Brussels, 05/02/2015 (Agence Europe) - Mario Monti, who heads the high-level group on own resources, is well aware that he is facing a virtually impossible task but he can count on the support of the European Parliament in his efforts to create real own resources for the EU budget in the future. MEPs are, however, divided on the kind of new own resources to be put in place.
On Thursday 5 February, Monti set out the broad lines of the high-level group's first report (published in late December 2014) for the Parliament's budgets committee. Recommendations are expected by the end of 2016, at the time of the mid-term review of the 2014-2020 multiannual financial framework. A major conference will also be held in 2016, bringing together national parliamentarians and MEPs to discuss this sensitive issue. The high-level group is made up of representatives of the Parliament, Commission and Council.
“Constructive diversity”
Monti noted first of all that the members of the high-level group “must reflect the diversity of interests of the budgetary players, and you all know just how divergent these interests are”. This “constructive diversity” is needed “because we are not going to be able to avoid these differing interests. They have to be taken into account in producing useful recommendations”, said former President of the Italian Council (2011-2013) Monti.
While the high-level group's first report, which assesses the current system, may be somewhat dull and non-committal (it makes no proposals for change to the system), it at least has the advantage of having the unanimous political support of all within the group. Monti said that the fact that the report was accepted by everyone, including the three members appointed by the Council is progress compared with what happened in the past. “We tried to avoid all bias and provocation because, to reform the own resources system, all the players need to be involved”, he made clear. He reminded everyone that a unanimous decision in Council was required for reform of the own resources system.
Monti noted the following points on the content of the report: - the current system is largely based on contributions rather than real own resources; - 80% of budget revenue comes from direct contributions from national budgets (83% in 2013); - the make-up of own resources has significantly altered over the years, helping to make the negotiations among the member states “acrimonious” (notion of net balance); - European citizens do not look kindly on this budgetary wrangling; - hitherto, superficial changes have been brought to the current financing system; - the notion of equity is one that merits particular consideration; - there are major obstacles to reform of the current system.
The report “opens the debate to find pragmatic responses based on the various criteria that could facilitate the choices to be made in the future”, Monti stated. He said that the different kinds of resources should not be assessed without account being taken of the wider context. He stated, too, that the forces at play had to be seen to explain why the reform might succeed or fail. “Finding answers to these questions will require a collective effort”, he said. He concluded, with “cautious optimism”, that this group provided a “livelier alternative than a funeral”.
“Mission impossible”
Jean Arthuis (ALDE, France), who chairs the Parliament's budgets committee, said that this was a key challenge of finding real own resources and spoke of the “mission impossible” being asked of Monti. He said, too, that relations between national parliaments and the European Parliament had to be strengthened.
“This is an issue on which success is politically impossible but on which it is our duty to succeed”, said Alain Lamassoure (EPP, France), who is a member of the high-level group. If a solution is not found to the problem of financing European policies it will lead “inexorably to the death of the whole EU”, in his view. The current system for financing the European budget is “opaque, undemocratic, anti-European, inefficient and unfair because the richer a country is the less it contributes”, he argued. In Lamassoure's opinion, the ultimate aim is to be able to increase the EU budget and to be sure that own resources in place relate to European policies.
There is a systemic problem and budgetary tensions at national level, stated Ivailo Kalfin (S&D, Bulgaria), who also sits on the high-level group. The possible solutions must protect the member states' budgetary sovereignty and not cost taxpayers any more, he said. The objective is to bring greater independence to the EU budget, he concluded.
Guy Verhofstadt (ALDE, Belgium) opined that the second stage would be much more difficult since choices would have to be made on possible own resources to finance the EU budget. “We have to return to the original system of 1957-58”, the leader of the ALDE Group argued. In his opinion, it would be technically possible today to put in place a European “VAT system”.
Several MEPs from the budgets committee spoke: - Vladimir Manka (S&D, Slovakia) said that a model had to be found that enabled the EU to have sufficient funding without penalising business; - Marco Valli (EFDD, Italy) suggested the financial transactions tax or a carbon tax, or even a tax on “illegal” activities (such as prostitution), as possible solutions; - Ernest Maragall (Greens/EFA, Spain) suggested a new tax (to be collected by the states) and stressed that the new system had to be “legitimate”.
“I hope that Mr Monti will be received with as much enthusiasm by the Coreper because that's where the nub of the problem lies”, said Verhofstadt. Monti met the member states' ambassadors to the EU at a working lunch at midday on Thursday. (LC)