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Opposition rejects potential higher contributions to EU budget

Estonian Deputy Minister for EU Affairs Matti Maasikas.
Estonian Deputy Minister for EU Affairs Matti Maasikas. Source: (ERR)

After the United Kingdom's exit from the European Union, member states may be asked to contribute more to the union's budget. Estonia's permanent representative in Brussels, Matti Maasikas, said on Tuesday that Estonia would go along with such a decision. The statement was immediately criticized by opposition politicians.

The EU's structural funds will receive less money in the next budget period. This directly affects Estonia, as it means that beyond 2020 there will be fewer EU means available to invest in local development. Still, according to Maasikas, Estonia would go along with higher contributions of member states to the EU's budget.

Maasikas told ERR on Monday that there was no way of telling at this point to what extent exactly Brexit would affect the union's finances. The UK's net contribution most recently amounted to some €10 billion a year.

"Of course that's a large sum, but it's a good opportunity to think about whether our only ambition is to plug the Brexit hole, or that perhaps we could all contribute a little bit more," Maasikas said.

He pointed out that the current course of not increasing contributions had been backed most emphatically by the British. They had insisted on keeping contributions below 1 percent of a member's gross domestic product (GDP). "But that doesn't need to be such a religious issue," Maasikas remarked.

EKRE: Increased contributions not acceptable

Martin Helme, chairman of the parliamentary group of the Estonian Conservative People's Party (EKRE), rejected Maasikas' point of view. Saying that Estonia was ready to go along with such a decision certainly was "not true", Helme said.

"According to the Constitution, it's the parliament that holds on to Estonia's purse. This is a principal issue," Helme told ERR on Monday. "We've been told that EU contributions are decreasing. If on top of that our own membership fee or other contributions increase we're getting to the point where the EU is no longer economically beneficial, but harmful," he added.

He also said that of agricultural subsidies paid out by the EU, which amounted to more than half of its budget, Estonia was receiving much less than the EU's "old" members. Where the EU insisted that in terms of contributions made to the budget, every member state needed to contribute to the same extent, the same apparently didn't apply to handing out subsidies.

"It's difficult to believe that the great beneficiaries would agree to giving up or consolidating the subsidies. The EU is a bureaucratic, wasteful, lecturing, and subsidizing organization." Helme said.

Reform Party: Review required how EU spends money

MP for the Reform Party and former minister of finance, Maris Lauri, told ERR on Monday that Estonia would need to have a closer look first how the EU is planning to spend the increased contributions. The EU needed to review its spending in general and see if it isn't intervening too much in certain areas.

Lauri also pointed to the agricultural subsidies as an example. Their share in the union's spending was very large, but it should be considered whether or not they actually made sense as well. "I'd also point to the fact that if the Brits leave, the distribution between member states changes, including their capabilities," Lauri said. "I'm very sceptical. And I wouldn't run and say that Estonia's share should be increased."

Maasikas: More flexibility and more efficient spending needed

A broader debate over the EU's budget could be expected for May 2018, when the European Commission will present its own view and the European Parliament discuss the contents of the next budget bill.

According to Maasikas, there are always plenty of ideas at the beginning of each budget debate leading up to a new EU budget period. Among other things, a recurring idea was a European tax to generate revenue for the union. "But none of these ideas have ever come to fruition. Based on my own experience I wouldn't dare predict that things will be very different this time around," Maasikas said.

The debate how the EU's money should be distributed is as old as the debate concerning its revenue, Maasikas pointed out. The European Parliament's budget committee stated in November this year that 80 percent of the available funding was allocated already in 2014, at the beginning of the current budget period, which leaves very little flexibility for the parliament to actually allocate money.

This needs to improve, Maasikas thinks. A painful example of the failure of the current system is the migration crisis: "When the current budget was adopted in 2013 no one could foresee that the migration crisis would be such a big issue. At the same time flexibility is always an issue for those member states who are paying more than they receive, because they want to be reasonably certain that the sum they'll have to pay out of their state's coffers remains more or less the same every year," Maasikas said. This meant that flexibility would be the most complicated issue in the upcoming negotiations as well.

Still, the EU needed to find ways to save money, or at the very least to allocate its funds more carefully. But as in any parliamentary budget debate, there would be hardly an area where representatives wouldn't demand more funding. In any case, some issues already required more money than previously, for example migration.

"Two thirds of the budget are going to two common policy areas, the common agricultural policy and the EU's cohesion policy. Estonia is getting the lion's share of its direct transfers out of the latter. That we'll reduce the cohesion policy's funding by half, that won't happen. But there will likely be proposals to reduce both of these large policy areas," Maasikas said.

Estonia will receive less out of the EU's cohesion funds anyway as its GDP will grow beyond 75 percent of the EU average.

Editor: Dario Cavegn

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