Broadband networks plan in tatters due to EU budget – SMEs disappointed

Last week the European Council has reached political agreement on the expenditure for EU 28 for the period 2014-2020. Thus, the maximum total figure is €959,988 million in appropriations for commitments and € 908,400 million in appropriations for payments. This means a cut by €34 billion compared to what had been originally proposed. To the implementation of the Connecting Europe Facility (CEF) 29,3 billion was allocated, which includes €10 billion that would be transferred from the Cohesion Fund. The amount previously earmarked for CEF was €50 billion. The agreed €29,3 billion would be distributed among the fields of transport, energy and telecommunications so that telecommunications would receive €1 billion, instead of the planned €9.2 billion.

The European Union's Digital Agenda Commissioner Neelie Kroes expressed her disappointment about the decision on 9 February in a blog post.

She noted that the agreed sum “still leaves room to invest in service infrastructure, in fields like eProcurement and eInvoicing, that can support a digital single market and ensure top-quality, 21st century public services for Europeans”.

“But this funding will have to be exclusively for digital services: because such a smaller sum does not leave room for investing in broadband networks. I regret that: because broadband is essential for a digital single market, the rails on which all tomorrow’s digital services will run; and this could have been an innovative and highly-market oriented way to deliver it, almost budget-neutral in the long run.”

Kroes warned that the cut would also make it more difficult to reach the broadband targets for Europe such as ensuring fast broadband for all citizens by 2020. Still, she added it was important to stay focused on that goal and that she would continue with the cooperation with the European Investment Bank so that they would be actively involved in lending for broadband projects: “the recent capital increase of the Bank of €10 billion brings the promise of fresh broadband funding, and we should make the most of that”.

“The EU decision is a missed opportunity for Europe. Broadband is an indispensable infrastructure, which the ICT sector needs in order to deliver growth and jobs.” – Mr Charles Huthwaite, President of PIN-SME.