Ministers expected to slash 1997 budget

Date: 18/07/1996

By Rory Watson

PRESSURE is growing to freeze next year's EU expenditure at 1996 levels as member states continue to clamp down on public spending.

Faced with the looming deadline for the single currency, budget ministers are expected to slice 2.5 billion ecu off the Union's draft 1997 expenditure levels when they meet next week.

The cuts are likely to fall most heavily on farm and regional spending - losing 1 billion ecu each - but would be felt in almost all EU policy areas. They would represent the first ever attempt by finance ministers to rein in their more free-spending agriculture colleagues.

The planned onslaught on next year's 90-billion-ecu Union budget is directed at already unusually stringent financial proposals drawn up by the European Commission, which foresaw only a 3&percent; expansion in expenditure.

The draft 1997 budget has a long way to go before it is finally approved in December.

The European Parliament, which shares budgetary powers with EU governments, is taking an equally firm line on agricultural and regional spending. But instead of the across-the-board cuts favoured by ministers, it is likely to argue that the farm savings be placed in a special reserve fund and that reductions in regional spending be targeted so that the Union's least-developed areas do not suffer.