EU budget chief: Estonia proved a success-story

Photo: AFP/SCANPIX

As assessed by Janusz Lewandowski, budget commissioner at European Union, Estonia gained an excellent position at the recent financial framework talks.

Yesterday, by decision of Council of the European Union, the next seven year budget talks finally came to their official end. All in all, the negotiations went on for nearly two and a half years – the difficult economic situation causing tensions and forcing the European leaders, for the first time ever, to shrink the size of budget as compared to the one before. Talking to reporters, the EU budget commissioner Janusz Lewandowski (62) ranks Estonia, as other Baltics, among the winners.

At long last, the next seven year’s budget has now been ratified. What would you say regarding results achieved by Estonia?

For the Baltics, in the run-up to the negotiations, the main problem was the too small direct aid for agriculture; thus, Estonia, Latvia and Lithuania set it as their goal to have aid increase as close to the EU average as possible. 

EU average is €260 per hectare. In Poland, for instance, it’s €200, Latvia gets under €100 and Estonia’s level is very low as well. Therefore, the Baltics were pressing for increased direct aid to improve competitiveness.

All three Baltics succeeded in gaining an excellent net position for the future; from that aspect, we may indeed call Estonia the success story of these negotiations.

Estonia’s key issue being direct aid, what was it about for Poland?

Keeping the cohesion fund money. As, due to shrinking economic growth, this fund is cut by 40 per cent Europe-wise, Poland mainly focussed on that.

For Poland also, direct aid for agriculture is important; even so, that battle was waged for them by the Baltics. As a result of that, Polish direct aid ought to reach EU average by end of the budget period.

Who benefit most from the budget, the poorer or the richer member states?

The budget indeed is smaller than in the last period; even so, the poorer stated will not lose out by that. It is more problematic for the states which, as new and poorer member states are added, no longer fall under EU average – yet having seen no improvement in their actual living standards.

This does not concern Estonia or Poland, but it does touch certain regions in Italy and Spain, Greece and the eastern part of Germany.

This is a statistical problem: as poorer states are added, like Romania and Bulgaria, some regions rise above average, as if. They are no longer eligible for aid, having gained no actual added wealth. But EU does have means to compensate for this.

As compared to the previous budget period, the EU leaders cut the budget nearly three percent. How would you comment the historic decision?

We have to face reality. Taxpayers in Sweden, Holland, Germany and Austria are no longer willing to increase payments into EU budget while also giving into the European Stability Mechanism (ESM) and the rescue packages of several states.

At the same time, this budget is more flexible that the earlier ones. We do indeed have to accept the smaller amount of money; however, the options to use it are more diverse.

For the first time, the seven-year budget has shrunk. In Europe and eurozone, the economic situation is not favourable, unemployment posing a major problem. Will the new budget be able to solve that?

I would not want to raise the expectations too high. On the European level, we are doing our best; even so, we cannot give promises that we will not be able to keep.

The main means to solve that problem are in the hands of the member states themselves. All we can do is offer aid, from the social fund for instance; even so, the initiative needs to come from the member states. For the problem of unemployment, the new EU budget holds no magic solutions, so let’s not have our hopes too high.

At the same time, budget investments into infrastructure, for instance, can also create jobs; therefore, indirectly, it can be considered a means to cut unemployment.

The budget’s now been agreed. Will that mean the member states can start using the money, from the very 1^st of January?

Agricultural direct aid is accessible at once, from the start of the year. When it comes to projects financed from rural development support and Cohesion Fund, several stages will have to be completed before the money is obtained.