Summit opens battle over EU’s long-term budget

* EU budget battle starts earlier than expected

* Britain scores early victories, angers east Europeans

* Fight to be over budget size, farm subsidies, regional aid

By Marcin Grajewski

BRUSSELS, Oct 29 (BestGrowthStock) – Wrangling over the European
Union’s long-term spending plan for 2014-2020 kicked off at its
summit on Friday, months earlier than anticipated, with Britain
securing considerable support for a lean budget.

Fighting among the EU’s 27 governments over the long-term
budget, which could be worth nearly 1 trillion euros (dollars)
could typically be expected to start next June, after a planned
publication of proposals by the executive European Commission.

But British Prime Minister David Cameron insisted on
discussing the issue at a meeting of leaders of EU member states
and managed to include a declaration that the budget will be
moderate, in an early draft of the summit’s final statement.

The plan outraged some countries advocating a bigger EU
budget, such as Poland and Hungary, which were struggling to
remove the declaration, saying such a major political move must
be discussed properly.

“Heads of state or government stressed that, at the same
time as fiscal discipline is reinforced in the European Union,
it is essential that the EU budget and the forthcoming
(long-term budget) reflect the consolidation efforts being made
by member states,” the summit’s draft conclusions said.

Britain, whose often eurosceptic Conservative government has
cut national spending to reassure financial investors, said the
statement was a victory in its struggle for EU austerity.

“When the next financial perspective…is negotiated over
the next 18 months, he (Cameron) has secured unprecedented
language, unprecedented agreement,” British Foreign Secretary
William Hague told BBC Radio.

Diplomats said privately the British position was supported
by Germany, the Netherlands and other net payers into the
budget, as well as EU Council President Herman van Rompuy.

The EU budget, worth about 130 billion euros annually,
represents about 1 percent of the bloc’s economic output.

An early declaration at the highest political level that the
budget should be modest would hamper efforts of EU net financial
beneficiaries from central and eastern Europe, as well as the
Mediterranean, to keep the current spending level or raise it.

“This is typical wrangling between those who give and those
who take,” said Polish Prime Minister Donald Tusk.

Other sticking points in budget negotiations will include
the future of the EU’s generous farm subsidies and Britain’s
cherished rebate on contributions to the bloc’s coffers. Net
payers will probably also seek to trim EU aid for poorer
regions.

Farm subsidies and regional funds jointly account for more
than 70 percent of the budget. The rest goes to foreign aid,
internal security and administrative costs.

In a related move, Britain won support from France, Germany
and others at a European Union summit on late on Thursday for
its opposition to a planned 5.9 percent increase in the EU’s
budget for 2011. [ID:nLDE69R2FA]

Summit opens battle over EU’s long-term budget