States’ bud­get freeze bid risks more EU wran­gling

The Pak Banker - - International3 -

PARIS: Five coun­tries said on Satur­day the EU's bud­get should be frozen un­til 2020, high­light­ing a new source of pol­icy di­vi­sions that could spark a fund­ing bat­tle be­tween the re­gion's western states and their poorer peers in the east.

Bri­tain, France, Ger­many, Fin­land and the Nether­land­sall net con­trib­u­tors to EU cof­fers-said in a joint let­ter that in­creases in the bloc's com­mu­nal long-term bud­get should not ex­ceed the rate of in­fla­tion af­ter 2013.

"Euro­pean pub­lic spend­ing can not be ex­empted from mem­ber states' con­sid­er­able ef­forts to get their pub­lic spend­ing un­der con­trol," the let­ter, ad­dressed to Euro­pean Com­mis­sion Pres­i­dent Jose Manuel Bar­roso and re­leased by the French pres­i­dency, said.

Bri­tish Prime Min­is­ter David Cameron had flagged the call for a bud­get freeze at a news con­fer­ence on Fri­day fol­low­ing an EU sum­mit that, while paving the way for a per­ma­nent euro zone fi­nan­cial res­cue scheme, pointed up lin­ger­ing deep in­ter­nal di­vi­sions over how best to tackle the re­gion's debt cri­sis.

The five states can ex­pect strong op­po­si­tion from Poland and other emerg­ing Euro­pean coun­tries when talks be­tween the EU's 27 gov­ern­ments on the next long-term bud­get, which runs from 2014 un­til at least 2020, get un­der way in mid-2011.

Pol­ish Prime Min­is­ter Don­ald Tusk said his coun­try, which along with oth­ers like Bul­garia and Ro­ma­nia re­ceive aid to help mod­ern­ize their re­gions, would re­sist fund­ing cuts.

"What is the most im­por­tant from our point of view is for the bud­get not to be re­duced sig­nif­i­cantly, be­cause we be­lieve the funds flow­ing to Poland and other coun­tries help us fight the cri­sis," Tusk said on Thurs­day.

While the views of all EU states carry the same weight in de­cid­ing long-term bud­gets, a mi­nor­ity of net con­trib­u­tors man­aged to push through a sim­i­lar ini­tia­tive the last time the fund­ing came up for ne­go­ti­a­tion in 2005. -Ap

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