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Europe

New Plans to Ease Burden on EU Net Contributors

A new proposal tabled by Sweden and the Netherlands aims to reduce future EU funding by cutting funds to poorer regions of the current 15 Member States.

The idea was proposed at an informal meeting of finance ministers over the weekend and would go some way to easing concerns of net contributors to the EU budget that they are being asked to pay too much into the Union's coffers. Sweden and the Netherlands are two of the six countries - along with the UK, France, Germany and Austria - that wrote to Commission President Romano Prodi last December asking him to cap the EU budget at one percent of gross national income. The current ceiling is 1.24 percent of GNI. But Prodi ignored the request, unveiling instead a budget of roughly €900 billion over the period and igniting a row between the Commission and its main sources of cash. A source close to the Swedish government said that if current member states were to fund their own poorer regions after enlargement, then the budget could be capped at one percent without touching any other categories of spending. But funding would still go to poorer regions of the new member states. All finance ministers reportedly agree that the principle of supporting the poorer regions in the 10 accession countries should remain. As it stands, regions in the current EU-15 whose gross domestic product (GDP) is less than 75 percent of the EU average are eligible for EU support. After 1 May, the average EU GDP will decrease, meaning that 17 regions - mainly in Southern Europe - will stop being eligible for this funding, despite not actually getting richer in real terms. (EUobserver.com)

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