FINANCIAL
IMPLICATIONS
22. If the Structural
Funds and the Cohesion Fund were extended without reform to the
new Member States, total costs could more than double. It is proposed
that the budget for structural operations, as a proportion of
EU GNP, be maintained at the 1999 level of 0.46 per cent, that
is EUR 287 billion (1999 prices), of which EUR 40 billion would
represent the costs of the Funds in the new Member States once
they had joined, and forms the margin for enlargement.[8]
In effect, the Commission has continued with the numbers in the
July 1997 communication, inflating them by 4 per cent in the move
from 1997 to 1999 prices.[9]
23. The current EU15
would have EUR 218.4 billion available for structural measures.
The Commission's suggested commitments under the Structural Funds
for the present EU15 suggests a decline from EUR 39 billion in
1999 to EUR 32 billion in 2006. This is to be achieved by a combination
of strict application of the 75 per cent of EU per capita GDP
for future Objective 1 regions and a reduction in the population
coverage of Objective 2. This is likely to result in all or most
existing Member States (including the United Kingdom) facing smaller
gross allocations than in 1999, and thus either higher net contributions
to, or lower net receipts from, the EU budget.
24. As yet the Commission
has not published estimates of the consequences for individual
Member States or regions and has said that the data will not be
available until the autumn at the earliest.
25. The share proposed
for the Cohesion Fund amounts to EUR 21 billion. For the Cohesion
Fund the Commission is proposing a flat amount of EUR 3 billion
in each year. This would mean a continuation of the Cohesion Fund
at the 1999 level.
THE
TIMETABLE
FOR
NEGOTIATIONS
26. This Report was
written at an early stage of what are likely to be long and complicated
negotiations on the Commission's proposals. The European Summit
in Cardiff on 15 and 16 June 1998 discussed the timetable for
the whole of the Commission's "Agenda 2000" package
of proposals for structural, budget and agricultural reforms.
The European Council hoped that substantial progress would be
forthcoming at the Vienna European Council in December 1998 in
order to ensure that political agreement could be reached on all
measures by March 1999, under the German Presidency. Much of the
package of proposals is subject to the co-decision procedure with
the European Parliament, for which elections will be held in June
1999. In practice, if agreement cannot be reached by April 1999,
the process will be postponed until after the new Parliament convenes
in the autumn.
3 Seven years is the full span of the period 2000-2006. Back
4
NUTS-the Nomenclature of Units for Territorial Statistics-provides
a breakdown of the European Union's territory for producing regional
statistics which are intended to be comparable across the Union.
There are five hierarchical NUTS levels, built up from administrative
units such as local government areas in the Member States. Further
information is given in Appendix 4. Back
5
COM(98) 131 Final, p 15. Back
6
COM(98) 131 Final, p 27. Back
7
ie the current Objective
5a. Back
8
On 20 July the Financial Times published the closing mid
point synthetic Euro exchange rate with the pound sterling as
0.681771. Back
9
Department of Trade and Industry Explanatory Memorandum on document
COM(98) 131 Final, paragraphs 27-28. Back
