EU Tries To Reconcile Differences On Spending And Priorities
Sovereign states frequently have difficulty in approving a budget. These difficulties are more than compounded when the 27 nation European Union has to decide on a seven-year budget by the date of the European summit of November 22-23.
There are already getting predictions that the summit may drag on for 4 days in order to hammer out an agreement. The one factor that weighs heavily in favor of approving some compromise budget is the knowledge that failure to approve a budget will send a very discouraging signal to the capital markets about the EU's ability to get its act together.
The member states are divided over the size of the budget and where to economize. Nations such as Britain and the Netherlands, which are imposing austerity on their own citizens, believe that the European Union budget has to be cut accordingly.
British Prime Minister David Cameron is under heavy pressure from his Conservative Party to secure a cut when sentiment in the party for exiting the EU is growing. The newer members of the EU, predominately the Eastern Europeans who have benefited from assistance, want minimal cuts to the budget.
Cyprus, which currently holds the EU rotating presidency, has proposed a budget that cuts the "cohesion" funds aimed at equalizing conditions between the poorer and richer countries by 14%. This, as could be predicted, aroused protests from the poorer countries. Poland, which had been named as a major beneficiary of the cohesion funds, is particularly alarmed.
The Cypriot draft makes relatively minor cuts in aid to agriculture, the biggest item on the EU budget. The Common Agriculture Program benefits farmers primarily in France, Germany and Italy. Countries such as Britain and Sweden, that essentially import their food supply, or Denmark with its efficient agricultural sector, want deeper cuts in the CAP, given the small percentage of the workforce employed in agriculture and the agricultural sector's minor contribution to the collective GDP. The budget, they claim, should emphasize research and other growth friendly items.
One proposed area of cuts is in the perks to European Union staff members - and this has triggered threats of a strike by EU workers. They plan a one-day strike on November 8 and, if that goes unheeded, another strike on November 16.