EU Update – June 2005
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Of presidencies and budgets
As you will have seen in the news coverage over the last couple of weeks, the EU is in the throes of an upheaval, crisis, challenge; call it what you will. Obviously the contributory factors are the no votes in the French and Dutch referenda, the spat over Britain ’s rebate and the cost of CAP, and a general level of disgruntlement over the development of the EU. From our perspective, the key points are:
- That no agreement has yet been reached on the overall EU budget. This delays agreement on more specific detail, such as structural fund programmes. At best, the programmes will be delayed (no change there, then). At worst, we will begin 2007 with only an annual budget and an inability to plan in the long term.
- That Britain ’s tenure of the EU presidency from 1 July to 31 December this year may in fact prove to be a benefit. Whilst the UK continues to hold a firm line on reducing the budget, the room for manoeuvre is much more limited, following the Luxembourg presidencies publication of its ‘negotiating box’, which suggest that the final budget figure will be around 1.05% of GNI (i.e. a compromise between the 1.24% maximum and the 1% proposed by the net contributor countries). This means that that the UK will be forced into the position of mediator, not protagonist.
- That negotiating box is not wholly helpful, however. It proposes a reduction in R&D and innovation funds, a reduction in the overall structural fund budget at the expense of the Cohesion Fund, and a reduction in finances going into the co-operation priority.
- There is considerable talk of enlargement being delayed. Again, with the UK , and its strongly pro-enlargement stance, in the presidency, this is less likely to happen. Certainly, many people expect that commitments made to Romania and Bulgaria , and possibly also to Turkey , will be honoured.
CAP
On 20 June 2005 , the Luxembourg Presidency achieved a success with the unanimous adoption of a political agreement on the regulation governing support for rural development.
The compromise sets minimal financing rates for each priority axis, which the Member States must respect in their programming. It should be noted that these rates have been lowered in a bid to create greater flexibility at national level when developing programmes. Therefore, the Member States must use at least 10 per cent of the Community’s financial contribution which is granted to them for measures to promote the objectives of axes 1 and 3 respectively, and 25 per cent for the programmes supporting the priorities of the second axis. With regard to the Leader axis, the Ministers agreed that the financial programming rate must not fall below 5 per cent. For more details please use the link below.
http://www.eu2005.lu/en/actualites/communiques/2005/06/20agri/index.html
Future of inter-regional co-operation
As avid readers of the EU update will know, the co-operation priority is likely to be an important resource for us in the future. Even with the proposed budgetary reduction, the budget for this priority will be around twice as much as the current financial period. To recap, it covers three areas of activity:
From Cumbria ’s point of view, the key issues are:
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Imagine our dismay when we received the Commission’s proposals for new zones, which excluded Cumbria from the NW Europe area (where it has previously been included). At the same time, we heard of a proposal that a much higher proportion of funds would be allocated to cross-border programmes, at the expense of transnational ones.
In response, Cumbria County Council officers have written to the senior official at ODPM raising our concerns so that they can be included in the UK ’s negotiations over these proposals. At the same time, the NW continues to lobby for an Irish Sea cross-border programme. Watch this space….
State Aids
The next phase in the reform of State Aids has begun, with the publication of the Commission’s Sate Aida Action Plan or ‘Roadmap’. This is a consultative document, setting out more detail on the reform of all State Aids, not just Regional Aid (although clearly this is important to Cumbria )
- The document is available on the web (link below) or from Ian at RST
http://www.europa.eu.int/comm/competition/state_aid/others/action_plan/ - The RST will hold a briefing and discussion session with partners in order to frame a Cumbria response to this consultation. Date possibly in late July – will be confirmed ASAP