BRUSSELS, Sep 19 (Reuters) The European Commission today proposed to divert EU cash to a new research body in a bid to break a deadlock over funding the bloc's attempt to boost innovation and competitiveness.
The European Union's executive body proposed 432 million dollars be earmarked in the current EU budget to fund the first phase of a new European Institute of Technology.
The Commission wants the cash to come from farm funds budgeted for this year and 2008 that are likely to be unused, and from the EU's scientific research budget. The overall EU budget will remain unchanged.
Member states and the European Parliament are close to adopting the plan for an EIT, but may find it harder to approve the Commission's proposed way of finding the start-up cash.
Some lawmakers want member states to provide the new money needed so that other projects do not suffer.
''We think the EIT should not be financed out of current research spending but should be new money. It should not cannibalise any other part of the budget,'' said a spokesman for parliament's biggest bloc, the centre-right European People's Party.
The EIT was the brainchild of Commission President Jose Manuel Barroso, who hoped for a 2.3 billion euro campus-based institute to rival the renowned Massachusetts Institute of Technology.
Faced with scepticism from Britain and other states, the EIT is set for a more modest start as a link to a network of existing universities and private research bodies that would offer an ''EIT label'' on degrees.
Parliament is due to take a first-reading vote on the project next Wednesday, and research ministers will discuss the matter two days later.
Reino Paasilinna, the Finnish socialist steering the initiative through parliament, said lawmakers were expected to agree next week to create an EIT but to leave out details about funding until the second reading.
The EU aims to launch the new body next year and the initial budget would cover its first six years, including two or three pilot programmes looking at areas such as climate change.
REUTERS GL BD2212