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EU grid interconnection program targeted

Nov. 14, 2012 at 12:15 AM   |   Comments

BRUSSELS, Nov. 14 (UPI) -- Likely budget cuts for plans to build east-west energy connections across Europe will hinder EU integration, the effort's backers said this week.

As the European Council struggled with member states' demands to slash its proposed 2014-20 budget by as much as $125 billion, supporters of the European Union's "Connecting Europe Facility" asserted the program was being targeted for a disproportionate hit.

European Commission Vice President for Transport Siim Kallas said Monday his country of Estonia and other EU countries dependent on Russian supplies of natural gas and electricity will view a major cut to the infrastructure financing program as a step backward in the European Union's efforts to build east-west cohesion.

"Citizens and local and regional authorities would not understand that European cross-border networks and cohesion policy, which largely financed those projects, will see its resources reduced under the pressure of future budget reductions," he said last month.

Under the latest budget proposal from the Cyprus presidency, the "Connecting Europe" financing facility -- originally proposed for $69 billion -- has been sliced to $46 billion, EurActiv.com reported.

The facility was to contain $12 billion be used to encourage energy grid projects the European Union deems necessary to contribute to the growth of a trans-European infrastructure.

Kallas repeated the warning over the weekend at the European Liberal party's congress in Dublin last weekend, the website said.

"It's a real fight about the future [of the] EU budget," he said. "This is not about money, this is about the fundamentals. Do we need European policies at all or should we cancel European policies?"

Kallas added, "We are much afraid that these cuts will hurt seriously our energy and transport network projects."

The fund is meant to leverage additional financing from the private and public sectors to help create links that would otherwise not be built and the commission says it would also help achieve the growth and jobs goals contained in its Europe 2020 strategy.

Planners have identified 11 energy corridors that would receive priority consideration for new project funding, including efforts to integrate "energy islands" within the European Union such as Estonia, Lithuania and Latvia.

Countries dependent on Russian gas imports, such as Slovakia, Bulgaria, Hungary and Romania are also to be given priority in the Connecting Europe facility.

The EU budget is to be subject of a Nov. 22-23 meeting and the run-up has been marked by demands to reduce the commission's original $1.03 trillion request at a time of deep austerity budgets in member nations.

The Cyprus presidency this week submitted a proposal that slashes the total request by $95 billion, perhaps en route to an eventual cut of $125 billion, Europolitics.com reported.

The commission touted the backing of business for the Connecting Europe Facility this week through a declaration of support signed by the likes of Ericsson, RATP, EirGrid, Telekomunikacja Polska, HSBC, Alstom, General Electric, IBM, Airbus ProSky and GDF-Suez.

Meanwhile, Ramon Luis Valcarcel, president of the European Parliament local advisory group the Committee of the Regions, backed Kallas' call for sparing trans-European grid connection efforts from the budget ax at time when the European Union needs to concentrate on creating a single energy market for its long-term financial health.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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