» Monday, December 19, 2005

EU Budget

Asked whether the government was concerned that in 2013 the figure would be £2bn, the Prime Minister’s Official Spokesman (PMOS) said that figure was a misunderstanding of the process. For a detailed breakdown people should look at the figures released early Saturday morning. 2013 was a new book as was the case in every budget negotiation. By then we would have had the fundamental review. As President Barroso had said today that could result in a variation of the budget before the end of the budget period. He had been very clear that there were no taboos in the mid-term review. It would be a fundamental review. President Barroso had said that it could result in change. Of course that was subject to agreement by the European Council but that was true of every country. People should not take as an absolute given things that were not.

Asked if there was a rough estimate of how much we would make in terms of increased growth, the PMOS said the following two figures were a good indicators. Between 1993-2003, in other words before accession, our trade had increased by 300%, albeit from a low starting point. Given the injection of 170 billon euros into the accession countries in the next period trade would obviously increase much more again. If you looked back at what had happened with Spain and Ireland our trade with them was now worth 65 billon euros per year. That gave an idea of the trade growth with 2 countries coming up to the EU average and he had no doubt they could see the potential read across to the 10 accession countries coming up.

Asked where this left our own structural funds for places like Cornwall, the PMOS said the hard reality was that we had always been one of the countries that because we were richer than others we had received less structural funding. What was indisputable about this deal was that it agreed the largest transfer ever in the EU from the wealthier countries to the poorer ones, as was right and proper. This was why you had seen the biggest changes in net contribution for countries like France and Italy who had traditionally been big recipients of structural aid. They now would not be to that same extent.

Put to him that the opposition had applauded that point but the Prime Minister had focused on them trying to stop money going to the poor countries and was not the review purely a shallow promise, the PMOS said the review was not a meaningless exercise as President Barroso had made clear. The rebate in regard to Common Agricultural Policy (CAP) across all 25 countries and in the structural and cohesion funding for the 15 was preserved, which had been a fundamental point made by the Prime Minister. Somebody had to pay for enlargement, as it turned out our increase in contribution was a lot less than others, but we did have to pay our fair share.

Put to him that France had made it clear that they expected existing arrangements to survive until 2014 and that by 2008 the accession countries would have another 30% of their CAP funding and not want to give that up, the PMOS said, the accession countries, as we had heard when we had toured them, recognised that the future did not lie in the CAP. It was in a reformed EU budget, which spend its money on IT, education and responding to the global challenge. Equally on the other side of the coin, if we had not done a deal that helped the A10 we would have lost their goodwill and support in pushing for reform. Today we had a meaningful fundamental review and we had the firm support of the accession countries.

Asked what that said about the negotiating process in Europe where CAP reform was needed in 2003 but was rejected for accession, the PMOS said that enlargement was part of the process of making Europe as a whole more prosperous. That meant more trade for this country and that was in the strategic interests of this country. Enlargement was in the strategic interests of this country in 2002 so we had to do that deal. It remained so today so we also had to pay our fair share. Put to him that it was a question of how much, the PMOS said that the example he had sighted of Ireland and Spain showed the trade gains. That meant real jobs in this country. In terms of the accession 10, if you actually looked at the transfer of funds others would pay a higher increase in net contributions.

Briefing took place at 9:00 | Search for related news

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