Zweden en Nederland willen diep snijden in structuurfondsen (en)

EUOBSERVER / BRUSSELS - A new proposal tabled by Sweden and the Netherlands aims to reduce future EU funding by cutting funds to poorer regions of the current 15 Member States.

The idea was proposed at an informal meeting of finance ministers over the weekend and would go some way to easing concerns of net contributors to the EU budget that they are being asked to pay too much into the Union's coffers.

Sweden and the Netherlands are two of the six countries - along with the UK, France, Germany and Austria - that wrote to Commission President Romano Prodi last December asking him to cap the EU budget at one percent of gross national income. The current ceiling is 1.24 percent of GNI.

But Mr Prodi ignored the request, unveiling instead a budget of roughly 900 billion euro over the period and igniting a row between the Commission and its main sources of cash.

One percent is possible

A source close to the Swedish government said that if current member states were to fund their own poorer regions after enlargement, then the budget could be capped at one percent without touching any other categories of spending.

"It's up to the current Member States to support their regions", said the source.

But funding would still go to poorer regions of the new member states. All finance ministers reportedly agree that the principle of supporting the poorer regions in the 10 accession countries should remain.

As it stands, regions in the current EU-15 whose gross domestic product (GDP) is less than 75 percent of the EU average are eligible for EU support.

After 1 May, the average EU GDP will decrease, meaning that 17 regions - mainly in Southern Europe - will stop being eligible for this funding, despite not actually getting richer in real terms.

Currently, the Commission proposes that funds for these regions be phased out gradually over time.

Commission sources say that the regional policy commissioner, Michel Barnier, was poised to propose that these regions receive 85 percent of their current level of funding in 2007, declining to 60 percent in 2013.

But Sweden and the Netherlands want to see funding cut immediately after enlargement, in what is known as "renationalising" regional policy.

The Commission is adamant, however, that EU funding should not be cut to one percent of GNI, as the "letter of the six" proposes.

Budgetary Commissioner Michaele Schreyer told journalists today that "in the total history of the financial perspectives [EU multiannual budget], there has never been a level of one percent".