EU's €9bn broadband fund wiped out

After a tense few days of wrangling over budget cuts by Europe’s political leaders, it was scarcely good news for the €9.2bn pot of funding for broadband networks championed by Neelie Kroes, European Commissioner for Digital Agenda.

The 27 member states of the European Union agreed to reduce the EU’s budget by three per cent to €908bn for the next seven-year period, due mainly to pressure from UK Prime Minister David Cameron.

This means that the Connecting Europe Facility (which aims to fund the rollout of super-fast broadband to rural areas across the continent) is being whittled down to just €1bn.

In response, Kroes warned that the EU’s existing broadband targets of 30Mbps and above broadband for all citizens by 2020 will now be “harder to reach”, and indicated that the €1bn which has been secured will be used exclusively for digital services such as eProcurement and eInvoicing.

“It is clear that there can be no support for broadband with a pot of only €1bn, so this funding will be exclusively for digital services,” said Kroes. “Our 2020 fast broadband targets, agreed by everybody, may be harder to reach but I am not giving up on them. I will keep fighting, and I will support innovations that help roll-out fast broadband to underserved areas.

“Member States now have a special responsibility. In saying that better broadband is the task of the market, they must help build a better and EU-wide telecoms market. In other words, today’s deal has consequences. The current market structure will not do the job Member States are now asking of it.”

The Commissioner added that she will work closely with the European Investment Bank to ensure the latter’s active involvement in lending for broadband projects: “With the recent capital increase of the Bank of €10bn, fresh funding is available for broadband and we must make the most of it.”

This news follows closely on the heels of a warning issued last week by telco lobbying group ETNO, predicting that cuts to the Connecting Europe Facility would harm Europe’s economic competitiveness, as these networks “constitute a critical infrastructure”, according to Luigi Gambardella, ETNO’s executive board chair.

Other areas of EU spending which have been hit by the budget cuts include a five per cent reduction in EU staff and two-year salary freeze, a substantial cut in farm subsidies and spending, and a €50bn plundering of funding destined for technology and infrastructure improvements.