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Last Updated: Tuesday, 16 December, 2003, 15:06 GMT
EU's richest six urge budget cap
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The letter is said to have been drafted before the Brussels fiasco
Six of the EU's richest states have called for the capping of the bloc's future budget, which could lead to a cut in aid to its poorer nations.

Germany, Austria, Britain, France, the Netherlands and Sweden said the budget should not exceed 1% of the EU's gross national product from 2007 onwards.

Their letter came just days after Spain and Poland blocked a deal on the EU's future constitution at Brussels talks.

The European Commission has reacted angrily to the "letter of the six".

The letter also sparked an immediate response from Poland, where Foreign Minister Wlodzimierz Cimoszewicz said the expanding bloc "cannot function on the principle of carrots and sticks".

Threat

In a reference to Germany's economic downturn, the letter says EU citizens would not understand if the EU budget were exempted from the painful consolidation efforts carried out at home.

Miracles... are not my speciality
European Commission President Romano Prodi
The letter's proposal would slice 25 billion euros ($31bn) from the budget which the European Commission is expected to propose.

In a swift reply, European Commission President Romano Prodi said that with less money it would simply not be possible to do what EU governments and the rest of the world expected in terms of foreign aid and improved border and immigration controls.

"Miracles... are not my speciality," Mr Prodi said in a statement, adding that they did not seem to come easily to EU member states either.

The letter from the six countries that hold the EU purse-strings will inevitably be seen by Spain and Poland as a threat, the BBC's Oana Lungescu in Brussels says.

They stubbornly stood up to the EU's heavyweights over the constitution - and now they stand to pay the price, our correspondent says.

Discipline

A UK Government spokesman told BBC News Online the letter was not related to the collapse of the talks.

"Spending restraint is not about punishing anyone," he said.

"This is across the board on the EU budget. It says countries like Poland, like Britain or Spain are not going to hand over excessive contributions to Brussels.

"It is about a prudent approach to public finances."

EU budget spokeswoman Elisabeth Werner told BBC News Online it was impossible to say where financial cuts would have to be made if it followed the letter's recommendations.

Parallel talks

Sticking to below 1%, she said, would mean new decisions would have to be made, or a general budget cut imposed across the board.

Diplomats also say the letter was drafted before last weekend's EU summit broke up in acrimony over voting rights for Poland and Spain.

German Chancellor Gerhard Schroeder had warned that the constitutional talks would now run in parallel with those on the EU's next budget, bringing what he called additional complications.

The current ceiling on EU budget stands at 1.24% of the EU's gross national product.

EU BUDGET
EU members contribute to the organisation's budget
They also receive funding such as regional aid and farm subsidies
Some EU members, such as Germany, give more than they receive
Some members, such as Spain, receive more than they contribute




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