Member states are asked to find more money for EU pot.

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Author: Clarke, Philip philip.clarke@rbi.co.ukRiley, Jonathan

EURO-MPs have called on member states to put more money into the EU's coffers, to help pay for enlargement and rural development, and to avoid cuts to farm spending.

The special temporary committee, set up to review the EU Commission's spending proposals, finalised its report last week. This will be fed into the heads of state summit in Brussels on June 16, which is meant to agree funding levels for the next seven years.

To the commission's relief, the parliament is seeking total spending equivalent to about 1.14% of gross national income, countering the 1% demanded by the six net-contributor countries, led by Germany and the UK.

The commission had warned that anything less than 1.14% would lead to cuts in direct payments to farmers and a dilution of its rural development plans, (News, May 13).

"The parliament has taken the right approach, with policy needs as the starting point," said commission president, Jose Manuel Barosso. But the parliament is also suggesting that, should heads of state fail to agree enough new money for Romania and Bulgaria, which join the EU in 2007, then direct payments to farmers in the EU-15 could be part-financed by national governments.

This, says the commission, is a step towards re-nationalisation of the CAP and should be resisted.

Meanwhile, discussions continued in Brussels this week on a new package for CAP funding, which is due to be signed off by EU farm ministers at their next meeting on May 30.

A key part of this will be to set the date for converting single farm payments from euros to pounds. The proposal currently suggests using the exchange rate on Sept 30 each year, though some member states want to use a monthly average.

The CAP funding package will also streamline rural development spending into a single budget and set the terms for scaling back CAP payments (financial discipline) if the budget is breached.

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By Philip Clarke, Europe editor

Edited by Jonathan Riley, 020 8652 4915