EU BUDGET: BARROSO REJIGS MEDIUM-TERM FINANCIAL FRAMEWORK TO RESTART DEBATE.

Presenting his proposals to the European Parliament on October 20, Mr Barroso said that the challenge following the failed negotiations on the financial perspective in June was to reconcile the different views of those member states who wanted spending to be omodernisedo and those who wanted spending on traditional policies to be maintained.

He said he agreed with Tony Blair that the summit should not become a negotiating session but he hoped that his proposals on the financial perspective and a paper on the economic and social challenges of globalisation, would stimulate debate so that the summit would produce a ocommon sense of purposeo.

Something for everyone.

Mr Barroso's plan cleverly addresses the demands of the UK for the percentage of the EU budget spent on traditional policies to shrink over the length of the 2007-13 period and the share on policies which boost competitiveness to rise. At the same time, he has offered France an instrument to deal with the effects of globalisation in the form of an adjustment fund to deal with social effects of factory closures while making offering sweeteners to the Parliament on the funding of nature conservation sites and giving them more power over external relations spending.

Structural funding.

The Commission is suggesting that cohesion funds, which finance regional development and social programmes, should contribute to the Lisbon Strategy of boosting growth and employment. Member states should set a target of 60% of cohesion fund spending to be spent on projects such as research and development, innovation, infrastructure networks and improving energy efficiency. There would be a similar instrument for rural development, he said. At the moment, member states spend around 50% of their structural fund receipts on projects which can be classified as contributing to improving competitiveness. The aim would be that by the end of the budgeting period around a third of the EU's entire budget would be spent on policies promoting growth, innovation and job creation.

Globalisation fund.

Mr Barroso also outlined his plan for a Globalisation Adjustment Fund which would act as a kind of oshock absorbero to deal with the consequences of globalisation. The money would not be spent on bailing out uncompetitive companies but would help people affected by factory closures through measures such as retraining or assistance in finding new jobs. Mr Barroso said that the money would be outside the main budget but...