Brussels, 22/03/2012 (Agence Europe) - During a major conference on Thursday 22 March on the next multiannual financial framework, representatives from the European Parliament and the European Commission sounded a note of warning against the adverse effects of a budget cut as proposed for the 2014-2020 period. The financial transaction tax (FTT) would allow the contributions of EU states to EU coffers to be reduced by 50%, Commission representatives said.
Martin Schulz, European Parliament President, said “we shall not accept a fall in the European budget”. “Europe needs a sound budget for raising future challenges”, he added, going on to warn: “Freezing the budget, or even reducing it, will not allow anyone to overcome the crisis.” The EP has its word to say in talks on the multiannual financial framework, on the different spending headings and on annual ceilings, the EP president said, saying “we shall play our role to the full”, thanks to co-decision, adding: “Any attempt aimed at allowing EU finance ministers to decide on such matters without the European Parliament will be opposed by the EP.” Contrary to what some countries want (Germany, United Kingdom, France, among others), the EP does not want a top-down approach (i.e. first looking at financing available and only then deciding on policies), but a bottom-up approach. He explained that net contributor countries, beginning with Germany, hope to reduce the total budget proposed by the Commission for the 2014-2020 period by €100 billion. Regional investment, such as the Erasmus programme, will be most affected by this amputation of €100 billion, Schulz warned. The EP is keen to set up a true own resources system for the EU as foreseen in the treaties (Article 311), he said. Increasingly, in fact, the EU budget is financed by national contributions, and Schulz takes the view that real own resources would make it possible to put an end to the current polemic surrounding the EU budget. The EP therefore supports the proposals on the table (FTT, VAT). He considers as unacceptable the position taken by a number of states (including the United Kingdom) which refuse point blank to discuss the creation of new own resources.
Speaking on behalf of the Danish Presidency, Helle Thorning-Schmidt, Denmark's Prime Minister, set the scene of doom and gloom. She spoke of the measures taken at the EU and national levels to address the sovereign debt crisis. Despite progress, member state public finance is still under pressure and budgetary consolidation will remain a major challenge for years to come. Thorning-Schmidt went on to say: “We are in a period of low growth and unemployment which severely affects the young, and we are suffering from increased competition from the emerging countries”. That is why it is necessary to promote growth and jobs in Europe. There is no miracle cure, however, she conceded, although she is nonetheless convinced that the next multiannual financial framework will “allow us to reform the budget while taking future needs more into account, and this is what will make all the difference in terms of jobs and growth in Europe”. Negotiations will be difficult, as astronomical amounts are at stake, she stressed, going on to specify that there will be no final agreement under the Danish Presidency on the 2014-2020 financial framework, but rather at the end of the Cypriot Presidency (December 2012). Denmark will do all it can to take talks forward and “close the gap between the different positions”.
Thorning-Schmidt gave her appreciation of the guidelines that should steer the future budget. She said they should: - support (more than today) the agenda for growth and employment, which requires “political courage” to redeploy funding on policies likely to improve the EU's competitiveness (she insisted on strengthening the EU's efforts when it comes to research and innovation); - place emphasis on the greening of policies; - place solidarity at the heart of the European budget (focusing resources on the least prosperous regions and countries of the EU); - see how, at a time of restraint, the EU budget can provide true added value for every euro spent (requiring results, performance and assessment), which means downward review of funding for certain programmes that have not had the hoped-for results; - and improve efforts for sounder financial management and simplification of rules.
The future budget must have “equitable and transparent” financing, Denmark's prime minister said, suggesting that one should move away from the old “fair return” argument.
FTT would entail 50% reduction in national contributions. “The budget that the Commission has proposed is ambitious, innovative and forward-looking. In particular at a time when national budgets are under pressure, this framework will not cost tax-payers any more than at present”, said José Manuel Barroso.
He pointed out that, according to some preliminary estimations, the financial transaction tax, could reduce the member states' contribution to the EU budget by 50%. This “means more money from the financial sector rather than from national, public budgets”, he said. (LC/transl.jl)