This is sent ‘for the record’. It is no significant change in policy, just there “for the headline” and to show that they know there in Brussels that there’s a wee bit of a slump on.
Christina
FINANCIAL TIMES
10.7.09
EU to propose 2010 budget cut
By Tony Barber in Brussels
European Union governments will on Friday propose to trim the bloc’s 2010 budget by more than €600m in an attempt to keep a tight grip on spending without hindering efforts at economic recovery.
At a meeting with European parliament delegates, the EU’s 27 governments will recommend that authorised expenditure for 2010 should total €137.9bn ($194bn, £118.4bn), about 0.4 per cent less than the European Commission proposed in a draft budget last April.
Negotiators representing the governments and the parliament will set the budget’s final terms, which EU officials said would not be substantially different from those now under consideration.
The EU budget represents little more than 1 per cent of the bloc’s combined economic output, but governments are more conscious than ever of the need to control expenditure as the financial crisis and recession drive their budget deficits and public debts upwards.
According to Commission forecasts, the EU’s total budget deficit will rise to 7.3 per cent of gross domestic product next year, up from 6 per cent this year, 2.3 per cent in 2008 and 0.8 per cent in 2007. Public debt in the EU will shoot up to 79.4 per cent of GDP next year from 72.6 per cent this year, 61.5 per cent in 2008 and 58.7 per cent in 2007, according to the forecasts.
Partly in response to this sharp deterioration in their public finances, governments are determined to keep EU spending under tight control, even if the structure of the bloc’s budget makes it impossible to take an axe to spending.
The biggest category of EU expenditure is that of “growth and employment measures”, which eat up about 45 per cent of the overall budget. Governments want to reduce spending in this area by €100m.
They are seeking €363m of cuts in “preservation and management of natural resources”, a category that includes agriculture, traditionally an important area of EU spending.
Governments also want to deduct €89m from the Commission’s proposed expenditure on aid to developing countries and other EU international activities, and to cut administrative spending by €40m.
According to a background paper prepared by the European Council, which represents the 27 national governments, the proposals seek to strike “a sound balance between targeted cuts in some areas and the financing of political priorities such as measures stimulating growth and employment”.
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