RIGA - Finance ministers from the Baltic states said they would oppose a European Commission proposal to limit financial support from the Cohesion Fund to 4 percent of GDP during the EU's next fiscal period.
Meeting in the Latvian capital last week, the three ministers agreed to send a joint resolution to the commission, the EU presidency in Luxembourg and other member states' finance ministers.
"The European Commission proposal puts our countries at a relative disadvantage as compared to most member states, considering the amount of support per capita," the ministers' joint communique read.
Lithuanian Finance Minister Algirdas Butkevicius said that, even if the Baltics failed to get the 4 percent limit lifted, they should insist on a clear methodology for distribution of funds that would not be disadvantageous to countries with low GDP. For instance, the Baltics stand to lose out if the commission calculates the 4 percent from 2003 data, when GDP in the Baltic states was much lower than now.
Latvian Finance Minister Oskars Spurdzins said the proposed limit would restrict the amount of EU funds that the Baltics could claim for a certain period, and this would hamper development. He added that nearly all new EU member states with comparatively low GDP had similar problems, so the Baltics were likely to have allies when the issue is decided.
The Cohesion Fund is meant for the implementation of large transport and environmental projects. From 2004 to 2006 Latvia can receive over 515 million euros from this fund.
Meanwhile, Estonia's Taavi Veskimagi told journalists that the Baltics should harmonize their tax policies in order to facilitate better cooperation and greater development.
"The Baltic states represent one economic area. Therefore, harmonized excise taxes will help the economies grow," he said, stressing that this did not necessarily mean introducing identical tax rates. Veskimagi also pointed out healthcare consideration, saying that excise taxes on alcohol and tobacco should help eliminate harmful habits among the populace.
Spurdzins said that cooperation between the three states had originally been conceived as an exchange of tax information. This, he argued, should be regarded as progress, since there were problems with even this not long ago.
At present the Baltics have negotiated different transition periods for raising their excise tax rates to the minimum level required by the EU. Latvia has the longest transition period for excise on cigarettes, which should reach the EU level in 2010.
