs that require long-term planning. Today, expenditure items, financing for which will begin only in 2007, are in question. Not only newcomers, but also old-timers of the EU, including the UK itself, will suffer from this. The EU's annual budget planning will no longer be able to support ambitious long-term programs. This means that the dream of turning Europe into a strong center of global economic competition will remain on paper. Alexander MINEEV, Brussels, corr. ITAR-TASS - specially for Vremya Novostei, Alexander TIMOFEEV |
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