ECONOMY

The majority of commissioners are not in favor of EU budget cuts

Brussels – The European Commission appears determined to fight for as large a European Union budget as possible in its proposals for the Union’s fiscal policy during the period 2007-2013. According to sources, the majority of commissioners has rallied behind the president, Romano Prodi, in insisting that budget expenditure should remain at 1.24 percent of EU member states’ gross domestic product (GDP). They claim that only thus will the EU manage to aid the 10 newcomers, most of whom are far poorer than the current 15 members. The opposition is formed by the two German commissioners, Michaele Schreyer and Guenter Verheugen, the two British, Neil Kinnock and Chris Patten, and the Netherlands’ Frits Bolkestein. They insist that budget expenditures should be brought down to 1.15 percent of the collective EU GDP. The British and the Dutch, along with the Scandinavians (Denmark, Finland, Sweden) have long held that the EU is too profligate with its spending. Whereas the Scandinavians – at least the commissioners – seem to have been persuaded by Prodi, the Germans have rallied to the British-Dutch view because Germany happens to be the biggest contributor to the EU budget and its economy is not in the best possible shape. In any case, the 1.24 percent limit is never reached. Each year, 15 percent of the earmarked funds are returned.