Tug of war between EU27 and Commission

Published on 30 June 2011 at 11:51

The Commission "struggled through" its presentation of the EU budget proposal for 2014-2020, remarks Le Figaro, which reports that "in line with a demand made by Nicolas Sarkozy, the absolute value of agricultural policy funding remains unchanged” [over seven years, 371.7 billion euros or 36.2% as opposed to 39.4% of the proposed global budget of 1025 billion euros, which amounts to 1.05% of the EU’s GDP].

“Less developed Central Europe has obtained a continuation of regional funding, while the priorities of the moment — energy and Internet access — appear to be respected. On the other hand, the financial transaction tax proposed by Brussels to alleviate pressure on the European treasury has already been greeted by a British veto," reports Le Figaro.

The tax on financial transactions (TFT) or Tobin tax, "levied at a rate that has yet to be determined, would affect all the activities of financial institutions within the EU and bring in between 50 and 70 billion per year," which would provide the EU with its own budget resources.

[For Libération](http:// http://www.liberation.fr/economie/01012346321-la-taxe-tobin-revient-du-cote-de-bruxelles), the proposal amounts to "a revolution, especially when you consider that how the alter-globalisation movement has campaigned for just such a measure, while the incumbent EU administration is the most right wing to hold office since 1958 — a faithful reflection of the balance of political power in Europe (22 out of 27 member states have right-wing governments)." However, there is no guarantee that member states will be in a hurry to introduce a tax which a spokesman for the British government, quoted by Euobserver, has described as "unrealistic."

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Another bone of contention between the Commission and member states is the issue of cuts to what Le Figaro terms “eurocrats’ salaries”: this group of "of approximately 50,000 privileged [civil servants], who have benefited from a remarkable immunity to the crisis, will have to endure the most hard-hitting wage review in 50 years," remarks the newspaper.

"To speak of a flare-up between the unions and management — which in this case is the Commission — and the shareholders, otherwise known as member states, is an understatement.” Brussels will have to act quickly to resolve a what is a serious equity and credibility issue: it cannot ask everyone else to tighten their belts while it continues to enjoy such an opulent lifestyle “insists the treasurer of one member state. Eleven countries — including France, Germany, the United Kingdom and most of northern Europe — are now involved in the struggle, and have issued an ultimatum to José Manuel Barroso. Le Figaro has obtained a copy of a letter in which they insist: 'a significant reduction in spending, including cutbacks on wages, pensions and perks, will have to be implemented'. The offensive against “exisiting entitlements” has heated up, at a time when Greece has been forced to make enormous sacrifices."

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