"Early Saturday morning European Union leaders finally brokered a deal on the EU's 2007-2013 budget. The agreement earmarks €22.6 billion for Hungary for that period, €1 billion more than in Britain's last revised proposal, however, around €800 million less than in the original Luxemburg plan tabled in June. Not surprisingly, Hungary's political parties see the figures in a different light.""While Hungary's Socialst-led government has described the agreement as a success, highlighting that, after the Czech Republic, Hungary is the second new accession member to benefit most from the deal in terms of the extent of per capita cohesion allowances, opposition Fidesz has not failed to point out that funds will be some €800 million short of what Hungary could have received in the first Luxemburg proposal, which denies Hungarians around HUF 200 billion.
We believe that, for all its downsides, the agreement is, at the end of the day, a positive one for Hungary and that Hungary did its utmost to secure the best possible deal. As far as the extent of the funds is concerned, analysts have stressed that a more crucial question is now whether Hungary will be able to make full use of the abundance of resouces the EU will make availble from 2007.
The agreement contains a number of pluses. It allows Hungary to finance the cost of cohesion projects up to 85% with EU funds, while municipality funds will not be liable to VAT. These will save the central budget an estimated combined €3-3.5 billion. In addition, the deal has also retained an extra €140 million for the Central Hungarian region as proposed by Britain, which in principle it would not be entitled to for its development level.
Another clear achievement of the talks is that Hungary will be able to spend its cohesion funds on any housing redevelopment projects, rather than only on "social" programs. According to Prime Minister Ferenc Gyurcsány, the only major negative of the agreement for Hungary is that compared to the original 2013, it can only use the prerogative to spend the funds for an extended 3 years after they have been allotted until 2010.
The deal, however, is viewed quite differently by Hungary's main opposition party Fidesz. According to Viktor Orbán, Hungary can talk of political rather than economic success in connection with the talks. He noted that compared to the original €25.9 billion put forward by the European Commission and the €24.9 billion proposed in the European Parliament, Hungary will get only €22.6 billion, a definite setback.
With all the wrangling, the final word over the budget lies with the European Parliament, whose president, Josep Borrel was quick to note after the summit that the EP's original budget proposal earmarked some €20 billion more for spending, which could evenetually notch funds for some members even higher."
Source: portfolio
Click here for the source!
20.12.2005