Ministers agree zero growth for 1997 EU budget

EUROPEAN Union budget ministers agreed yesterday to a 1997 central budget which achieves zero growth, an unprecedented attempt at spending restraint.

The effort to contain spending at the EU level reflects the struggle national governments are having to curb their own budgets ahead of Economic and Monetary Union (EMU), expected in 1999.

"The budget is particularly sensitive because of matters of EMU and the Maastricht criteria and the impact on individual countries," according to Mr Hugh Coveney, the Minister of State at "the Department of Finance who chaired the meeting.

Overall, the ministers agreed a budget for 1997 worth 88.759 billion ecus (£67.79 billion) in commitments and about 81.900 billion ecus (£62.5 billion) in payments, EU officials said. This compares with 1996 commitments of 86.580 billion ecus and payments of 81.943 billion ecus.

Ministers reached a compromise on the issue of financing support for European rail and road networks and - as expected - measures to encourage the peace process in Northern Ireland.

The two issues had undermined relations with the European Parliament, which has a considerable say over funding for internal and external policies such as aid to foreign countries.

In practice, the ministers agreed to restore a 100 million ecu budgetary line for Northern Ireland, although the money is set to come from savings in other policies in a move to keep the overall payments ceiling untouched.

The EU also committed another 100 million ecus for trans-European networks, the so-called TENs, and a total 74 million ecus for research, 24 million ecus more than initially agreed.

This compares with a parliament demand for a 300 million ecu reserve to cover the needs of research, the TENs and Northern Ireland.

The battle over additional money for the TENs has been at the heart of the European Commission's plans to spur greater employment growth.

The Commission has argued that more money is needed to complete the large infrastructure projects, which include an extension of high speed rail links across Europe.