EU divided over Africa aid, fish funds

Published on Wednesday 16th July 2008

Brussels: European Commission President Jose Manuel Barroso faced a revolt on Thursday by many European Union governments over his plan to use about 1 billion euros in unspent farm funds to help African farmers.

At a debate between governments and the European Parliament on next year's EU budget, lawmakers also criticised plans to pump an extra 600 million euros into Europe's distressed fishing industry to ease a crisis caused by fleet overcapacity.

Barroso told Group of Eight rich country leaders this month the EU would use leftover agricultural subsidies to buy seed and fertiliser for Africa in 2008 and 2009, helping to address the global food crisis.

The Commission, the EU's executive arm, is expected to formally adopt a proposal for the fund on Friday.

But eight EU member states questioned the legality of the scheme, although they did not challenge the merit of the idea, diplomats said.

"Barroso's 'one billion proposal' received a yellow card today. There are doubts if it is compatible with the EU's financial setup," one EU diplomat told Reuters.

Countries opposing the plan included Austria, Britain, the Czech Republic, Denmark, Finland, Malta, the Netherlands and Sweden, the diplomat said.

All except the Czechs are net contributors to the EU's budget, which amounted to more than 110 billion euros last year, with more than 40 percent of it spent on farm subsidies.

EU governments negotiate next year's budget with parliament before adopting their initial position on spending plans.

European Parliament budget spokesman Cezary Lewanowicz said the EU legislature shared the doubts of the governments about using unspent farm funds, although it did not question the need to help Africa.

"We have had enough of political declarations about spending funds when no solid legal basis is provided at the same time," Lewanowicz said.

The Strasbourg-based legislature is also sceptical about a plan approved by EU governments on Monday to dole out 600 million euro for fishermen, partly to cushion the financial pain caused by high fuel prices.

"Here again, no legal basis has been provided for this expenditure. And this comes at a time when the governments are trying to cut next year's EU budget," Lewanowicz said.

Senior officials from finance ministries of the EU's 27 countries called on Thursday for a cut of about 1.7 billion euros in the 116.7-billion-euro 2009 budget proposed by the executive European Commission.

Parliament co-decides with the governments on the final shape of the budget, so the outcome requires a compromise.