The EU’s next multi-annual budget must support the objectives defined in the Europe 2020 Strategy, said budget and financial committee chairs of member state parliaments, who were in full agreement at their conference in Budapest, on 25 February.
When planning the next multi-annual budget, we certainly need to take into account the new challenges for Europe, the increased importance of energy policy or migration, emphasised Zsolt Becsey in the conference. The Minister of State for Foreign Economic Relations of the Ministry for National Economy highlighted: Europe cannot be strong if the existing resources are eroded. Mr Becsey said that the EU’s funding has been steadily decreasing up to now. Earlier, the maximum expenditure level was set at 1.27 percent of the EU’s total GNI (Gross National Income), while today it is merely 1 percent.
Cohesion, agricultural policy, research and development
You can debate how well cohesion funds have been used, but you should also consider to what extent the regional disparities could have increased, without the EU’s relevant allocations. This is a matter of competitiveness, added Mr Becsey.
The Hungarian Presidency cannot accept the “re-nationalisation” nor phasing out of the Common Agricultural Policy (CAP), although naturally, its requirements could be changed, the Minister of State said. However, such community expenditures are well below 0.5 percent of the GNI. “I do not think this is too much,” commented Zsolt Becsey, who suggested that research and development (R&D), should also receive appropriate funding. The new, eighth R&D framework programme should enable every member state, and the poorest regions to have access to research funds, highlighted the Minister of State.
Five or seven years?
The Minister of State did not take sides in the debate on whether the next financial framework budget should last for five or seven years. He said the EU should add new resources of its own, to make its funding more transparent; but this idea has not been developed enough for implementation. Most of the contributions will remain GNI-based in the next budgetary period as well, said the Minister of State.
Lamfalussy: a new stage of crisis
Alexandre Lamfalussy, professor of the Catholic University of Louvain-la-Neuve, in Belgium, former president of the European Monetary Institute, known as the precursor of the European Central Bank, believes that we have entered a new stage of crisis. Banks seem to be past the worse, but an increased level of public debt also poses a risk for them: if government bonds suddenly lose much of their values in the market, they could get into trouble once again, explained Mr Lamfalussy.
According to the professor, well-operating markets do not necessarily guarantee a stable financial environment, and the new European financial supervisory regime established in January, only gives an opportunity, rather than a guarantee, to governments for appropriate action.
Smart, sustainable, innovative growth
Jutta Haug, Chair of the EP’s Special Committee on Political Challenges and Budget Resources, highlighted that the budget must be harmonised, with the Europe 2020 Strategy. The MEP did not find the budget level excessive, given its 37 percent growth over the last ten years, as opposed to 62 percent in member state budgets. In addition, 80 percent of EU funds are investments. Therefore, they are not spent on current maintenance costs of administrative machinery. However, Ms Haug believes that the most important challenge is to place the EU on a smart, sustainable and innovative growth trajectory, which should also be supported by the budget.
Ending the double standard
At the end of the debate, Zsolt Becsey said the next financial perspective should not make a distinction between first, and second class, member states. It is especially important to eradicate the double standard after 2013, which can still be felt today, in the utilisation of CAP and cohesion funds. The Minister of State took the view that the challenge of competitiveness should be faced in double pressure: budgets should remain balanced in parallel with the vital fight to reduce poverty. According to Mr Becsey, Southern Europe’s countries rightfully want other member states to consider migration as an important issue. At the same time, the EU’s eastern part is also right in asking other member states to devote more attention to the fight against poverty, or the Roma Strategy now in the making.