April 8, 2005

NEWS: EU to triple Research & Development spend in attempt to rival US and Japan (EUROPEAN UNION)


THE European Commission unveiled plans yesterday to triple spending on research and development, transport and education in an effort to create jobs and revitalise the EU?s struggling economy.

The ?132.7 billion (£90.8 billion) pitch to raise competitiveness is aimed at making the Commission?s ?1,025 billion spending plans for the years 2007 to 2013 more palatable to member governments, many of which have attacked them as too costly. The Commission insists that the EU must sharply increase spending on R&D to close the technology gap with America and Japan.

The EU budget also includes proposals to nearly quadruple spending on ?culture, youth media and citizenship? to ?2.5 billion over the seven-year period. This includes ?207 million for a ?citizens for Europe? programme to ?foster co-operation between citizens and organisations from different countries who will meet to develop their own ideas and act in a European environment?.

The EU also intends to more than triple spending on ?freedom, security and justice? to ?8.3 billion. The plans include a new EU border management agency, programmes to help illegal immigrants ? such as ?counselling for unsuccessful asylum seekers? ? and a new fundamental rights agency.

Spending on health and consumer protection will be nearly tripled to ?1.8 billion. The Commission is desperate to use its budget to show that it is no longer focused on the post-war problem of boosting agriculture but is helping to make Europe the world?s leading ?knowledge-based? economy.

Although total spending on agricultural subsidies, given through the Common Agricultural Policy, will decrease by 3 per cent, this remains the single biggest area of expenditure, totalling ?301 billion by 2013. However, because of the overall increase in the budget, agricultural spending will drop from about half the EU budget to less than a third.

Dalia Grybauskaite, the Budget Commissioner, said: ?Today?s proposals clearly reflect a shift towards growth and employment with a focus on knowledge-based activities such as research and innovation. The proposals offer a real added value for EU citizens and represent a good use of taxpayers? money.?

José Manuel Barroso, President of the Commission, said: ?The Commission?s blueprint for investing in Europe?s future is complete. Europe must have the means to match its ambitions.?

The spending plans are provisional and show the Commission?s ambitions as it heads into negotiations with EU member states. Overall, it has asked for a budget of 1.26 per cent of EU GDP, but six member states, including the UK, have insisted that they don?t want to pay any more than 1 per cent of GDP into the budget. The Commission insists that it needs more money to turn the EU?s lofty goals ? more competitiveness, greater research, better education, more security and a bigger role in the world ? into reality.

The budget negotiations, which are meant to be finalised by the heads of state in June, are particularly sensitive for the UK, which is staunchly defending its budget rebate, secured in 1984 by Margaret (Baroness) Thatcher and worth about £4 billion a year.


EU spending plans for 2007-13 (and change over period)

Research ... ?67.8bn (166%)
Transport and energy ... ?20.7bn (367%)
Education and training ... ?12bn (268%)
Protection of environment ... ?2.1bn (37%)
Regional development ... ?264 bn (40%)
Agriculture ... ?301bn (-3%)
Rural development ... ?88.8bn (25%)
Freedom, security and justice ... ?8.3bn (228%)
Health and consumer ... ?1.8bn (187%)
Culture, youth, media and citizenship ... ?2.5bn (267%)
Total (inc other) ... ?1,025bn

SOURCE: http://business.timesonline.co.uk/article/0,,13130-1557846,00.html
Chris Schuepp
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