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BackOn the occasion of a high-ranking Commission conference on the Multiannual Financial Framework 2014-2020, Commission President José Manuel Barroso, EU Parliament President Jerzy Buzek and the Polish Prime Minister Donald Tusk commented on the future of the EU budget and the new economic crisis. Commission President Barroso did not hesitate to use dramatic words: the EU was in a systemic crisis, the meeting of the G20 and the EU summit on the rescue package would bring important decisions. The banks had to be strengthened (once again). The EU budget could help to overcome the crisis, said Barroso.
Commission President Barroso wants frugal use of funds with optimal output
The Commission President emphasised that the crisis could only be solved on the basis of economic and employment growth. This had to be at the centre of all considerations. However, the fiscal pressure in the Member States was huge and one had to use any resources frugally to achieve optimal output. The gap with regard to competitiveness had increased, said Barroso addressing once again one of the Commission’s favourite subjects. The financial sector had been supported by the tax payer; it was now the time to give something in return. That is why the Commission would propose a Financial Transaction Tax. It was important to confront and oppose populism and nationalism in times of crisis. The population had to be informed that EU funds would not be channelled to Brussels but used for employment, research and education, said Barroso in his concluding words.
Parliament President Buzek demands more optimism for the future of the European Union
In his opening comments, the President of the European Parliament Jerzy Buzek underlined that the competences of the European Parliament on the EU Financial Framework had been extended by the Treaty of Lisbon. The European Parliament had for the first time and within the scope of an initiative report published its ideas on the next Financial Framework before the Commission proposal. Just as Barroso had done, Buzek too stated that securing competitiveness would lead to rapid growth. Buzek is convinced that investments in research, agriculture and rural development would create jobs. One had to look optimistically into the future. The crisis would not last forever and one should not develop a pessimistic tunnel vision, underlined the European Parliament President at the end of his speech.
Polish head of state Tusk regards EU Fund as the best remedy against the crisis
The Polish head of state Tusk criticised voices that demanded a smaller EU budget. A tighter budget would significantly weaken the positive effects at EU level. One could not start by determining the expenditure ceiling first and then talk how to use the funds. In particular the EU Funds were the best protection against the crisis. Tusk regards cohesion and structural policy, agriculture and neighbourhood policy as being the most important aspects. As did the two previous speakers, he emphasised that competitiveness and solidarity would be the most significant factors to achieve success.
Commissioner Lewandowski wants to achieve more for the EU either with the same or fewer resources
EU Budget Commissioner Janusz Lewandowski commented that because of the great uncertainty regarding the financial crisis the discussion on the EU budget had taken a backseat. Confronted with this situation one had to try to achieve more for the European Union, be it with the same or maybe even fewer resources. Agriculture and cohesion policy would continue to be the major cost factor. Some spending had been frozen; however, other expenditure had been significantly increased. Lewandowski cited the increase of the infrastructure expenditure by more than six fold; with regard to education one had planned a 68 % increase; a plus of ca. 20 % had been budgeted for external relations. Instead of granting rebates on membership contributions, some countries would have to pay a flat rate (however, Austria is not among them). Lewandowski finally emphasised that one should promote a culture of solidarity.
MEP Haug demands the abolition all EU rebates
The Chair of the Special Committee on the EU Financial Framework from 2014 in the European Parliament, Jutta Haug, emphasized that for the first time the European Parliament had put its proposals on the table before the European Commission. This contained a commitment to Europe 2020 (its aims include the fight against poverty and an increase of employment, education and research measures). The idea is to promote intelligent, sustainable growth based on financial incentives in combination with national budgets. In Haug’s opinion it was time to abolish all rebates to Member States. The completely outdated net payer and receiver discussion had to be a thing of the past; the time had come to introduce a new own resources system.
A hard struggle for the EU budget is to be expected
In order to put the new Financial Framework from 2014 into effect as planned, the EU budget negotiations have to be finalized by the end of next year. Fierce discussions have to be expected for several reasons: the net payer countries have already written a letter to the Commission in which they state that the volume of the EU budget had to be smaller than proposed by the Commission. However, at the same time the new Member States request that any imbalances with regard to per capita funding in the various policy sectors, such as agriculture and cohesion policy, would become a thing of the past. Although there are many states in favour of a Financial Transaction Tax, however, countries such as Great Britain and Sweden are declared opponents of this proposal. However, one thing is clear: in contrast to the concept of competitiveness, which has been repeated like a prayer wheel for a decade and which never recorded any success, but in fact threw the door wide open to wage and social dumping, a Financial Transaction Tax would be a clear signal for more (distribution) fairness and a more sensible measure by far to create a fair and future-oriented EU budget.
