ECONOMY

Commission to consider ways to finance an expanded Union

Brussels – The European Commission will start considering proposals for the European Union’s fiscal policy after 2006 – i.e. following the (official) end of the Third Community Support Framework (CSFIII) – next week. The proposals, which will include a fourth CSF are certain to mean reduced aid to Greece. The Commission’s aim is to publish the proposals before its mandate expires, in November 2004. The new Commission will include representatives of the 10 new EU members that will join in May 2004. It will be the new Commission, however, that will have the task of negotiating the aid package with the member states and the European Parliament. The package should be agreed upon by the end of 2005 so that CSFIV can kick in in the beginning of 2007. Drafting the «General Orientations of Fiscal Prospects» has been divided into three unities, rather pompously named «Peace,» «Freedom» and «Solidarity.» A total of six work groups will be formed to discuss proposals. A further coordinating group will be presided over by Commission President Romano Prodi. The six commissioners who will preside over the work groups are Michel Barnier (regional policy), Michaele Schreyer (budget), Mario Monti (competition), David Byrne (health and consumer protection), Neil Kinnock (administration) and Pascal Lamy (commerce). As for the three large unities, «Peace» will focus on external relations, security, regional and global issues and democratization; «Freedom» will deal with security and justice within the EU, the notion of the European citizen, the development of a «European model,» economic policy, the internal market, employment and sustainable development; and «Solidarity» will address inequalities among members, regions and individuals and the strengthening of economic and social cohesion within the EU. The preliminary reports of the work groups will be submitted by July, at the latest. A preliminary discussion on them will take place at December’s EU summit in Rome. Among the most important questions the Commission will be called upon to handle is how to redistribute resources and fund the Union’s budget. It will also decide on the duration of the new «fiscal period» which may last until as early as 2009 or as late as 2013. On the question of CSFIV, Commission sources said yesterday that the Commission would continue to fund those regions whose incomes will jump to over 80 percent of the EU average after the enlargement. In Greece, such regions include Attica, the southern Aegean Islands, Central Greece and Central Macedonia. The enlargement countries, with the exception of Cyprus, Slovenia and Malta have average incomes of less than half of the EU average. In any case, Greece is bound to receive less from the CSFIV program than the total of 51 billion euros allocated to it under CSFIII.