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Dutch shoot down EU budget rise proposal

02 April 2013, 16:16 CET
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(THE HAGUE) - The Netherlands on Tuesday rejected a European Union request for an extra 11.2 billion euros from member states, with Finance Minister Jeroen Dijsselbloem saying the money should be found elsewhere.

"I cannot agree with the supplementary budget," Dijsselbloem said in a letter to the Dutch parliament, referring to the European Commission's request last week for more money in its 2013 budget to cover bills left unpaid from last year.

Britain has already said the request was "unacceptable" at a time when states are struggling to reduce their deficits.

"The situation would be better served by looking for possible savings elsewhere in the budget," said Dijsselbloem, who also chairs the Eurogroup of finance ministers.

Britain noted that the amount sought is greater than the entire eurozone contribution to the Cyprus bailout.

British MP and Treasury Minister Greg Clark last week called it an "extraordinary" request "at a time when most EU member states are taking difficult decisions to reduce public spending."

Dijsselbloem's reaction was equally strong: "I note that the Commission in its suggestion made no effort whatsoever to find space for savings elsewhere in the budget."

The Dutch finance ministry said the Netherlands contributes around 5.0 percent of the EU budget, meaning it would have to pay 550 million euros ($706 million) towards the increase.

The Netherlands has repeatedly had to make cuts in recent months to bring its deficit back to below an EU limit of 3.0 percent of national output.

Dijsselbloem also questioned the timing of the EC's call.

"It's unclear how the Commission can already say with certainty how much exactly is needed in 2013," he said.

The Netherlands has in the past called for gradual increases in the EU's budget to ensure that spending kept pace with the development of the economies of its various 27-member states.

Dijsselbloem said the Netherlands would discuss the Commission's call "with like-minded states" and would look at forming a bloc to reject the proposal "until a satisfactory solution could be found."

EU Budget Commissioner Janusz Lewandowski however said last week the figures "cannot come as a surprise" given that member states have been cutting back their contributions in recent years.

"This is creating a snowballing effect of unpaid claims transferred onto the following year," Lewandowski said in a statement.

The Commission proposal now goes to the 27 member states and the European Parliament for approval but is certain to face a rough ride with most of Europe facing another year of recession and record unemployment.

Recent negotiations over the EU's 2014-20 long-term budget were divisive as Britain pushed its peers for the first ever overall cut in spending, fixed eventually at 3.0 percent.

The Commission and Parliament argued for an increase, or at least no cut, to boost growth and jobs and lawmakers, who have the final say, have made clear they will not pass the 2014-20 proposal in its current form.

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