EU proposes smaller budget for 2009

The European Union's executive arm proposed an austere 2009 budget for the bloc on Tuesday, outlining plans for a cut in spending for the first time in several years.

EU proposes smaller budget for 2009
The European Commission's draft budget set spending at 116.7 billion euros ($180.7 billion), compared with 120.7 billion euros planned for 2008, focusing as usual on aid to the bloc's poorer regions and agricultural subsidies.

EU Budget Commissioner Dalia Grybauskaite said the fall was due mainly to the bloc's budget planning cycle.

By 2009, most lines from the EU's previous long-term budget for 2000-2006 will have been spent but funds for many projects in the 2007-2013 spending cycle will not have started flowing.

"This is a stable, realistic budget where we have managed to shift the centre of gravity of spending firmly to long-term economic development and employment without putting other areas at risk," Grybauskaite said.

In relative terms, the budget will shrink to 0.90 percent of the EU's economic output, compared with 0.96 percent this year, which is likely to please the bloc's net paying member states such as Germany, Britain, the Netherlands and Sweden.

It will be the EU's second consecutive annual budget in which spending on measures to boost economic growth and research and development will be higher than farm expenditure, which was traditionally the biggest item.

The two spending areas will account for 45 and 43 percent of the budget respectively.

The new EU priorities of fighting climate change and ensuring energy security received the biggest increase in financing, up 10 percent to reach a total of approximately 17 billion euros.

The EU is to overhaul its budget from 2014, with negotiations due to start next year.

Until recently, many politicians and analysts had expected budget reform to shift EU spending away from agriculture.

Grybauskaite said that current problems with food supplies and soaring food prices were expected to influence the budget overhaul. He did not elaborate.

France, long the biggest single beneficiary of the EU's massive farm subsidies, has called on Europe to produce more food in response to the crisis.

The draft 2009 budget will now be scrutinised by the EU's 27 governments which in the past have cut the spending plans, something the European Parliament is likely to resist.

Reuters
Last Mod: 06 Mayıs 2008, 17:16
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