COUNCIL OF MINISTERS: DUTCH KICK OFF THEIR PRESIDENCY UNDER THE SEAL OF LIBERALISM.

Financial perspective.

The Committee of Member States' Permanent Representatives to the EU (COREPER), which prepared the report on the financial perspectives for 2007-2013 under the Irish Presidency (see Europe Information 2876), should keep control of the project with the support of "Friends of the Presidency", but the heart of the negotiations at Ministerial level will take place at the EcoFin Council and not at the General Affairs Council, as was the case during the Agenda 2000 negotiations, indicated Jan Peter Balkenende on July 1 after the traditional meeting between the incoming Presidency and the European Commission. Romano Prodi, meanwhile, confirmed that the Commission will adopt on July 14 a "package" of application measures, in particular the new rules on Structural Funds as well as proposals for a reform of the own resources system, including a generalised correcting mechanism for national budget contributions. "Our Presidency will provoke an open, balanced and honest debate", promised Mr Balkenende.

His Finance Minister Gerrit Zalm was much more aggressive, declaring that "the Commission should take into account other scenarios" than payment appropriations of 1.14% of GNP by 2013 - against the 1% defended by the Netherlands. He added that "the Presidency, if it is not heeded, could become a lone rider and defend clearer and stricter spending priorities". Mr Zalm, for instance, mentioned possible savings on farm spending, or at least taking into account the needs of Romania and Bulgaria in the framework of the budget initially planned only for the EU-25 during the October 2002 European Council. The Presidency is expected to make proposals at the informal EcoFin Council of September 10-11 in Scheveningen. "I would like to deepen the discussions in order to see what people's real priorities are, so as to enlighten future Presidencies", Mr Zalm said.

Mr Prodi stuck with the Commission line: "Sticking with the status quo is not an option in a changing world, the EU must have the means to fulfil its ambitions", he said. "I don't know if the leaving Commission can still flex its muscles", responded Gerrit Zalm. Mr Balkenende took advantage of his trip to Lisbon on June 30 to watch the Euro 2004 Portugal-Netherlands football match, and talked on this occasion with his counterpart Jose Manuel Durao Barroso, who has just been nominated Commission President for the term starting on November 1.

Turkey.

Turning to Turkey's long-standing bid...