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Germany

Schröder Says Germany Can't Fund EU Expansion

The chancellor says Germany will be unable to bring its household budget in order while at the same time providing agricultural subsidies to the EU's eastern European accession states.

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Grating grains: Gerhard Schröder says proposed subsidies for new EU member states will break Germany's fiscal back.

A week before a major European Union summit in Seville, Spain, German Chancellor Gerhard Schröder said Germany would not be able to support an agricultural subsidies plan for the ten EU candidate nations recently proposed by the European Commission.

"The limit of Germany's financial capacity has been reached," Schröder wrote in an editorial published by the Frankfurter Allgemeine Zeitung on Sunday. "We cannot go along with this, even if we wanted to," he wrote.

He said the additional fiscal liabilities associated with EU expansion could create serious financial difficulties for the current 15 members.

Schröder said Germany alone would have to pay an estimated additional two billion euro ($1.88 billion) into the EU agricultural budget if the union grows to 25 member states after 2004 as planned.

It would be impossible, the chancellor wrote, for Germany to foot the bill for agricultural subsidies for the accession states while at the same time eliminating Germany's budget deficit and maintaining a balanced budget by 2004 as required by the EU pact ensuring the stability of the euro.

The Chancellor said he could not allow that, and urged the EU Commission to start giving serious consideration to reforming its agricultural policies.

Additionally, Schröder said the countries of western and southern Europe that have benefitted from subsidies should be called upon to help any new EU members.

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