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EU Budget Cuts Would Damage Fragile Economy, Lewandowski Says

Jan. 25 (Bloomberg) -- European Union Budget Commissioner Janusz Lewandowski pleaded with national leaders not to make further reductions in the bloc’s next seven-year budget.

A proposal for 1.033 trillion euros ($1.4 trillion) in spending between 2014 and 2020 was cut to 973 billion euros in November and further cuts are likely when EU leaders meet Feb. 7-8 to hammer out a final package, he said.

“It’s not good for Europe because we badly need investment,” Lewandowski said at the European Policy Centre in Brussels today. “We could destroy the capacity of the European budget.”

Wealthier countries such as Germany, the U.K., Denmark, Sweden and the Netherlands have already seen to it that the new budget -- devoted mainly to infrastructure projects and farm aid -- will decrease for the first time in EU history.

The donor countries are now skirmishing over who pays how much, with Denmark insisting that it is entitled to the same rebate as the U.K., Germany, the Netherlands and Sweden.

Lewandowski’s earlier proposals to replace the patchwork of refunds with a more streamlined revenue-raising system were rejected by the rich countries.

“The present system of rebates, built on the British rebate, is complicated enough,” Lewandowski said. He deemed Denmark “not a candidate for corrections,” while conceding that the question will be decided “politically” by national leaders.

To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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