East European states seeking to join the European Union warned today that EU proposals on how they would pay their membership dues could put a strain on their fragile state budgets.
The EU has proposed that candidates, ten of whom could join the bloc in 2004, pay from day one of accession the full budget contribution, the mandatory payment which partly derives from customs duties and from value added tax receipts.
The EU also proposed at a negotiating session today that new members should receive a lumpsum payment each year from the Union to make sure that the mostly ex-communist newcomers do not become net contributors to the EU budget.
But many EU candidates -- led by the biggest of them, Poland -- rejected the idea, saying they would prefer a fixed transition period before paying their full budget contribution.
"The phase-in system...is more advantageous for us than the proposed system of compensatory payments," Poland's chief EU membership negotiator, Jan Truszczynski, told a news conference.
He reiterated his earlier request for a five-year phase-in period for the budget contribution, which Poland would like to start at 10 percent in the first year after accession.
The structure and timetable of annual payments which new member states will have to make to the EU budget, which now amounts to about 90 billion euros ($80 billion) yearly, will be key for their budget deficit management and could affect local bond markets.