EU: The European Commission proposed measures yesterday that could increase the EU budget size by up to €3.5 billion between 2007 and 2013.
The EU's executive arm proposes increasing the size of the flexibility instrument in the budget to €700 million a year from its current €200 million. It also wants to extend use of these extra funds beyond emergency measures to include multi-annual funding requirements, according to the text of its proposal.
The proposal forms part of continuing negotiations between the European Parliament, the commission and member states to conclude a budget deal agreed in December by EU leaders. At the European Council summit leaders agreed the EU budget should be set at €862 billion for 2007-13. But the European Parliament, which earlier had proposed a €974.8 billion budget, has warned this figure is not enough and has threatened to veto the current deal.
But some member states which want to cut payments into the EU exchequer will oppose the commission proposal to increase the flexibility instrument by €500 million a year. States such as the Netherlands, Sweden and Denmark - the so-called 1 per cent club that want to restrict the budget to 1 per cent of EU gross national income - will oppose the measure. An EU diplomat said last night the council in general had a problem with the "flexibility instrument" and predicted the figure would not stand following the negotiations.
Budget commissioner Dalia Grybauskaite said the EU needed an agreement on the budget by April so new projects could be planned.
"The credibility and effectiveness of the enlarged Union is at stake," she added.
The commission's proposal for an inter-institutional agreement (IIA) between member states, the European parliament and the commission also contains the basic rules governing a proposed European globalisation adjustment fund. This should not exceed €500 million a year and will be drawn from money not spent in the existing EU budget. It should be directed to support workers suffering from the consequences of major structural changes in world trade patterns to help with retraining and job search efforts.
The proposal also confirms that the commission will present to parliament and to council a White Paper, covering a review of the whole structure of the EU budget in 2008-9. Britain demanded this review during the December negotiations.