EU finance ministers seek difficult deal on climate financing

Oct 20, 2009, 9:20 GMT

Luxembourg - An unlikely deal on how much European Union members should pay developing countries to help them deal with global warming change was on the table of EU finance ministers meeting in Luxembourg on Tuesday.

The European Commission says the world's richer nations should finance poorer nations to the tune of 100 billion euros (149 billion dollars) per year by 2020 to help them adapt to climate change.

And the EU's executive believes part of this sum - up to 15 billion euros - should come from European taxpayers.

But Poland and other Eastern European countries with dirty sources of energy such as coal are unhappy with the idea that this sum should be shared out between them on the basis of a combination of emission levels and wealth.

The latest compromise on the table of the finance ministers involves rewarding recalcitrant EU nations with a rebate on the money they pay into the bloc's budget, diplomats said.

Such a rebate would either be calculated on the basis of a member states' relative wealth, or on how much they pay into the EU's Development Fund.

'Obviously there are still difficult discussions that will take place, but I think that we are also seeing some of the contours and the infrastructure of an agreement,' said Swedish Finance Minister Anders Borg, whose country holds the EU's rotating presidency.

Despite Borg's optimism, sources familiar with the talks indicated that an agreement would most likely not be reached until next week's summit of EU leaders in Brussels.

Ministers were also set to discuss plans for a EU-wide financial supervisory body and on an anti-fraud deal with Liechtenstein which Austria and Luxembourg both oppose.