CEOL - EU Fails To Settle Differences Over Kosovo Funding

BRUSSELS, Nov 27, 1999 -- (Reuters) Talks lasting into the early hours of Friday failed to resolve a European Union dispute over 500 million euros ($505.2 million) of funding for Kosovo, Budget Commissioner Michaele Schreyer said in a statement.

She appealed to EU governments and the European Parliament to reach an agreement as soon as possible in the row which could delay approval of the EU's entire 92 billion euro budget.

"The political message of a non-resolution of the Kosovo funding would not be understood, either by the people of Kosovo or by the citizens of the European Union," Schreyer said.

The European Commission, the EU's executive, has been trying to help find a solution since the Parliament passed the draft budget for 2000 last month, but left question marks over where the money for the reconstruction of Kosovo should come from.

The EU governments wanted the money raised by making spending cuts in other areas of the budget, but the Parliament said additional funds should be made available to fund efforts to rebuild the ethnically-divided Yugoslav province.

Schreyer said the governments and the Parliament would set aside 360 million euros ($363.7 million) in next year's budget to spend on the reconstruction of Kosovo, and a further 140 million euros would be included in the 2001 spending plan.

They also agreed the money should be raised partly by redirecting funds that had initially been set aside for other purposes and partly by raising new funds, but failed to agree on how the money would be divided under this plan, she said.

"It is a rather difficult situation," a Commission spokesman said.

But he held out hope that an agreement could be reached, saying: "It's not excessively dramatic at the moment...there's nothing to indicate that we stand on the eve of a major budgetary crisis."

The EU has vowed to play a major role in the reconstruction of Kosovo after NATO's 78-day bombing campaign against Yugoslavia earlier this year.

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