Marcin Grajewski
Reuters
BRUSSELS: The European Union’s executive arm will propose this year a radical overhaul of the bloc’s budget that would shift spending away from agriculture toward innovation, climate and energy. The proposal, revealed in a draft paper showed on Monday, is likely to be made in late November. It will set the scene for some two years of tough negotiations among the bloc’s 27 governments, with Britain and France expected to fight especially hard to keep their current budget privileges.
The European Commission’s draft proposal, obtained by Reuters, does not mention a size for the budget, now worth $188 billion annually.
It calls for discipline, however, as governments will need to cut their fiscal deficits in the aftermath of the global economic crisis.
From 2013 – when the EU’s current long-term spending plan ends – there should be “a major refocusing of EU spending priorities, with more emphasis on growth and jobs, climate and energy security … and less emphasis on agriculture.”
Foreign aid would be another priority, assisting the EU to play a robust international role and foster reforms in developing countries, the Commission said.
More than 40 percent of the EU budget is now spent on the farm sector. About a third is used for regional aid, such as motorway construction, preserving the environment and job training.
The draft said regional aid should focus more on high-value projects such as research and development, innovation, training and trans-national programmes, rather than simple infrastructural schemes.
The proposal to cut farm spending is certain to irk France, which is the main recipient of EU agricultural payments, along with Ireland and Poland.
Less spending for poor regions could irritate Poland and other new EU members from central and eastern Europe, which lag western Europe in wealth after decades of communist rule.
In another potentially explosive proposal, the draft said Britain’s much-cherished rebate from its contribution to the EU budget should be phased out gradually.
The rebate – worth billions of euros a year – was won in 1984 by the Conservative party under then-Prime Minister, Margaret Thatcher.
The proposal to scrap it will infuriate the Eurosceptic Conservatives, expected to win a forthcoming general election.
“The justification for the existence of the remaining correction in favor of the United Kingdom … disappears progressively,” the draft said.
The Commission said the current, complex system of collecting the budget should be radically simplified, possibly by linking it to a new or old tax or levy.
Proceeds from the sale of allowances for greenhouse gas emissions could be such a revenue source, it said.
On agriculture, the Commission said direct aid to farmers should no longer be based on historic production levels, but on promoting sustainable farming and rural development.
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