* Commission had proposed 9.1 billion euros for energy
* Energy cuts part of package of cross-border spending
* Commission stands by original proposal
(Adds detail on related spending figures)
By Barbara Lewis
BRUSSELS, Oct 30 The EU's first energy budget
has been cut to a maximum of 7 billion euros ($9 billion) as
part of a compromise proposal on the bloc's long-term financing,
which governments will haggle over in the coming weeks.
Under its original budget proposal, the European Commission
set aside 9.1 billion euros for strategic cross-border energy
infrastructure. It was the first time the Commission had
ring-fenced money for the sector.
The compromise shows the details of at least 50 billion
euros in cuts to the proposed 1 trillion euro overall budget for
2014-2020 as Cyprus, holder of the rotating EU presidency, seeks
to mollify objections from the biggest national contributors.
The energy spending is part of a package of cross-border
funding, named "Connecting Europe", which also includes
transport and telecommunications infrastructure.
The Commission had proposed 40 billion euros in funding for
that cross-border infrastructure, plus an additional 10 billion
euros under EU regional development funds.
The Connecting Europe package has now been slashed to some
36 billion euros.
Details of the compromise, which have only just emerged,
immediately drew criticism from governments on both sides of the
spending debate as well as from non-governmental organisations.
The European Commission, meanwhile, defended its initial
"The Commission remains committed to its proposal, which
strikes the right, responsible balance in times of crisis, both
in the overall amount and in the balance between policies," it
said in a statement.
Under the proposal, energy was already a tiny fraction of
the overall budget and also much less than the amount needed to
upgrade Europe's energy infrastructure.
The Commission has estimated 100 billion euros is needed
just to improve energy transmission lines in order to achieve
efficiencies through a single, connected European energy market,
making use of an increasing share of renewable power.
The idea of providing some EU cash for "projects of common
interest", such as a southern gas corridor to diversify
supplies, is that it would trigger much greater private
investment. EU member states would have to agree on which
projects are of strategic importance.
"The European budget was always intended to ensure that the
public interest would be represented, in the context of a much
larger amount of money needed from the private sector," said
Jason Anderson, head of climate and energy policy at the WWF
European Policy Office.
"Cutting the EU budget could put important goals of
security, market integration and environment at risk."
($1 = 0.7749 euros)
(Additional reporting by Charlie Dunmore; editing by Rex
Merrifield and Jane Baird)