09/06/2011 Financial perspectives 2014-2010: Parliament ready to stand up to Council

At the plenary session in Strasbourg on Wednesday June 8th, MEPs adopted Salvador Garriga Polledo’s (EPP) report (468 in favour, 134 against and 54 abstentions). The report was written within the SURE committee (Special Committee on Policy Challenges and Budgetary Resources for a Sustainable European Union after 2013) and relates to the next multiannual financial framework (MFF). In this text, the Parliament asks for the European budget to be increased by 5% from 2014. Member States are far from being in agreement with this proposal, particularly the net contributors – United Kingdom, France and Germany.

Parliament wants a more ambitious European budget

With the financial crisis, Member States have one answer – austerity i.e. tightening their belts and making cuts both at national and European level. This implies a freeze on spending and even a reduction in the European budget.
The European Parliament, for its part, is relatively united in finding this solution unviable – with the exception of eurosceptics who are line with the Council.

“Reducing the EU budget is not a viable option for those of us who believe in a competitive Europe” said Salvador Garriga Polledo during the presentation of his report to colleagues.

We must propose a post-crisis future to citizens so maintaining the budget at the 2013 level would be absurd.

Alain Lamassoure (EPP), president of BUDG (the budget committee)

The Parliament has thus requested a budget increase on the level defined for 2013 by 5% from 2014 in order to “reflect the EU 2020 strategy and other agreed policies” according to Jutta Haug (S&D), president of the SURE committee. “When we are asking for increases, it is not because we are inventing things. We just want a realistic and implementable budget,” he added.

As we know, the Lisbon Treaty gave new power to the Parliament in budgetary matters, powers that it did not have during the last negotiations for the 2007-2013 period. As Alain Lamassoure says, “the Parliament was not at all involved in the Council’s meetings which were often carried out behind closed doors, sometimes at night. This is no longer feasible with the Parliament’s budgetary powers.” The president of the BUDG committee went on to say that he hopes there will be real political negotiations with Member States.

The Member States however, and especially the net contributors, are not budging from their position. They want expenditure to be frozen until 2020 – at least that is what the British, French, German, Dutch and Finnish leaders demanded last December.

It promises to be a tough battle with the two institutions already showing themselves in opposition during the 2011 budget negotiations which went as far as the conciliation stage. MEPs think that Europe needs to ensure it has the means to finance the new competencies offered by the Lisbon Treaty. This can only happen with an increase in spending.

Furthermore, the Garriga report calls for maintenance of the current budget levels for the two policies that represent 80% of the European Union budget total: the Common Agricultural Policy and the Cohesion Policy. Yesterday’s vote in plenary also confirms the creation of a category of intermediary regions enabling regions in transition or that have recently passed the threshold for obtaining cohesion funds to continue being supported in their territorial development.

Achieving the ambitious budget

Beyond the issue of expenditure, the Garriga report also touches on the question of income and, in particular, the European Union’s own resources that were planned for in the Lisbon Treaty.

MEPs in plenary were very critical of the current financing system that is mainly based on contributions from Member States. They feel that a system based on proper own resources would be “fairer, more transparent, simpler [and] more equitable”, but specify that this must not affect the size of the budget or increase the general tax burden on citizens.

The European Commission will present its proposal for the next multiannual financial framework on June 29th and 30th.


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