Europe gears up for bargaining on taxes, subsidies. EC members aim to bring budget under control

The European Community, now well into its 1987 fall term, is slowly gearing up for nothing less than a financial revolution. This revolution to establish real control for the first time over the EC budget would include agreement by the EC's 12 heads of government to:

Establish control over the ``common agricultural policy.''

Raise new taxes to help job creation in the Community's poorer regions such as Portugal, Ireland, Greece, the south of Spain, the south of Italy, and the north of Britain.

Leaders hope to reach agreement at their next summit in Copenhagen in the first week of December.

Experts, however, agree it will be a tough timetable to keep. On the positive side, the 12 members agree a package deal containing these elements will have to be struck at some time.

This agreement, however, cloaks the fact that different elements of the package are important to different countries. What may be a prize to one government may to another country be no more than a price to be paid in order to gain an item somewhere else in the package.

The southern member countries, for instance, want a bigger EC budget with more money for Mediterranean agriculture and for developing alternative occupations in the countryside.

They generally favor cutbacks in the high subsidies that the EC has traditionally given to dairy producers in northern european countries. They are not so enthusiastic about tight financial controls across the board.

The northern countries are united against the possibility of a spending spree in support of Mediterranean farming.

The introduction of subsidies for southern crops - to be consistent with policies in the north - could create additional surpluses. Northern farmers under EC subsidy programs have stockpiled mountains of butter, beef, and cereal grains.

In fact, all 12 European Community governments agree that surpluses in the north have to be greatly reduced. This would be done in the interest of saving money and of reducing the likelihood of trade wars with the US and other producers.

Three governments - Germany, Britain, and France - are net contributors, meaning they pay more to the central budget than their citizens claim back from it.

These three countries are pushing for better controls over budgetary expenditure. In return for controls, they would reluctantly (very reluctantly, in the case of Britain) agree to an increase in the present EC tax ceiling.

Given all these conflicting interests, it's clear that much hard bargaining lies ahead. Moreover, it will have to begin soon, and in earnest, if the deadline for agreement in Copenhagen is to be met.

Many other negotiations of various kinds are now just coming into focus among the member nations.

For instance, there are proposals for a permanent system for giving away surplus food to European charities, and for the partial deregulation of civil air routes.

Also under consideration are a new batch of technical standards to get rid of nontariff barriers to trade and bring the EC closer to being what it is already supposed to be - a real common market.

There is, too, for the first time at this late stage, no agreement on a draft budget to propose to the European Parliament for next year.

Judging by past practices, most or all of these issues will have to wait until December for a decision.

If the big reform package is not wrapped up then, it - and related issues - may have to wait until March, or even June, of next year, when the next European Community summit is scheduled to convene.

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