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Infrastructure pays the price


Friday 8 February 2013

During his briefing to the press after today's marathon EU budget negotiations came to a close, UK prime minister David Cameron hailed the deal as something that would finally force the EU to "focus on the quality of spending rather than on the quantity.”

The deal reached today would cut the new 7-year EU budget for the first time since 1958, €80bn down from what the European Commission proposed. This will surely be resisted by a furious European Parliament, which still must sign off. But Cameron admonished MEPs for their recalcitrance, warning that a standoff will plunge Europe into uncertainty for future investment.

“As we've heard over the past 48 hours, it's much better to have a deal," he told us. "When you have a deal countries right across Europe can plan for infrastructure spending and important budgets.”

Given his professed concern for infrastructure spending, one wonders if Cameron was at all bothered that in the rush to cut down the overall figure by an amount suitably impressive for his domestic audience, the budget for EU infrastructure spending was decimated.

This is not a reformed budget, it is simply a reduced budget. As predicted, it was the areas without powerful defenders that were savaged in this process. The Common Agricultural Policy (CAP) was not reformed in any meaningful way, in fact this agreement undoes the reform the Commission had proposed to make the CAP more environmentally-friendly. The same goes for cohesion funding, the area with the most corruption and abuse – no change.

As Benedicta Marzinotto of the Bruegel institute observed tonight, “No real reform of the EU Budget has been undertaken at this stage; the EU Budget continues being perceived as an entitlement budget with each member state fighting over ‘juste retour'.”

So since powerful interests refused to let any of the really wasteful areas of EU spending be cut, what was cut instead? Drastic cuts went to spending on research, environment, international aid and - most astonishingly for a continent desperate for growth – infrastructure spending. Farming wins over bridges.

The Connecting Europe Facility, proposed last year to improve Europe's roads, rails, commuications and energy connections, was cut from €50bn to €29bn in this negotiation. This is one of the few areas of EU spending, along with research, which has actually been demonstrated to spur growth.

Once news of the savage cuts to energy infrastructure became clear, energy commissioner Gunther Oettinger could only try to console potential infrastructure investors, saying tonight the paltry amount left was “at least a door opener,” but that Europe would now have to make tough choices. “For example, we cannot co-finance all grids necessary to connect off or onshore wind parks to the big cities," he said.

During Cameron's briefing, I couldn't help but notice that not one British journalist asked about the actual content of the budget deal. All of the questions were related to the headline figure; how much was cut, and how much the British taxpayer would be paying.

Once that press briefing was over I wandered over to the briefing being held by French president Francois Hollande, who had resisted the budget cuts and has emerged from these talks looking defeated. There, Hollande was being asked by French journalists about the specific amounts being transferred from pillar two to pillar one of the CAP. This was followed by a question about the plan for research and infrastructure.

So I wonder, who is really preoccupied with quantity over quality here?

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Observations and comment from European Voice's environment reporter.

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