EU Budget Draft Cuts Energy Share to 7B Euros

From Reuters

Oct 30 (Reuters) – The EU’s first energy budget has been cut to a maximum of 7 billion euros ($9.03 billion) under a compromise proposal on the bloc’s long-term financing, which governments will haggle over in the coming weeks.

Under its original budget proposal, the European Commission set aside 9.1 billion euros for strategic cross-border energy infrastructure. It was the first time the Commission had ring-fenced money for the sector.

The compromise seen by Reuters shows the detail of cuts of at least 50 billion euros to the proposed 1 trillion euro budget for 2014-2020 as Cyprus, holder of the rotating EU presidency, seeks to mollify objections from the biggest national contributors.

But the compromise has already been criticised by governments on both sides of the spending debate, as well as by non-governmental organisations.

The European Commission, meanwhile, defended its initial plan.

“The Commission remains committed to its proposal, which strikes the right responsible balance in times of crisis, both in the overall amount and in the balance between policies,” it said in a statement.

Already, under the Commission’s proposal, energy was a mere fraction of the overall budget and also just a tiny portion of the amount needed to upgrade European energy infrastructure.

The Commission has estimated 100 billion euros is needed just to improve energy transmission lines in order to achieve efficiencies through a single, connected European energy market, making use of an increasing share of renewable power.

The idea of providing some EU cash for “projects of common interest” – such as a southern gas corridor to diversify supplies – is to trigger much greater private investment. EU member states would have to agree on which projects were of strategic importance.

“The European budget was always intended to ensure that the public interest would be represented, in the context of a much larger amount of money needed from the private sector,” said Jason Anderson, head of climate and energy policy at WWF European Policy Office.

“Cutting the EU budget could put important goals of security, market integration and environment at risk.” ($1 = 0.7749 euros) (Reporting by Barbara Lewis; editing by Rex Merrifield)

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