Financial Express: Greece, Portugal win; northerners lose in EU budget

Financial ExpressGreece, Portugal win; northerners lose in EU budget

The report published on Thursday by the European Commission on how member states benefit from the EU mirrored battle-lines drawn in stalled negotiations on the bloc’s 2007-2013 budget shows Northern States lose in EU budget.With the exception of France and Britain, who benefit from generous subsidies.

The poorest EU members want a substantial increase in overall budget spending which amounted to some 100 billion euros ($122.2 billion) last year. They are also fighting for the bloc’s generous regional aid funds. The report showed Greece and Portugal, the poorest countries in the pre-enlargement EU of 15 members, netted the equivalent of 2.52 percent and 2.37 percent of their respective gross national incomes (GNI).

That was more than the 2.13 percent and 1.82 percent received respectively by the much poorer Lithuania and Latvia, which were among the 10 countries that joined the EU in 2004. The report said the Netherlands continued to be the EU’s biggest net contributor, paying 0.44 percent more of its GNI into the common pot than it took from it. Germany, the EU’s biggest net payer in nominal terms, has a negative balance of 0.33 percent of GNI and Sweden 0.38 percent of GNI.

Those three countries are the staunchest advocates of freezing the EU budget in 2007-2013 at the current level of about 1 percent of GNI, compared with the Commission’s proposal of 1.14 percent of GNI. The bloc hopes to agree on the new budget in December. The report also showed Britain and France, among the wealthiest EU nations, are less financially burdened by the EU. Their negative budgetary balances amount to only 0.16 percent and 0.19 percent respectively of GNI. France benefits from the EU’s generous farm aid programme and Britain enjoys a rebate from the coffers in Brussels, won in 1984 by then prime minister Margaret Thatcher. A demand by France for a reduction in the British rebate, worth some 5.2 billion euros last year, and Britain’s insistence on slashing farm spending were the main reasons for the collapse of the budget negotiations at an EU summit in June.