Blair asks Balts to accept financial cuts for sake of European stability

  • 2005-12-07
  • By Kairi Kurm, Aaron Eglitis
TALLINN/RIGA - While meeting with Baltic leaders on Dec. 2, British Prime Minister Tony Blair found little support for his proposal to cut EU spending on new member states' development.
Latvian Prime Minister Aigars Kalvitis said on Dec. 6 that the country would not accept the EU budget if the proposal remained unchanged, while Estonia said new member states would pay "the highest relative price" for the British-led budget deal's sake.
The calls for spending cuts would amount to a 10 percent decrease in regional aid for new EU member states.

They are part of a last-ditch effort by the British to break the budget deadlock and secure a financing deal in time for the EU summit Dec. 15-17, during the country's presidency of the 25-member economic bloc. Negotiations over the budget disintegrated earlier this year when France and England refused to compromise over agricultural payments for French farmers and a rebate for the United Kingdom.

The British are suggesting to cut 24 billion euros over the 2007 's 2013 period from the previous Luxembourg budget proposal, with 14 billion euros to be slashed from development funds designated for new member states.

For the Baltic states, this could mean potential losses of up to 1 billion euros over the seven-year EU budget cycle.

The carrot, claim the British, will be simplified access to structural funds for the new member states, which include cuts in the EU bureaucracy.

After a joint press conference between Blair and the Estonian PM Andrus Ansip, the two PMs did not appear to be far from an agreement. Ansip called the discussions with his British counterpart "very fruitful," though he added later that negotiations would be ongoing over what, if any, cuts his country was prepared to accept.

For his part, Blair said the British budget proposal would only ensure that the new member states could finally plan for their financial futures. "The principal reason, frankly, why I am going to do my best to reach an agreement on the financial perspective is because of these people, is because we have always supported and championed enlargement, and we want to make it work," he said.

However, whatever goodwill the U.K. prime minister may have mustered during the visit - his first to the Baltics - quickly deteriorated in the following days, as one Baltic politician after another denounced the cuts.

"Such a stance by Great Britain does not satisfy us and does not contribute to reaching an agreement on the budget. The agreement cannot be sought at the expense of the least economically advanced EU member states," Lithuania's Antanas Valionis said.

"In our opinion, it is not fair that the new members are financing the British rebate," the Estonian government said. "All member states must make concessions in order to reach a compromise."

The British budget plan has drawn fire from media across Europe and has been derided by Jose Barroso, president of the European Commission. Barroso accused Britain of acting like the sheriff of Nottingham, robbing the poor to give to the rich.

Many new member states are concerned that only the next budget will provide them with substantial EU regional development funds, due to future enlargements that could absorb even poorer countries that would need the financial assistance.

Any last vestige of support withered away on Dec. 5 when the actual budget proposals were announced. Though they included a reform in the common agricultural policy and a reduction in regional aid, there was an increase in the British rebate from 5 billion to 7 billion euros.

Poland and France led the way against the British budget in the days before the mid-December summit. Leaders of many new member states, the European Commission, France, Germany and Sweden all were critical of the deal, and prospects of the budget passing in its current form looked dim.

In a Dec. 5 press release, Barroso said, "As it is, the U.K. presidency proposal is unacceptable. It is simply not realistic. This proposal amounts to a budget for a 'mini-Europe,' not the strong Europe that we need."

The commission president added, "In particular, the proposal needs to become fairer for new member states."

Hans-Gert Poettering, leader of the liberal group in the European Parliament, said in a press release, "The new member states from Central and Eastern Europe have suffered under communism for many decades, and it is our duty to help them overcome this handicap. The U.K. proposals send the wrong political signal."

After his short stopover in Tallinn, the British PM traveled to Budapest to meet with leaders from Hungary, Poland, the Czech Republic, and Slovakia to try to convince those countries of supporting the budget cuts.