The Commission President emphasised that the crisis could only be solved on the basis of economic and employment growth. This had to be at the centre of all considerations. However, the fiscal pressure in the Member States was huge and one had to use any resources frugally to achieve optimal output. The gap with regard to competitiveness had increased, said Barroso addressing once again one of the Commission’s favourite subjects. The financial sector had been supported by the tax payer; it was now the time to give something in return. That is why the Commission would propose a Financial Transaction Tax. It was important to confront and oppose populism and nationalism in times of crisis. The population had to be informed that EU funds would not be channelled to Brussels but used for employment, research and education, said Barroso in his concluding words.
Parliament President Buzek demands more optimism for the future of the European Union
In his opening comments, the President of the European Parliament Jerzy Buzek underlined that the competences of the European Parliament on the EU Financial Framework had been extended by the Treaty of Lisbon. The European Parliament had for the first time and within the scope of an initiative report published its ideas on the next Financial Framework before the Commission proposal. Just as Barroso had done, Buzek too stated that securing competitiveness would lead to rapid growth. Buzek is convinced that investments in research, agriculture and rural development would create jobs. One had to look optimistically into the future. The crisis would not last forever and one should not develop a pessimistic tunnel vision, underlined the European Parliament President at the end of his speech.
Polish head of state Tusk regards EU Fund as the best remedy against the crisis
The Polish head of state Tusk criticised voices that demanded a smaller EU budget. A tighter budget would significantly weaken the positive effects at EU level. One could not start by determining the expenditure ceiling first and then talk how to use the funds. In particular the EU Funds were the best protection against the crisis. Tusk regards cohesion and structural policy, agriculture and neighbourhood policy as being the most important aspects. As did the two previous speakers, he emphasised that competitiveness and solidarity would be the most significant factors to achieve success.
Commissioner Lewandowski wants to achieve more for the EU either with the same or fewer resources
EU Budget Commissioner Janusz Lewandowski commented that because of the great uncertainty regarding the financial crisis the discussion on the EU budget had taken a backseat. Confronted with this situation one had to try to achieve more for the European Union, be it with the same or maybe even fewer resources. Agriculture and cohesion policy would continue to be the major cost factor. Some spending had been frozen; however, other expenditure had been significantly increased. Lewandowski cited the increase of the infrastructure expenditure by more than six fold; with regard to education one had planned a 68 % increase; a plus of ca. 20 % had been budgeted for external relations. Instead of granting rebates on membership contributions, some countries would have to pay a flat rate (however, Austria is not among them). Lewandowski finally emphasised that one should promote a culture of solidarity.
MEP Haug demands the abolition all EU rebates
The Chair of the Special Committee on the EU Financial Framework from 2014 in the European Parliament, Jutta Haug, emphasized that for the first time the European Parliament had put its proposals on the table before the European Commission. This contained a commitment to Europe 2020 (its aims include the fight against poverty and an increase of employment, education and research measures). The idea is to promote intelligent, sustainable growth based on financial incentives in combination with national budgets. In Haug’s opinion it was time to abolish all rebates to Member States. The completely outdated net payer and receiver discussion had to be a thing of the past; the time had come to introduce a new own resources system.
A hard struggle for the EU budget is to be expected
In order to put the new Financial Framework from 2014 into effect as planned, the EU budget negotiations have to be finalized by the end of next year. Fierce discussions have to be expected for several reasons: the net payer countries have already written a letter to the Commission in which they state that the volume of the EU budget had to be smaller than proposed by the Commission. However, at the same time the new Member States request that any imbalances with regard to per capita funding in the various policy sectors, such as agriculture and cohesion policy, would become a thing of the past. Although there are many states in favour of a Financial Transaction Tax, however, countries such as Great Britain and Sweden are declared opponents of this proposal. However, one thing is clear: in contrast to the concept of competitiveness, which has been repeated like a prayer wheel for a decade and which never recorded any success, but in fact threw the door wide open to wage and social dumping, a Financial Transaction Tax would be a clear signal for more (distribution) fairness and a more sensible measure by far to create a fair and future-oriented EU budget.