Schroeder suggests deficit rules omit EU transfers

Germany, the biggest contributor to the European Union budget, is questioning whether such transfers should be counted as part of national budget deficits, Chancellor Gerhard Schroeder said on Wednesday.
The idea was one of a several to reform the Stability and Growth Pact, he told reporters on the sidelines of an event for school newspapers.
"Others propose other things. We said for instance: Is it truly fair in the calculations of the deficit to include, to our disadvantage, what we pay net to Brussels?"
On Tuesday Schroeder, speaking at a joint news conference with French President Jacques Chirac, had already hinted at the idea.
Germany transferred an estimated 9.7 billion euros ($12.4 billion) to the EU budget in 2003, the finance ministry said, adding that according to the Commission the amount was only 7.6 billion euros.
Germany and France have also called for spending on research to be carved out of EU budget deficit calculations, saying the Commission's proposals to reform the pact were insufficient.
EU member states have committed themselves under the so called Lisbon Agenda to investing three percent of gross domestic product (GDP) in research and innovation but progress so far has been patchy.
The Commission said in a recent report that EU countries were making progress towards the goal, but had to do more. Germany, which spends the equivalent of 2.5 percent of GDP on research, ranks third in the EU.
Schroeder pledged at the start of the year to make education and innovation one of his key priorities.
The German and French appeals for a more flexible approach to calculating budget deficits come as the European Commission forecast Berlin would break the EU budget deficit cap in 2005 for a fourth year, while Paris was at risk of another breach.
EU finance ministers are due to debate the Commission proposals formally for the first time next month.
In May, there were first signs of Germany's idea to exclude research spending from the deficit calculations.
A senior official told Reuters then Germany was not making proposals yet but believed a number of ideas were worth considering before the Luxembourg EU presidency in the first half of 2005.
According to Schroeder the idea was floated by French Finance Minister Nicolas Sarkozy at the Tuesday summit.