Brussels, 26/03/2012 (Agence Europe) - Unsurprisingly, the main net contributors to the EU budget (including Germany, the United Kingdom, the Netherlands, Sweden, Austria and Finland) had their scissors out at the General Affairs Council of Monday 26 March, calling for €100 billion to be trimmed from the total envelope proposed by the Commission for the forthcoming multi-annual financial framework 2014-2020. These countries want to freeze the EU's expenditure over this period. In the opposite corner, other countries, including Poland, stated that the Commission's proposal was the minimum requirement, whilst a number of countries defended the Commission's proposal. Some countries (Italy, Poland, Lithuania and Estonia among them) called for macroeconomic conditionality to apply to all EU policies, not just in the field of structural funds, rural development and fisheries funds. In April, in the framework of continued work on the “negotiating box”, the General Affairs Council will discuss the issues of agricultural and cohesion policy expenditure.
The Council held a guideline debate on the first version of the negotiating box, which describes the main issues and options regarding certain sections of the multi-annual financial framework for the period 2014-2020. More specifically, this document focuses on headings 1 (intelligent and inclusive growth), not including the cohesion policy and the Connecting Europe Facility (CEF), 3 (security and citizenship), 4 (Europe in the world) and 5 (administration), and on a number of horizontal issues.
At the press conference which followed the General Affairs Council, the Danish minister for European affairs, Nicolai Wammen, stressed the vital importance of the European budget against the backdrop of the worst economic crisis since the Second World War. He called on the institutions in the countries to show a spirit of compromise in order to facilitate agreement by the end of 2012. “There are still major problems in bringing the positions of the member states closer together, but the work is progressing well”, he summarised. The negotiating box will be put before the European Council in June.
During the debate, Greece noted the “strong pressure brought to bear by the net contributor countries to the EU budget for a reduction” of the budgetary envelope proposed by the Commission for the financial framework 2014-2020. However, as a result of the Lisbon Treaty, we have new skills. Greece also pointed out that the EU was in full recession, which means that action must be taken within and at the level of the EU to relaunch economic growth and create jobs. In Greece's view, the question of the own resources of the forthcoming multi-annual financial framework is a fundamental element of the negotiations. It reiterated its criticism of the macroeconomic conditions (suspension of the structural funds of a country which is guilty of budgetary slippage). Greece supported the Commission's proposals to fund the ITER and GMES projects outside the EU budget in the future.
For Spain, the research effort should be based on excellence, but it is also vital to ensure a balance between criteria and access to funding. The country also spoke in favour of: - a differentiated ICT policy; - the inclusion of a special innovation programme in favour of SMEs; - the inclusion of tourism in the negotiating box; - defence of the Erasmus programme for all; - certain cuts to external action expenditure; - further reductions of the administrative expenses are possible (the individual countries of the EU are making sacrifices, we do not see why the EU should not do likewise, argued Spain); - the inclusion of ITER and GMES within the budget of the EU; - a reserve (outside the budget) to manage agricultural crises; - the allocation of a proportion of the European Globalisation Adjustment Fund (EGF) in favour of the agricultural sector.
Romania pleaded in favour of keeping in place adequate funding for the cohesion policy and the common agricultural policy (CAP). This country argued that any link between the absorption rate and allocation of resources to the member states is unacceptable. Romania supports the proposal to fund ITER, GMES, the Globalisation Adjustment Fund (EGF) and the solidarity fund of the EU. Romania takes the view that macroeconomic conditionality should be discussed in the general part of the negotiating box (and not just regarding the structural funds). Romania could accept a reduction in credit to external actions and welcomes the cuts proposed by the Commission for agricultural expenditure.
Italy stated that it will define its position once it has a clear idea of the figures for the various headings. The budget should be “seen in its entirety”, all off-budget elements should be put back into the multi-annual financial framework. Italy also defended a “transparent” budget which the citizens can understand. Italy said that macroeconomic conditionality should apply to the whole of the budget, not just certain policies. The country stressed the need to simplify the rules of the budget (public contracts and calls for tenders) and to find a solution to the problem of the RAL (commitments unspent) by means of better management and, if necessary, innovative instruments. What the Commission is proposing on administrative expenditure (5% reduction of staff levels) is “interesting”, Italy concluded.
The Netherlands argued that the detailed proposal of the Commission is “far too high” and should be cut by €100 billion. The country recommended cuts under all headings and supports the criteria of excellence to be retained in the negotiating box in order to obtain funding in the field of research. The ITER and GMES funds (and even all funds) should be included in the budget. The Netherlands also took position in favour of a budgetisation of the EDF (European Development Fund) and called on the Commission to do more in terms of cutting administrative expenditure, by undertaking structural reforms (pensions, salaries, etc).
