EU budget bid angers cash-strapped states

European Union budget commissioner Janusz Lewandowski gives a press conference on the 2012 Draft Budget on April 20, 2011 at the EU headquarters in Brussels. -AFP

European Union budget commissioner Janusz Lewandowski described the request as "a delicate balancing act combining austerity and growth boosting measures for 500 million Europeans" but acknowledged that "tough negotiations" loom.

With EU states cutting their own national budgets to tame a debt crisis, the 6.2-billion-euro increase to 132.7 billion euros ($191 billion) requested by the EU's executive arm immediately drew sharp responses.

"We want the best deal for the UK taxpayer and a 4.9 per cent increase in the annual EU budget is not acceptable," a British government spokesman said.

"We'll be working closely with other member states to drive the hardest possible bargain."

Dutch Finance Minister Jan Kees de Jager said the inflation-busting budget request was "out of proportion." He added: "How do we explain to our citizens forced to tighten their belts that the European budget continues to grow?"

British Prime Minister David Cameron has led a campaign against EU spending and has been joined by France, Germany, Finland and the Netherlands in pushing for a freeze from 2012. The five countries pay for half the EU budget.

The EU Parliament and governments already fought hard over the 2011 budget which went down to the wire last year. Lawmakers wanted a six-percent budget increase; in the end they settled for 2.9 percent.

"We are asking for the European budget the same effort being imposed for national budgets, which is the stabilisation of spending," French Prime Minister Francois Fillon said during a Brussels visit on March 14.

The European Parliament's biggest political group, the European People's Party, welcomed the draft budget as "realistic" about economic realities.

"We welcome the emphasis on growth and cohesion in the draft 2012 EU budget presented today and on European added-value," said Marian-Jean Marinescu, the EPP's budget pointman.

Defending the draft budget, Lewandowski stressed that the EU has legal commitments to fund programmes launched in 2007 and failing to pay for them could expose it to lawsuits.

"We cannot punish our citizens, companies, local and regional authorities who have a right to get their bills paid," the EU budget chief said.

He cited an electric interconnection project between Britain and Ireland, noting that the 2012 bill will amount to 24 million euros, more than twice as much as last year.

Aid to poor regions and agriculture account for a large chunk of the EU budget.

The EU executive requested an 8.4 percent increase to 45.1 billion euros for its structural and cohesion fund, a vehicle used to help the development of Europe's poorer regions, notably in the former communist bloc.

Lewandowski said the commission proposed to cut three billion euros from programmes not performing well and redirect the funds to projects that underpin employment and foreign affairs.

For instance, funding for the long-delayed Galileo satellite navigation system would be cut by 24.9 million euros.

Lewandowski said the commission was freezing its own administrative spending and would not request new positions for the third year in a row.

The EU Parliament is not following the same example. With Euro MPs refusing any cuts to their budget, the spending request for European institutions represents a 100-million-euro increase to 8.2 billion euros.