Brussels pays heed to Baltics' aid argument

  • 2005-05-25
  • By Ksenia Repson
TALLINN - The EU budget negotiations for 2007-2013 are a bread-and-butter issue for Estonia, and therefore the nation's leadership is keen to convince Brussels to revise calculations used to measure aid limits.

The General Affairs and External Council, one of the main decision-making bodies of the European Union, last week heeded Foreign Minister Urmas Paet's suggestion to modify the aid ceilings and compiled a new formula in favor of certain new member states, including the Baltics.

"A fair methodology must be found for calculating and granting the aid," the foreign minister said.

During the last two years of the EU's current budget period, which comes to an end in 2006, Estonia can receive approximately 16 million kroons. This sum is based on a 1999 price level, the European Commission reports on its official homepage 's one of the most comprehensive sources of EU information in Estonia.

According to available data, each Estonian kroon paid to the EU budget in 2004-2006 is compensated by 4.5 kroons. In all, foreign aid comprises about 11 percent of the state budget's revenue.

Originally, the structural aid limit was based on new member states' average annual GDP growth, which Estonia found unsuitable since it would mean that financial support for the Baltic state would most likely decrease. "The annual growth prognosis is 4.14 percent for Estonia," Paet said after the informal meeting of EU foreign ministers in Luxembourg on May 22 's 23.

In Paet's opinion, the amount of support each member state is entitled to should be proportionate to its gross domestic product.

This was echoed by the three Baltic prime ministers at their meeting in Riga May 20, when they agreed to support in principle aid limits of 4 percent of GDP from the EU Cohesion Fund with the caveat that aid be calculated on the basis of actual GDP in each country.

At the same time, the official line is distinct, said Paet: Estonia is open to discuss a reduction in the EU's budget volume, a matter of concern for many net contributors to the budget, such as Great Britain.

Jean Asselborn, the Minister for Foreign Affairs and current President of the Council of the European Union voiced hope for the successful completion of the budget agreement.

A political agreement between member states is supposed to be reached at the European Council convention in June.