France feels that “savings are needed, given the restrictions on many countries of the EU”. The representative of France asked that, for the sake of greater clarity, figures be expressed in constant euros and current euros. In heading 1 (growth), the element of excellence is a promotion element for all research policies. France (supported by Portugal) called for two sub-headings to be kept in place (the first on justice and security and the second on citizenship) within heading 3. There are more savings to be made in heading 5 (administration), with the aim of achieving a “nominal stabilisation of administrative expenditure”, said France. All instruments and programmes outside the financial framework should be brought back into the budget and, for the major policies (ITER, GMES), France is prepared to look into other solutions, such as setting a sub-upper limit within a sub-heading. France argues that the solidarity fund of the EU should be included within the upper limit of heading 3 of the budget and the EDF should be included within the upper limit of heading 4 (together with the reserve for emergency assistance). Lastly, extending the EGF to the agricultural sector “should not be used to compensate unbalanced trade agreements”, France warned. France also said that the RAL needs to be tackled.
Austria defended a reduction of at least €100 billion from the Commission's proposal and called for all funds to be brought within the budget of the EU, including the EDF.
In the view of Germany, the maximum level of the EU budget should be 1% of EU gross national income. The Commission needs to reduce the envelope proposed by €100 billion, said the German delegation. ITER, GMES and the EDF need to be kept within the budget of the EU, says Germany.
Portugal said that the cohesion fund should continue to make a contribution to research. The country supports the proposal for ITER and GMES to be funded outside the budget.
The Czech Republic called for the total amounts proposed by the Commission to be reduced (not exceeding 1% of EU GNI). An effective cohesion policy remains a priority for the Czech Republic, and the country repeated its criticism of macroeconomic conditionality. The Connecting Europe Facility (€10 billion) is a problem for the Czechs. The country called for more ambitious proposals on reducing administrative expenditure and keeping the credits for ITER, GMES and the solidarity fund within the EU budget. The country called for the EDF to be kept outside the budget of the EU.
In the opinion of Sweden, the payment appropriations proposed should be reduced by “well over €100 billion”. Reductions need to be made in the CAP and the cohesion policy, argues Sweden.
The United Kingdom spoke in favour of a “maximum level of rigour” when examining each of the headings of the budget to make savings of €100 billion and thus achieve a “freezing of expenditure”. A solution must be found to this “enormous” RAL. All of the budgetary instruments must be included in the budget and the United Kingdom is prepared to support the EGF and the new reserve for agricultural crises.
Latvia called for macroeconomic conditionality to apply to all budgetary items. Lithuania called for an increase of the envelope earmarked for dismantling nuclear power stations and also for macroeconomic conditionality to apply to all EU policies.
In the view of Poland, the detailed proposal of the Commission should be the minimum. In the event of any reduction credits, we need to take account of the effects this will produce, argued Warsaw. Macroeconomic conditionality should apply to everybody, otherwise it is a bad idea, Poland added. The country proposed that the ITER and GMES funds be left out of the EU budget and supports the idea of keeping the EDF outside the multi-annual financial framework of the EU. Hungary also said that it will be impossible to create more Europe with less money.
Finland expressed the view that the level of expenditure should be €100 billion less than the Commission's proposal.
Bulgaria and Estonia agree with the envelope proposed by the Commission on the whole of the financial framework.
For Malta, the Commission's proposal is a good start and conditionality should apply to all expenditure. ITER and GMES should be funded outside the financial framework and the EGF should not, Malta argued, be extended to the agricultural sector.
Belgium described the budget of the EU as “modest”, although it remains a relevant instrument to put the European economy back on track towards growth. The country supports the Commission's proposal on the whole envelope. The emergency intervention instruments should remain outside the financial framework and Belgium is prepared to accept ITER and GMES being reintroduced into the budget, but with no reduction to the overall budget.
Responding to those who took the floor, Budget Commissioner Janusz Lewandowski noted that certain delegations had said that everything that comes outside the financial framework should be put back in it: “This is easier said than done. We cannot provide these reserves for unforeseen circumstances. If we put these instruments back within the framework, this will artificially increase the budgetary items.” On macroeconomic conditionality, he said that if this principle should go beyond what it has been set up for (structural funds, rural development, fisheries), “there will be disputes with the legal services”. There are causes for concern over the RAL, but also over the (low) level of payment commitments in the annual budget, the commissioner stressed.
The commissioner responsible for administration, Maros Sefcovic, said regarding the calls made by several member states for reforms of the European civil service that such a reform had already been carried out in 2004. He stressed that proposals for reform are on the table, making it possible to save €9 billion on administrative expenditure between now and 2020. The commissioner pointed out that only Germany provides for working hours of 41 hours per week. For European civil servants, the Commission is proposing 40 hours and in many countries, civil servants work 35 to 36 hours a week. Regarding pensions, the retirement age for EU civil servants has risen to 65, with the option to stay at work until the age of 67. In many countries, retirement age is still 60 or 62. Furthermore, European civil servants pay 11.6% of their salaries into their pensions, whereas in many countries, national civil servants make no contribution to their pension pot (and in most countries, the contribution is between 3% and 6%). The Commission would struggle to recruit top-flight civil servants “because they would be better paid at home”, said the commissioner. (LC/transl.fl)