Janusz Lewandowski, European Commissioner for Budget and Financial Programming presented the budget review at a policy briefing. He called for a shift in focus to results rather than relative returns for each EU member state, and flexibility in the budget to handle unforeseen happenings. The Commission Communication launched the open debate on the budget review.
Janusz Lewandowski, European Commissioner for Budget and Financial Programming presented the budget and explained the timing. The budget review was originally organised for 2008/2009 but was delayed, which means that currently it is the mid-term review. The Communication was released in the midst of serious challenges facing the EU such as climate change, energy, security, and the economic crisis which has caused a climate of austerity. The Lisbon Treaty has increased the power of the European Parliament which must give its consent to any Council regulation laying down the multi-annual financial framework (MFF). The treaty also requires anonymity by EU Member States on their own resource decisions. Mr Lewandowski explained a dilemma he is facing that Europe’s responsibilities are increasing and at the same time there is pressure from EU governments to limit spending.
Then the Commission spoke on lessons learned and said that on one hand the financial perspectives allow for budgetary discipline and predictability, but on the other hand the budget needs flexibility
to mobilise funds when changing circumstances occur such as the Pakistan floods or the Haiti earthquake. The “just retour” debate that occurred during the preparations for the current financial framework wrongly concentrates on how much each Member State contributes to the budget. The focus should be on how to finance Europe’s political goals.
Mr Lewandowski then explained the difficulties in tying the EU budget with the EU 2020 Strategy goals of smart, sustainable and inclusive growth. The field of manoeuvre is rather limited. Smart growth refers to research and innovation, while sustainable growth will entail mainstreaming energy and climate policies – and further reforms to the Common Agricultural Policy.
On the goal for inclusive growth,Cohesion Policy requires a common framework at EU level for structural, agricultural, rural development and fisheries funds. The Commissioner suggested the focus be on priorities for the whole of Europe instead of reducing the gap between poorer and richer regions. Another option is to combine several EU cultural and citizenship programmes into a single programme to boost visibility. The EU Solidarity Fund could also be broadened in scope.
The creation of the European External Action service should prove the EU with an instrument to be be more powerful on the international stage. The EU is also committed to increasing overseas development aid to 0.7% of gross national income.
Funding for projects needs to be simpler and more accessible. The financial regulations could possibly be simplified, similar to what was done with research projects. This goes along with reducing administrative burdens for projects and tenders.
As for a new MFF structure, the Commission could reduce the framework to three expenditure heading: internal, external and administrative expenditure. Then internal expenditure could be broken down into smart, sustainable and inclusive growth, and citizenship. The Commission also favours changing the budget to a 10-year framework that would coincide with a mandate of two Commissions and Parliaments. There could be a mid-term review in five years to readjust priorities and the allocation of funds.
To help increase flexibility the Commissioner brought up the possibility of generating the EU`s own resources. He admitted that this was a delicate issue and suggested eliminating the VAT-based contribution while implementing a new resource. Possible scenarios include an EU tax
on air transport, energy, carbon, corporate or financial transactions. Lewandowski stressed a key principal of no taxation without representation- any decision about own resources would require ratification by national parliaments.
When reflecting on past budget negotiations, he stated that he intends to involve the Parliament from the start. As a former member of the budget committee, he felt that the Parliament joined negotiations too late last time. In closing the Commissioner urged for policymakers to be ambitious and realistic and to avoid a ‘wish list.’ The Commission plans to table the draft regulation for the MFF by June 2011 and aim for a definitive agreement by 2012.
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