ECONOMY

The EU budget battle

Deputy Foreign Minister Yiannis Valinakis is today hosting a meeting with his counterparts from Spain and Portugal in Athens to discuss the common front formed by these and another 14 EU member states over the renegotiation of the EU budget, ahead of the proposals expected soon by the UK, which holds the rotational presidency of the EU. In June, the Luxembourg presidency saw its proposal – for each member to contribute 1.056 percent of its gross domestic product – defeated by the intransigent UK position on the tax rebate issue. Now smaller countries are facing the threat of reduced subsidies, therefore Valinakis has traveled to Austria (the next country to preside over the EU) and Germany, as well as accompanying the prime minister recently to the Czech Republic. In an interview with Kathimerini, Valinakis explains Athens’s aims and expectations in the negotiations to come about the EU budget. The previous EU summit ended in failure. What is it that makes you believe there will be a solution during the UK presidency? I cannot know whether we will reach a solution during the UK presidency, as its compromise proposal has not been presented yet. Yet we have to be ready, and ready we are. After a series of bilateral contacts between the presidency and member states, the positions and worries of everyone have to be restated from scratch, unfortunately. It is, however, important to know that the political and financial framework in Europe today is not the best possible. Just a few months ago, we had the rejection of the draft constitutional treaty by France and the Netherlands, and the failure to find a solution for the fiscal issues when there was a rather good deal for us on the table. Now everything is tighter, while the international economic conjunction is negative due to the rise in oil prices, which places added fiscal weight on member states, making many of them more negative toward funding common policies. There also is the well-known skepticism about the future of Europe and its enlargement. Greece wants and is working actively toward an agreement as soon as possible. A strong message must be sent to Europe’s citizens that Europe is going ahead, and to Greek citizens that Greece is gaining, not only funds, but also politically as it takes initiatives and has a share in forming the Europe of tomorrow. Last week you escorted the prime minister to Prague and visited Austria. The EU fiscal prospects issue was on both meetings’ agenda. What has come out of these meetings? Greece had a leading role last year in the formation of a major alliance of 17 states for the support of the European Commission proposals. We managed to take a strong position against the proposal of the six «rich» EU member states which wanted a minimal budget with 1 percent of each country’s GDP. That initiative now generates added responsibilities. It constitutes a serious negotiating factor along the basis of the Commission proposals, requesting more resources for cohesion and convergence. Many small and medium-sized countries in the EU have told us that they want the initiative of the 17 to continue. The prime minister’s meetings in Prague and mine in Austria are part of our contacts timetable with all member states involved. We are now strengthening our relations with the Czech Republic, Slovakia, Poland and Hungary. Furthermore, throughout the summer the ministry’s leadership and our ambassadors in our EU partner states exchanged views with their counterparts. This week [today] I am meeting with my counterparts from Spain and Portugal within the context of the constant contacts and coordinated efforts we started together a year ago, leading to the group of 17. In mid-September, we will have a meeting with the current UK presidency to have first-hand knowledge of how it intends to proceed. We have a specific plan and we are proceeding according to that. What are the positions of the Greek government this time, as after the deadlock of the June summit, nothing is certain. The 20 billion euros that Greece had secured then do not mean anything. Is everything back to square one, possibly under worse conditions? That is not correct. As I have said in the past, in an ongoing negotiation, and in a particularly unstable environment at that, nothing can be seen in advance as lost or gained. But I believe that the essential handling took place so that our positions weigh more today. We should not forget that the climate was, and is, especially negative for small countries, including Greece. We would hear many voices abroad talk about the Greek weaknesses along all these 20 years of the country’s EU membership and that new resources ought to go exclusively to the new members. The latest negotiation, even if it did not satisfy us entirely and was not completed, managed to overturn this mentality and persuade critics that Greek development is as important politically as that of new members. The issue is not what happened in the past but how we understand this union. That is, whether we want a union of solidarity based on principles or a union where it is each member for itself. Greek positions do not change. We want a Europe of solidarity, politically strong, a Europe through which we will manage to converge with the other, richer nations.