Brussels, 30/06/2016 (Agence Europe) - At a hearing of the European Parliament on the budgetary implications of the current refugee and migration crisis, in Brussels on Thursday 13 June, George Soros, the American billionaire financier of Hungarian origin, said that the “EU will not be able to survive with a budget of this size”.
At this joint hearing of the committees on budgets, foreign affairs, civil liberties, justice and home affairs and development of the EP, Soros, the founder and chair of the Open Society Foundations, said that the EU would need €30 billion a year to manage the migration and refugee crises.
Cohesion and CAP may have negative effects. Soros set the cat among the pigeons by stating that in the forthcoming budgetary programming period (2021), the funds earmarked for cohesion policy (32% of EU expenditure today) and the common agriculture policy (38% of expenditure) would have to be cut “considerably”. Answering questions from the members of the European Parliament, Soros argued that the CAP and the Cohesion Fund were burdens that needed reducing as these policies have negative effects. “It's not small farmers that benefit from the CAP, but the major food industry”, he said. He also lamented the poor allocation of resources and recommended paying credits mainly to the least-developed countries of the world, where agriculture is cheaper. He said that the cohesion policy has been used to “monopolise resources” and has been open to “corruption” in the beneficiary countries.
The UK referendum: a springboard to a stronger Europe. Soros went on to say that the results of the referendum in the United Kingdom had been an unpleasant surprise, but that it had led to positive reactions such as calls for a second referendum and renewed enthusiasm for the EU). He said that the feeling that you have a lot to lose if you leave the EU could become a springboard to a better and stronger Europe. He also said that the EU should not punish the British voters by overlooking the EU's shortcomings. “The EU's leaders need to recognise their own mistakes, this is an opportunity to reinvent the EU”, Soros stressed, but warned of the explosion risk to the EU.
Criticism of the EU/Turkey agreement on migrants. Soros expressed considerable criticism of the EU/Turkey agreement on migrants: - it is not a truly European agreement, as it was “imposed” by the German Chancellor, Angela Merkel; - the agreement does not have the funding it needs; - it is not a voluntary agreement, as it imposes quotas which many member states were against; - the agreement has made Greece into a holding centre made up of defective infrastructure; - member states are reluctant to work with each other; - migrant flows have dropped in Greece, but increased the steeply in the central Mediterranean.
“Desperate” lack of financial resources. Without sufficient funding, the EU will be unable to deal with the expectations of the European citizens, the American billionaire said. “At least €30 billion will be needed within the EU to build effective border agencies to guarantee dignified reception conditions and set in place fair asylum procedures and integration procedures”, said Soros. We must also support the countries which are hosting refugees in Africa and the Middle East. He added that the EU had “compromised” the Schengen system by increasing its economic costs.
Emergency fund by creating debt. As many MEPs also did, he criticised the solution, which he feels should only be temporary, of creating an off-budget fund for Syria or Turkey, for instance. He called for a “large-scale collection of emergency funds”, involving the creation of debt using leverage effect of the EU budget, rather than “gathering various budgetary offcuts together every year”. “Full use must be made of the EU's triple-A rating, to create economic stimulation for Europe, as interest rates are at record lows”. Soros believes that now is the time to take out debt to help migrants and refugees. However, he admitted that taking out debt with the EU's current budget raises issues, given the limited resources of that budget.
New taxes. He suggested changes to the system of EU own resources to bring in new taxes, such as a fuel tax. He described the reduction in 2014 of the ceiling of the EU's own resources as a “tragic mistake”. In particular, Soros reiterated the idea of a pan- European tax on petroleum products. “The EP should think seriously about this idea”. The idea would be considerably to increase the amounts the EU can borrow to pay for new initiatives. He admitted that the principle of unanimity at the Council on these issues (own resources and taxation) continue to be a major obstacle. Consequently, he recommends creating an agency bringing together the countries which wish to move forward in this area.
Parliamentary control of the ESM. Finally, Soros expressed the view that the Eurozone needs its own budget and the ESM (European Stability Mechanism), the European instrument to manage financial crises in the Eurozone “could be seen as the embryonic stage of such a budget, but it is subject to the veto of the national parliaments”. The solution, he feels, is to put the ESM under the control of the Commission and the EP to extend its use to other purposes, such as creating a programme to fight unemployment in Europe.
“We agree with you, we do not have enough money for the migrants”, said Jan Olbrycht (EPP, Poland). The MEP hopes to take advantage of the mid-term review of the multi-annual financial framework of the EU (2014-2020) to address this matter. He agreed that it was no longer feasible to keep the same percentages for the CAP and the cohesion policy, but the amounts of these should not be reduced. This means that the budget earmarked for migration must be increased, which would change the percentages between the various categories of expenditure, without reducing the money available to the CAP and cohesion, he implied. Eider Gardiazabal Rubial (S&D, Spain) said that with a bit of luck, “we will be able to make progress on the financial transactions tax by the end of the year”. Gérard Deprez (ALDE, Belgium) said that he had the impression that this €30 billion would not be for the migrants who come to Europe, but for the neighbouring countries. He said that this would not respond to the citizens' expectations if the sum of €30 billion for migrants were to be announced. “And if you announce a reduction in the agriculture funds, you risk losing the trust of the farmers”, Deprez concluded. (Original version in French by Lionel Changeur)