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Valentine’s Day or maybe rather a political Ash Wednesday? On 14 February 2018, EU Commissioner Günter Oettinger, responsible for Budget und Human Resources, presented the priorities of the Commission for the Multiannual Financial Framework (MFF) in Brussels. This shall serve the informal meeting of heads of state and government on 23 February to agree the future of the EU and its finances.

 

The Communication has been given the promising title “A new modern Multiannual Financial Framework for a European Union that delivers efficiently on its priorities after 2020”. It is the objective of the Communication to outline a “positive agenda for the Europe of the 27” and its financing for the next 7 Years from 2021. What did Commissioner Oettinger especially refer to in his speech?

 

Why now?

Above all is the explicit target - in contrast to last time - to start the process as early as possible to be finished well in time. The last MFF did not leave enough time to derive concrete programmes from the framework; Oettinger referred to this as a “lost programme year 2014”. This time, everything shall be different: This would provide clarity and security - for researchers, keyword “European Supercomputer”, for students, Erasmus++, but also for citizens, for example with regard to the Common European Security and Defence Policy.

 

Added value Europe vs meaningless debates guided by envy

In contrast to the national budgets, here the focus is on implementing programmes in the course of pursuing EU policy areas. In doing so, most funds are spent on EU agricultural subsidies, followed by projects from the structural and cohesion policy sector and for research. The EU Budget must be balanced at all times; hence it is not allowed to incur debts and is first and foremost an investment budget. Thus, the seven years MFF provides a long-term planning horizon. Funds shall only be provided where the supranational level ensures added value, hence where the European level invests more efficiently and more cost effective than the Member States. Popular examples for this are cross-border infrastructure projects, such as the “Connecting Europe Facility”, but also major research programmes such as “Galileo”. One could read this European added value like a “menu” said Oettinger, like a catalogue of possible services. The heads of state and government now had to decide whether they wanted to call on this added value; however, in this case it had to be financed by the Member States.

 

Consequently, the budget framework would have to be fundamentally modernised. In this new environment, a net contributor debate would be rather “meaningless”, explained the Commissioner. This would have been somehow comprehensible with regard to cohesion and agriculture; however, not when it comes to research, border protection or for example foreign aid. Many programmes would no longer be part of the next MFF; even though the decision as to which ones this would affect is not the European Commission's alone it would make a proposal.

 

Post Brexit Budget

The fact that BREXIT would create a significant income gap of about 12- 14 Billion Euro and that new extended responsibilities, namely border protection and significantly higher spending regarding so-called “foreign aid” in Turkey, demand for more money cannot not be denied. These gaps had to be filled, but how? One thing is clear: 1% of gross national income (GNI) resources will not be sufficient; according to Oettinger one would need a moderate increase towards 1,1x%.

 

Cuts to cohesion and structural policies seem to be inevitable. However, the old, well-known problems also have to be tackled: long and sluggish procedures for programmes and projects, different rules and a lack of efficiency. It would be proof of the EU’s shortcomings if Member States out of sheer frustration about the “excessive bureaucracy” no longer wanted to use EU funds.

 

This is aggravated by the fact that the MFF requires unanimity. It is questionable whether it will be achieved regarding the sensitive question concerning higher contributions or more own resources.

 

Less money for defaulting Member States?

The Communication also briefly addresses the so-called “Principle of the Rule of Law“. Among other, one considers the option of linking the adherence of the EU’s fundamental values to the condition for cash flows to Member States. Such a mechanism would have to be transparent and proportionate and should not affect individuals, such as Erasmus students or civil society organisations. In Oettinger’s opinion this would be an “open result procedure”; however, a Polish reporter immediately pointed out the absolute opposition of East European Member States regarding this proposal. Basically, such measures have to be welcomed if they concern the adherence to EU’s fundamental values. The situation would be different if one would aim at enforcing the extortion of country-specific recommendations within the scope of the European Semester. Such plans would have to be clearly rejected.

 

AK: Priority for social investments

A supportive society as well as territorial cohesion are the corner stones of the European idea. Their basis is the European welfare state, which stands for secure and sustainable employment for Europe’s entire workforce, as well as for their social security and for combatting poverty. Hence, the funds available to the EU should in particular be used for the entire cohesion policy with focus on such policy areas, which pursue the goal to reduce social and economic differences. Instead, the Commission raises the question whether better developed countries and regions should still be given structural fund resources at all. However, new challenges, in particular the integration of refugees or combatting youth unemployment, also affect well developed Member States. As a result, these funds should be available to all Member States.

 

The concrete proposal as to how the MFF should be furnished has been scheduled for 02.05. Prior to this, a number of pubic consultations have taken place. The Communication of the Commission states that it would be politically desirable, but also a “practical imperative” to accept the budget until May 2019.

 

Read on:

https://www.awblog.at/eu-budget-nach-2020-erste-pfloecke-zur-Europeeischen-kohaesions-und-strukturpolitik-werden-eingeschlagen/?highlight=beer

https://ec.europa.eu/commission/sites/beta-political/files/where-does-the-money-go_en.pdf

https://ec.europa.eu/commission/sites/beta-political/files/modernising-revenue-sources-eu-budget_en.pdf

https://ec.Europe.eu/commission/sites/beta-political/files/why-do-delays-matter_de.pdf

https://ec.Europe.eu/commission/sites/beta-political/files/what-kind-of-europe-for-our-future_de.pdf