EU budget to be €29 billion more than agreed at summit

THE European Union’s budget will be €29 billion bigger than everyone thought when it was agreed at a summit hosted by British Prime Minister Tony Blair last December, it was claimed yesterday.

EU budget Commissioner Dalia Grybauskaite used an interview with a Brussels magazine to insist that all the published figures so far have been inaccurate.

The news will not just be a surprise for Mr Blair, who gave up £7 billion (€10bn) from the British rebate in order to win a deal on euro spending for 2007-13.

It will also surprise Euro MPs, who wanted a much bigger budget and are set to approve a final figure in May.

The summit deal was for a €834bn EU budget.

Now the commissioner says the real final figure is €872bn.

Ms Grybauskaite explained in The Parliament magazine that there are certain "financial instruments" in addition to the agreed and published budget.

They involve contingency spending in case of major disasters and humanitarian aid requirements, a special development aid fund, and a Globalisation Adjustment Fund to help workers hit by globalisation.

But a British Government spokesman said: "The commissioner is confusing two different pots of money.

"There is the budget deal agreed by the Prime Minister, and then there is a separate pot of aid money, much of which will only be spent in case of need, such as flood disasters. And some of it will in any case be drawn from unspent money in the 2007/13 budget itself.

"Only a small part of the extra money the commissioner is talking about is part of the budget deal

an emergency aid reserve worth about £1bn (€1,44bn). That, of course, will only be used in appropriate circumstances. The rest was there before the budget deal, is unchanged by the budget deal, and does not affect the British rebate or anything else.

"The Commissioner is being disingenuous. She is upping the figures to make it look like a bigger budget."

Mr Blair ran into political flak after the December deal for failing to get the French to give up any part of other €8.67bn a year farm subsidies to help cut costs. He, on the other hand, had conceded £7bn in rebate money.

But he insisted it had been a good deal which kept a lid on EU spending at a time when national governments were having to make financial cutbacks in their domestic budgets too.

Euro MPs complained bitterly that the deal was not enough to finance the EU properly between 2007/13, and they topped up the budget to nearly €837bn - never suggesting that the budget figure was actually much higher, as Ms Grybauskaite claims.

In the magazine article, the commissioner, a former finance minister in the Lithuanian government, insists: "It is not accurate that EU institutions finally agreed only €864bn. We negotiated €900bn."