Finland's main goal for the next budgetary period of the European Union is to keep Eastern and Northern Finland within the highest classification of regional and structural funding in the upcoming financial period.

   

The EU has just begun budget discussions for the 2007 - 2013 period.

Member states are wrangling over issues such as how high a proportion of the member states' GDPs should be used for covering the EU budget. At the moment 15 member states are paying slightly more than one percent of GDP into the EU coffers.

   

The six largest net contributors to the EU said shortly before Christmas that they want to limit their contributions to the EU to just one percent of GDP.

   

The European Commission feels that at the end of the next budgetary period the share should be 1.24% of GDP, which is the maximum set for the EU budget.

   

The EU Ministerial Committee of the Finnish government took the middle ground on Wednesday. In its statement, the committee said that the EU's budgetary framework should be set at about 1.1%.

Another key issue is how the budget funds are to be allocated to different sectors.

   

Currently about three quarters of the EU budget goes into agricultural subsidies and regional development.

   

The aim of the EU's Common Agricultural Policy is to secure farming in all member countries. Regional and structural policy is aimed at reducing regional differences and easing the problems caused by the opening of markets and changes in the business structure.

   

Prime Minister Matti Vanhanen (Centre) said on Wednesday that keeping Eastern Finland among the areas getting structural funds under Objective 1, and to prevent it falling under the Objective 2 programme is a "threshold issue".

Areas getting support under Objective 1 are those where the area's GDP was less than 75% of the EU average at the time of the previous EU talks.

   

When the EU takes on new members this year, Finland's regions getting financial assistance under Objective 1 will rise above the 75% level. Finland hopes that the difficult conditions imposed by nature and the remote position of the areas would be taken into account when allocating the subsidies.

   

At present most of the money that comes back to Finland from the EU is in the form of agricultural subsidies and rural development funds. Smaller amounts come from funds for regional development, employment, as well as research and product development.

   

Agricultural subsidies have largely been set already. There could be problems in discussions on rural development funds, from which Finland has benefited considerably.