Commission chief protests attempts to cut his budget

(BRUSSELS) - European Commission president Jose Manuel Barroso protested on Wednesday against efforts to cut the 2013 European budget, saying they undermine plans to promote growth and jobs.

In a letter sent to European heads of state and government, Barroso lashed out at a proposal to cut the draft budget by five billion euros ($6.1 billion).

"It would have serious consequences for economic recovery as these cuts would affect regions, researchers or SMEs (small- and medium-sized enterprises) with the risk that they would then be starved of finance," Barroso added.

Three major contributors to the EU's annual budget, Finland, France and Germany, have recommended it be cut by five billion euros, while Britain, the Netherlands and Sweden have called for an even bigger cut.

The Commission has submitted a draft 2013 budget that includes 138 billion euros in spending, an increase of 6.8 percent from the 2012 exercise.

The draft budget has been backed by 17 of the EU's 27 member countries.

At the same time, the EU is piling pressure on heavily-indebted eurozone countries like Greece, Italy, Portugal and Spain to cut their own budgets.

Barroso told EU leaders: "I recognise and welcome the courageous efforts that many of you are making to consolidate public finances.

"The draft budget proposed by the Commission took full account of this context by freezing new commitments in real terms."

But he underscored that "all heads of state or government signed up to a Compact for Growth and Jobs which includes very specific commitments in relation to the financing of the economy."

The Commission head stressed that "the negotiations on the 2013 budget are already compromising the spirit of our recent agreement by not making sufficient funds available to enable the European Union to pay agreed levels of support for many growth-enhancing projects."

In addition, the Commission had already committed to payments for citizens, companies, researchers, farmers, students and regions, Barroso noted.

"Putting into question the ability of the EU to honour its obligations undermines the credibility of our funding programmes and indeed of our commitment to support growth," he said.

Fifteen EU nations (Bulgaria, Czech Republic, Estonia, Greece, Hungary, Lithuania, Latvia, Malta, Poland, Portugal, Romania, Slovenia, Slovakia, Spain and Croatia) say a proposed one-trillion-euro 2013-2020 budget is an "absolute minimum" and oppose any cuts.

Net contributors to the EU budget, who responded by forming the "Friends of Better Spending" group, oppose any increase in EU spending.

The EU budget is always chaotic to negotiate: a big bloc led by France insists spending on agriculture is sacrosanct; while another led by Poland maintains so-called "cohesion" funding, or investment in poorer regions, must be kept high.

Between them, these two EU policies account for 80 percent of bloc spending.