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EC Ministers Fail to Reach Budget Accord

December 10, 1987|From Reuters

BRUSSELS — European Community ministers Wednesday abandoned last minute efforts to agree on a 1988 budget, deepening the bloc's financial crisis following last weekend's failed EC summit in Copenhagen.

The EC's executive commission immediately announced that the community would resort to emergency funding from Jan. 1 and that it would take ministers to court to force them to agree on a budget.

"If there is no budget established by July, the community will be in real financial difficulties," commission Vice President Henning Christophersen told a news conference.

"For some spending, we will run out of money in March or April," he added.

In marked contrast to their usual all-night bargaining sessions, the ministers abandoned their talks after only two hours, concluding that their task was impossible.

Last weekend's summit meeting failed to reach agreement on a drastic overhaul of the community's finances to curb spending on agriculture and increase revenue from the 12 member states.

Without the extra money, the community faces a deficit of at least $6 billion in 1988. Its founding treaty forbids borrowing to cover the gap.

Apart from the commission, the European parliament also will take the ministers to court over the failure to meet their obligations under the EC's founding treaty.

The leaders' failure in Copenhagen--they agreed only to meet again in Brussels on Feb. 11-12--appears to have taken the steam out of most ministerial meetings. EC agriculture ministers are meeting today, but the crucial problem of controlling farm spending is not on their agenda.

The Danes, whose term as the community's president runs out at the end of this year, put forward similar budget proposals Wednesday to those that failed to win a majority at the last budget meeting in October. They involve putting extra spending into the budget in anticipation of a summit agreement to provide more revenue.

But Britain, which is the most insistent on the need to curb farm spending before increasing resources, says that would be illegal.

Poorer countries such as Spain and Greece also oppose the plan since they do not want to prejudice the outcome of the wider talks, which would bring a big increase in spending on them, by accepting a temporary compromise on the budget now.

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