Cause and Effect in European Politics and Law

European Council/June/2005

Adelina Marini, June 16, 2005

The questions over the budget of the European Union for the period 2007-2013 will be in the centre of attention of the European Council today and tomorrow. The two conclaves, in which the foreign ministers of the member states participated, an agreement over the financial perspectives was not reached. The disputes circle around two main pillars. The first is about what part of the gross national income should form the financial engagements and here the main participants are the biggest net contributors like Germany, the Netherlands, Britain and the poorer countries on the other side. The second pillar is the rebate of Britain. Now on national level the clash of interests in the European Union have a great influence on Bulgaria in tow ways: if the leaders of the Union do not accept the proposal of the Luxembourg Presidency, the approval of the financial perspectives will make it impossible for the agreed programs to be introduced.

Another problem is to ensure that Bulgaria will receive the 8 billion euro, which EU did not foresee when debating the future expenses over the agriculture policy in 2002. In the draft agreement for the financial perspectives, prepared by the Luxembourg Presidency, it is envisaged that the amounts of money, related to the common market and direct payments shall be the same as agreed in October 2002 and that is 42 billion euro plus another 2 billion, which was forgotten because it was not taken into account that Bulgaria and Romania might join the Union in 2007. On 10th of June in Slovenia Marianne Fischer Boel, member of the European Commission responsible for the agriculture and rural development said that the so called “Brussels’ ceiling”, agreed in October 2002 had been determined so that it could guarantee the payments for the farmers of the 25 member states by the end of 2013. She also said that now a lot of voices support the idea for direct payments and market measures for Bulgaria and Romania who should be envisaged when spending this money. Said in a simple way, 27 member states should operate with money for 25 and this directly affects the farmers in the 25 member states. Yesterday the minister for European affairs Meglena Kuneva said that the money for Bulgaria and Romania for the first 3 years after joining, if it happens on the 1st of January 2007, is guaranteed and “that sum is mentioned in the treaty, which we signed on the 25th of April in Luxembourg”. How is the financing going to be secured after 2009, she refused to foresee.

So, what is going to happen if there is no agreement over the budget? According to the member of the European Parliament Reimar Boege with the French and Dutch “no” to the Constitution and with the possible early elections in Germany which might mean that the present government in Berlin might not want to engage with future investments, it will be very difficult to reach an agreement. This doesn’t mean though, that it is absolutely impossible. It is not impossible a compromise to be reached during the British Presidency which starts from the 1st of July or during the Austrian from 1st of January 2006. But if there is no decision now, it is possible that the price of enlargement and the expenses are made on an annual basis. In that case the contributions of the member states cannot be diminished to 1 % of the gross national income because this would mean almost 20 % less than the proposal of the Commission 198 billion euro for the period 2007-2013. In 2006 the agreed ceiling of expenses is 1.11 % of the gross national income. 1 % ceiling is for the next, 2007, when Bulgaria and Romania are supposed to join the Union would mean 9 billion euro less only for one year. We shouldn’t underestimate the fact that next year the ten newcomers would have reached only one third of their normal financing on most of the important policies of the Union as the Cohesion policy and the Common agriculture policy (CAP). It is not necessary to mention all damages which will occur when the ceiling is diminished because it will act according to the domino principle and would influence absolutely all fields, financed from the budget of the European Union. Of course, it is not only about money but about the future of the European Union for which we talked about quite a lot. The Presidency said that an agreement today or tomorrow, here in Brussels, would be a positive message that the Union functions and nothing is over after the blows which the Constitution endured. And this is not exaggerated.

And here we come to the second very important issue on the European Council the ratification of the Constitution in all those member states, which will hold a referendum on the subject. There will be referenda in Luxembourg, Denmark, Portugal, Poland, Ireland, Britain and the Czech Republic. The countries which still haven’t decided whether they should hold a referendum for the Constitution or not are: Sweden, Slovakia, Latvia and Slovenia. Bulgaria is for the first time on a European Council presented as an observer after it signed the Treaty of accession. Bulgarian representatives now have the right to take part in all institutions.