Brussels, 29/06/2016 (Agence Europe) - The European Union needs a thorough mid-term revision of its multi-annual financial framework (MFF) 2014-2020 to improve its management of crises such as the influx of migrants and refugees and terrorism, said the committee on budgets of the European Parliament, in its adoption (29 votes in favour, five against and one abstention), in Brussels on Wednesday 29 June, of the report by Jan Olbrycht (EPP, Poland) and Isabelle Thomas (S&D, France) on this dossier (see EUROPE 11558).
The debate on the preparations for the post-election revision of the MFF 2014-2020, upstream of the Commission's proposal, were naturally caught up in the fallout from the referendum in the United Kingdom. In its adoption of a verbal amendment, therefore, the budgets committee requested that, without prejudice to the results of the forthcoming negotiations with the United Kingdom, the European Commission rapidly notify the MEPs of the budgetary repercussions of Brexit. The European Parliament is expected to vote on this report in Strasbourg on Wednesday 6 or Thursday 7 July.
MFF has reached its limits
The budgets committee, which adopted 30 compromise amendments, states that a review of the MFF in 2016 should take stock of a number of serious crises and new political initiatives, together with their respective budgetary consequences, which were not anticipated at the time of the MFF's adoption. It refers to the migrant and refugee crisis, internal security issues, the crisis in agriculture, the funding of the European Fund for Strategic Investments (EFSI), the payment crisis in the EU budget, the persistent high level of unemployment, especially among young people, poverty and social exclusion, as well as the recent international agreement on climate change and the growing pressure on the development policy.
The MEPs observe that in order to finance the additional pressing needs, an unprecedented recourse to the MFF's flexibility mechanisms and special instruments was deemed necessary, as the MFF ceilings proved to be too tight in some headings. The budgets committee stresses that over the past two years, the MFF has essentially been pushed to its limits.
Migrant and refugee crisis. The MEPs stress that significant, but still insufficient, budgetary resources have been deployed to tackle the root causes of the refugee and migration crisis by reinforcing specific EU programmes under heading 4 (external action). The Commission has made various proposals with an impact on the EU budget, such as those for the establishment of EU trust funds (the Madad Trust Fund and the Africa Trust Fund, with an estimated initial budgetary impact of €570 million and €405 million respectively), or the Refugee Facility for Turkey, for which €1 billion is to be funded from the Union budget. The MEPs stress that the multiplication of such instruments, in the absence of an overall budgetary strategy to tackle crises, create a problem of accountability and democratic control in the EU. They also regret the fact that the member states have so far largely failed to deliver their contributions to the trust funds and call for new funds for the inclusion of the most vulnerable migrants, particularly women and children.
Permanent crisis reserve. In order to be able to react rapidly to crises, such as the one caused by the migratory flows, the MEPs call for the creation of a permanent EU crisis reserve within its budget, over and above the MFF ceilings, to avoid ad hoc solutions such as creating trust funds.
The EFSI, youth employment. The MEPs highlight their support for the EFSI, which aims to inject €315 billion of new investments into the real economy, but stressed that the Union should not pay for new initiatives at the expense of the Horizon 2020 programme and the Connecting Europe Facility (CEF). Readers may recall that the envelopes of these two major EU programmes were cut by €2.2 billion and €2.8 billion respectively to fund part of the EFSI. The MEPs are calling for the youth employment initiative to continue beyond 2016.
Unity of the budget. The MEPs reiterate their long-standing position that the European Development Fund should be integrated in the Union budget as of 2021, while ensuring the financing of the African Peace Facility and security-related operations. If the European Development Fund or ad hoc instruments are integrated in the EU budget, the MFF should be revised so as not to compromise the financing of other European Union policies and programmes.
Duration. The committee on budgets believes that certain elements of the MFF should be adopted for a duration of five years, whilst others, such as the cohesion policy or development, should be adopted for a duration of 5+5 years with compulsory mid-term revision.
Agriculture. The MEPs stress that the tight ceilings for the CAP up to 2020 entail much lower margins than in the previous MFF, despite the growing number of challenges to the sector. They reiterate the crises affecting the dairy, pork and beef meat and fruit and vegetables sectors, and note that the abolition of sugar quotas in 2017 may have repercussions for the sector. The MEPs highlight the budgetary impact of the emergency measures taken in response to these crises, for a total of €500 million out of the 2016 budget and €300 million in 2015. They expressed their firm belief that reducing the agriculture budget would jeopardise the territorial cohesion of the EU, particularly regarding rural areas. The MEPs oppose any moves to renationalise agriculture policy, which would create market distortions and unfair competition for farmers.
The MEPs also regret the fact that the commitment made by the Union to earmark at least 20% of the EU budget (under the current MFF) to climate-related actions has not been achieved. Indeed, the Commission's figures show that just 12.7% of the EU budget year has been spent on climate change.
Own resources. The MEPs call for the introduction of one or several new own resources, ideally with a clear link to European policies that create added value. They note that a high number of new own resources have already been discussed by the high-level group and the European Parliament, such as VAT reform, a financial transactions tax, ECB seigniorage, a reformed EU Emissions Trading System and carbon taxing, transport taxation, corporate taxation, electricity or digital taxation. The MEPs eagerly await the high-level group's recommendations, in order to prepare Parliament's position in this respect and call for the phasing-out of all forms of rebates.
Payment crisis. They regret the fact that the payment appropriations are the consequence of commitments made and state that the mid-term review of the multi-annual financial framework is an opportunity to avoid a recurrence payment backlog, taking stock of the execution of payments and providing a clear strategy to respond to all payment needs. (Original version in French by Lionel Changeur)