Addressing participants at the 7th Cohesion Forum on Tuesday 27 June, the Commissioner for the Budget, Günter Oettinger, stated that the post-2020 Multiannual Financial Framework was likely to suffer from a €20 billion shortfall compared to the current budget.
Cutting to the chase, the Commissioner exclaimed that, “I can now tell you that we will be proposing cuts and transfers because it is only by doing this that we can be a credible European Commission”.
On Wednesday 28 June, Mr Oettinger will be presenting a reflection document on the post-2020 budget, together with his counterpart, Corina Crețu, the Commissioner for Regional Policy (see EUROPE 11812). He believes that there are two major “shortfalls” in the European budget.
He pointed out that as opposed to the member states, regions and municipalities, the European Union was unable to get into debt. This naturally limited to Union’s room for manoeuvre. In this context, the Commissioner warned that there would be a €10-11 billion shortfall every year due to the United Kingdom leaving the EU, as well as an additional envelope worth €8-10 billion generated by new EU missions. In the latter case, this involves controls at the EU’s external borders, managing migration flows and new missions in the defence field.
On this basis, Mr Oettinger thinks it necessary to “modernise” cohesion policy and simplify it by making it more flexible in an effort to make these cuts possible. He did, however, point out that one thing was quite “clear-cut”, “We think that this is a bad thing”.
Warning to those seeking harsh budget cuts
The Commissioner was keen to provide reassurances by highlighting the importance of cohesion policy. He emphasised that, “If this policy did not exist, it would be necessary to invent it”. The Commissioner also pointed out that the first goal of territorial cohesion was that it was not about, “weakening the strongest but strengthening the weakest”.
Therefore, the Commissioner appears to be sending a warning to certain member states that are seeking to drastically reduce the cohesion budget, starting with Germany, which was a “net beneficiary” of cohesion policy and not a net contributor.
Italy has also, on a number of occasions, established a link between solidarity when taking in refugees and granting structural funds.
On the question of the next financial framework, the Commissioner addressed certain points but did not provide any detailed revelations regarding the content of the reflection document. First of all, he intends to put the question of the duration of the next multiannual financial framework, on the table. Three options are possible: 5 years, an option that is favoured at the European Parliament; 7 years, the preferred option among member states and 5 +5 years.
Conditions will indeed be extended
The Commissioner highlighted the need for a rethink on the question of what conditions should apply and which will help to freeze structural and investment funds in the event of failure to respect certain principles.
This mechanism was introduced for the current period to link regional policy to the macro-economic framework of the member state in question. In this regard, Mr Oettinger has said that he would like to continue to apply conditions to structural and investment funds during the European Semester budgetary process – as well as to funds linked to research or even the connecting Europe facility (CEF).
In this regard, he said that he would like to improve the socio-economic policy recommendations that the Commission addresses to each member state, as well as by fostering dialogue with the regional authorities.
Mr Oettinger even mentioned the very sensitive question of respecting the rule of law and refugee distribution quotas as conditions applicable. Innovations in this area would have a particular impact on Polish and Hungarian regions. Poland and Hungary are the subject of recent infringements procedures due to their insufficient efforts to relocate asylum seekers in Greece and Italy (see EUROPE 11807).
Oettinger favours agreement before 2019 European elections
The Commission also looked at the question of the timetable. He said that he wanted to avoid any delays to the negotiations on the current financial framework and where the year 2014 had been entirely lost. The Commissioner thinks that there are two possible deadlines for beginning negotiations on the next multiannual framework: either after the European elections in 2019 or in May 2018. The Commissioner is more in favour of the second possibility because it would help to reach an agreement before the elections in May 2019. (Original version in French by Pascal Hansens)