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February 15th, 2013

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The ink may have only just dried on the EU’s next seven-year budget, but speculation has started over whether the deal will lead to projects in Denmark facing the axe.

One likely candidate to suffer is the plan to improve broadband infrastructure in rural Denmark after the budget allocation was gutted from around 70 billion kroner over the seven-year budget period to 7.5 billion kroner.

As a result, telecommunications companies will be stuck with a far greater portion of the bill to connect rural areas with faster internet speeds according to Jacob Willer, the managing director of the trade organisation Teleindustrien.

“We cannot take the responsibility alone,” Willer told the local government association, Kommunernes Landsforening, referring to the enormous task of improving internet speeds. “We are willing to take on some responsibility but it’s something that needs to be done together with politicians.”

The broadband investment was cut from the budget’s Connecting Europe Facility (CEF) which will fund investments in transport, energy and communications.

Cuts to the CEF may also affect the future of the 18-kilometre Fehmarn Tunnel to Germany after transport allocations were cut from 240 billion to 160 billion kroner.

Femern A/S, the company responsible for building the tunnel, has planned to finance ten percent of the construction costs – which will total at least 35 billion kroner – through EU funding. While a spokesperson from Femern A/S stated that they were still applying for the funding, he would not comment on how the new budget may affect it.

But given that the Fehmarn Tunnel is on a priority list for trans-European infrastructure projects, the so-called TEN-T, Danish politicians have expressed cautious optimism that the tunnel project will move ahead.

“Denmark has traditionally been quite good at getting ahold of tax money and I think the Fehmarn is a good project,” the EU spokesperson for Socialdemokraterne (S), Jens Joel, told Jyllands-Posten newspaper. “We don’t see the need for alarm.”

Their priority status means that TEN-T projects can also secure funding from additional sources, including the European Investment Bank and public-private partnerships.

“I don’t think the EU’s new budget will mean that we will receive less funding for Fehmarn,” Rasmus Prehn, S's traffic spokesperson, told Jyllands-Posten. “If there are fewer resources from the EU for infrastructure then there is a risk. It might prove an obstacle but it won’t prevent the connection from being built.”

Reacting to the EU budget cuts, industry lobby group Dansk Industri (DI) stated in a press release that it was dissatisfied that more money was not being set aside for research, innovation and infrastructure.

“If Denmark wants to join the rest of the world’s winning regions, we need to make more of an effort,” Karsten Dybvad, DI’s managing director, stated. “DI would have much rather seen leaders prioritise money for research and innovation, and particularly for new transport, energy and communication technology infrastructure. It would improve growth in Europe.”