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Europe

Brussels Faces Uphill Battle Over Use of Unspent EU Funds

Brussels officials said they would go ahead with plans to invest billions of taxpayers' money on energy and internet projects despite political and legal objections from key EU players such as Germany, France and Italy.

Hand holding Euro change

What should the EU do with its spare budget funds?

European Commission President Jose Manuel Barroso wants to use 5 billion euros ($6.4 billion) of what he says are spare EU budget funds to link up the member states' electricity grids, build gas pipelines, create wind farms and spread broadband internet connections to the countryside.

Barroso says the projects would help improve energy security and make Europe greener while at the same time providing a much-needed shot in the arm to the bloc's economy, which is suffering from its worst recession in decades.

But some governments object to the plans, either because they would need to provide the money themselves, or because they are not interested in the projects.

They have now obtained the backing of the EU's legal services in Brussels, which have concluded that most of what the commission calls "unspent" EU euros cannot in fact be used.

"The 3.5-billion-euro margin from the 2008 budget is no longer available," diplomatic sources in Brussels told DPA news service.

The remaining 1.5 billion euros, however, could still be used since they belong to the 2009 budget chapter on agriculture and fisheries, the source said.

A political issue

Broadband internet cables

The EU plans to spread broadband internet connections to the countryside

Barroso's spokesman, Johannes Laitenberger, said on Friday that the commission had been aware of the council's legal opinion for some time.

"And we don't agree with it," Laitenberger said. "This is primarily a political, not a juridical issue. The European Commission will continue to endeavor to find a solution," he said.

The issue is to be discussed by EU finance ministers meeting in Brussels on Monday and Tuesday.

"We have listened to the comments made by the member states ... and we are strongly persuaded that the outcome of the discussions will be fruitful," officials from the Czech presidency of the EU said on Friday.

EU governments agreed in principle to use the 5 billions euros from the EU's budget's reserves at a summit in December, but a final decision is not expected before the spring council in March.

"The question now is who will pay," diplomats said.

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