After Constitution Split, EU Widens Dispute to Budget

Retribution, it seems, comes quick in the European Union.

Though not many were saying it on Monday, a letter by six EU nations proposing a cap on the EU’s €100 billion ($123.4 billion) budget beginning in 2007 seemed to take direct aim at Spain and Poland, who many blame for the failure of a weekend summit to agree on a new constitution.

“They know it,” German Foreign Minister Joschka Fischer said at a news conference, according to the Wall Street Journal. “It shouldn’t be necessary to say it.”

The proposal would limit the amount the EU can spend from 2007 to 2013 to 1 percent of the bloc’s gross economic output. The cap was planned to be at 1.24 percent, or €25 billion more, and includes money the European Commission wanted to spend to increase border security, agricultural subsidies, and subsidies to poorer countries. The Commission – the EU’s executive wing – said it would review the new proposal before January.

Angry reaction from Poland

Spain, which in 2002 received €8.8 billion in subsidies from the EU, and Poland, which was also expecting large subsidies, look to suffer under the new proposal. Poland is one of 10 new EU members and will officially join the bloc in May 2004.

Officials of the two governments jointly opposed a clause in the EU’s draft constitution over the weekend that would redistribute their voting rights and weaken their position in the European Commission.

Polish Foreign Minister Wlodzimierz Cimoszewicz was not pleased with the new proposal and said on Monday that the EU didn’t function under the principal of the “carrot and the stick.”

But government officials in Germany, Britain, France, Austria, the Netherlands and Sweden insisted that the proposal wasn’t any sort of retribution. Chancellor Gerhard Schröder, in comments that contrasted sharply with his foreign minister, told German television Monday that the allocation process couldn’t keep going as it had in the past.

"We can’t operate under the philosophy, every one gets to keep what they had and then we add some more on top for the new countries,” he said. “The old EU members, who have profited until now from the EU, must now give to the poorer countries.”

No miracles expected

The proposal is going to make life difficult for the European Commission as the EU expands to 25 members in May next year. A Commission spokesman said the cuts in EU spending would affect the areas of research and development, law enforcement cooperation and joint border controls.

Commission president Romano Prodi appeared exasperated at the prospect of working with a smaller budget.

“Miracles are not my speciality and they don’t seem to come easily to member states either,” he said in a statement. “We will study these ideas seriously, but with only 1 percent of GNI (gross national income), it will not be possible to do what these member states – and all others – expect from us.”