ECONOMY

Dutch want speedy rules

BRUSSELS – The Netherlands wants the 25 European Union leaders to agree upon guiding principles for the bloc’s future budget this month but Spain, Britain and other states are likely to resist, diplomats said yesterday. The Dutch EU presidency has drafted a proposed statement for a December 16-17 summit, setting out guidelines for future spending and referring to disputed proposals to replace Britain’s rebate from EU coffers with a general refund for net payers. But diplomats predicted the draft would be watered down before the summit to avoid pre-empting bargaining on the future EU budget for 2007-2013, which has yet to begin in earnest. «The Dutch are trying to push things forward, which they are also supposed to do according to the official timetable,» one EU diplomat said. «But there is no will to give in on the important issues at this stage.» The EU is officially due to agree on its future budget by mid-2005, but diplomats expect the divisive talks to drag into the first half of 2006. Spain and other southern European states are trying to build support for the executive European Commission’s proposal to increase the bloc’s budget to 1.14 percent of gross national income (GNI) or about 1 trillion euros in 2007-2013. The Commission says a bigger budget is needed to finance enlargement without denying funds to countries that have so far received the bulk of EU aid – Greece, Spain and Portugal. But the EU’s six biggest payers – Austria, Britain, France, Germany, the Netherlands and Sweden – oppose those plans and are demanding that spending be capped at the current 1.0 percent of GNI, or 109 billion euros ($144.5 billion) in 2005. They say EU spending must be curbed at a time when many countries are struggling to control national budget deficits. The Dutch draft text said «solidarity» would continue to be the guiding principle for the distribution of aid to the EU’s poorest regions but added that the «particular needs» of the new EU states should be acknowledged. Diplomats said Spain was likely to oppose this wording because an explicit reference to the newcomers could signal a reduction in regional aid to old EU member states in southern Europe. The draft also took note of Commission proposals to phase out Britain’s rebate, won by then-prime minister Margaret Thatcher in 1984, and replace it with a partial refund for all major net contributors, which would particularly benefit Germany and the Netherlands. Under the proposals, all EU states that make net payments of more than 0.35 percent of their national wealth to EU coffers would get a refund of two-thirds of the excess, up to a total limit of 7.5 billion euros for all. That would mean Britain’s current 4.6-billion-euro annual rebate from Brussels would eventually be halved. London has rejected these plans and the text is likely to meet opposition from a majority of EU states which oppose all forms of budget rebates and discounts, diplomats said.