Commission proposes a fair and balanced share of the EU budget for Bulgaria and Romania, Brussels, 10 February 2004

The European Commission today proposed to grant Bulgaria and Romania a fair and balanced share of the EU budget after their accession. Limited to a period of three years, this 'package' of some €15.4 billion in commitments, €9 billion in payments follows the same principles and methodology that were applied for the ten acceding countries which will join the European Union on 1 May 2004. It will now be presented to the Council for a first debate, before the Commission makes in spring more detailed proposals for negotiations called 'draft common positions' in the fields of agriculture, regional policy and budgetary provisions.

Commenting on the decision, Commissioner for Enlargement Günter Verheugen said: "This offer is both generous and realistic. If approved, it will help Bulgaria and Romania make full use of their EU membership and play an active role as equal and respected members of the European Union".

As it cannot be excluded that any financial package for Bulgaria and Romania would need to be adapted to reflect future policy reforms or fundamental changes to the overall EU financial framework, the Commission judges it prudent and appropriate to limit this package to a period of three years from the accession of these two countries.

Agriculture

For market measures under the common agricultural policy (CAP), it is foreseen that the EU legislation, including the CAP reform agreed in June 2003, will apply fully to Bulgaria and Romania as from their accession to the Union. The Commission estimates at €1120 million (Bulgaria - €388 million, Romania €732 million) the financial envelope for market measures in Bulgaria and Romania during the first three years of their accession.

The Commission considers, as it did for the ten acceding countries which will join on 1 May, that granting Bulgaria and Romania the full scope of direct payments will not give the right incentives to restructure their agriculture. It therefore proposes to gradually introduce direct payments for farmers in these two countries over a period of 10 years starting at 25 % of the level applicable to the 15 current members of the EU in 2007. This level will then reach 30 % in 2008, 35 % in 2009 and 40 % in 2010. Annual increases of 10 % would continue until in 2016 the same level of direct payments applicable to the EU-15 is reached. The estimated financial costs of such a scheme would amount to €1,312 million until 2009 (Bulgaria - €431 million, Romania - €881 million).

As regards rural development, the Commission also proposes a gradual phasing-in over the three year period to take into account limits on absorption capacity and to ensure a steady application of rural development policy. The total 3-year envelope is estimated at €3,041 million (Bulgaria - €617 million, Romania €2,424 million).

Structural actions (Structural and Cohesion Funds)

The Commission considers that an overall financial envelope covering the first three years of accession should be fixed for both Bulgaria and Romania based on a similar approach as for the ten new acceding countries. This includes in particular a progressive phasing-in of structural actions expenditure in order to reflect the progressive increase of absorption capacity in these countries. These envelopes should also be based on the assumption that rules deriving from the current EU legislation such as the capping of total structural and cohesion funding at 4 % of national GDP should apply. Also, around one third of the total envelope would go towards the Cohesion Fund.

Total structural actions expenditure would amount to €8,273 million from 2007 to 2009, of which €2,300 million for Bulgaria and €5,973 million for Romania.

Internal policies

Full participation by Bulgaria and Romania in the EU's internal policies from their accession should be foreseen. While there are no specific country envelopes under the existing internal policies, an additional €1,012 million would need to be foreseen for the period 2007-2009 to take account of Bulgaria and Romania's accession. In addition, specific allocations will need to be foreseen as follows : €350 million to further support the decommissioning of Units 1 4 of the Kozloduy nuclear plant in Bulgaria in the period 2004-2009; additional funds for Bulgaria and Romania amounting to €82 million for the period 2007-2009 to support the establishment and reinforcement of administrative structures and capacities that are necessary to properly implement the EU legislation.

Finally, the Commission proposes that, if the financial package for the accession of Bulgaria and Romania were to require adaptation after the conclusion of the negotiations, a procedure is introduced to involve closely Bulgaria and Romania in the decision-making process, similar to what was established for the ten acceding countries.

For further information:

http://europa.eu.int/comm/enlargement/index.htm