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The Warsaw Voice » Business » October 26, 2012
Business & Economy
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EU Budget Battles
October 26, 2012   
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Poland’s economic growth in recent years, the fastest in the European Union, would have been impossible without funds from the EU budget. In the 2007-2013 period, Poland received 67.3 billion euros for the development of infrastructure, to support innovative companies and for regional and human capital development. This means that Poland was the biggest beneficiary of European funds over the last six years. Will it be able to maintain this position in the coming years? It depends on decisions made by European politicians. Negotiations on the EU’s budget for 2014-2020 should be completed by the end of this year—yet this deadline looks unrealistic. The problem is that member states have been unable to come to an agreement on the level of the budget.

The European Parliament supports those who, like Poland, are struggling to at least maintain the current level of the budget. According to the proponents of this view, the future budget should be about 5 percent higher than the current budget, plus a 2-percent inflation rate. But some countries want to reduce the pool of funds set aside for cohesion policy under the new budget. These countries include Britain Germany, France, the Netherlands and Finland—each of which contributes more to the EU budget than it gets from it. The initial proposal of the European Commission, unveiled a year ago, was a budget of 988 billion euros. Today net contributors want it to be up to 150 billion euros lower. They are arguing that such a change is necessitated by the financial crisis raging in Europe.

Cuts in spending on cohesion policy, for example, could cost Poland dear. A year ago it was said that Poland could receive 80 billion euros in EU funds; today it looks this amount may be 5 billion euros lower.

Polish MEPs, however, are optimistic. Danuta Hübner, a former European Commissioner who is now a Eurodeputy and chairs the European Parliament Committee on Regional Development, says that even under realistic and pessimistic scenarios, Poland will continue to be the largest recipient of cohesion policy funds. Hübner says she expects that this pool of funds will not be smaller—and probably bigger—than it is at the moment. Another Polish MEP, Jerzy Buzek, former president of the European Parliament, shares this view. He argues that the new EU budget will be as beneficial for Poland as the current one. And cohesion policy is unlikely to collapse, according to Buzek.

The final decisions on the shape of the EU’s new seven-year budget will probably be made during a special summit of leaders and finance ministers from European Union member countries, to be held in late November in Brussels. Until then some tough negotiations are likely to be held among European politicians over EU money.
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