Sunday, 27 May 2012

Fw: The challenges of the EU require an ambitious budget

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From: PressEESC <>
Sender: Izquierdo Lopez Alejandro <>
Date: Fri, 25 May 2012 15:59:50 +0000
To: PressEESC<>
Subject: The challenges of the EU require an ambitious budget


No 32/2012

25 May 2012

The challenges of the EU require an ambitious budget

The financial framework for 2014-2020 must ensure that the EU is able to cope with the challenges ahead. The European Economic and Social Committee (EESC) firmly believes that these challenges can only be overcome with an ambitious and efficiently structured budget. This is the position outlined by the EESC in its opinion on the "Budget 2014-2020", adopted at the EESC plenary session on May 24. Mr. Palmieri (rapporteur) from the Workers' Group and Mr. Krawczyk (co-rapporteur) from the Employers' Group carried out a constructive analysis of the Commissions budget proposal, advocating the need to simplify its structure, introduce a new system of own resources and focus on Europe's strategic objectives.

In the light of the current economic situation, the EESC reiterates that the best way out of the crisis is to develop an ambitious European political and economic project, focused on growth and employment – in other words "more Europe is needed, not less". The multiannual financial framework (MFF) for the years 2014-2020 is the main instrument used to implement this political project. Accordingly, the discussion on revising the EU budget must focus on how effective the budget is for implementing the strategies needed to tackle Europe's economic and social challenges. "The EU budget must be increased if we want to relaunch growth in all 27 member states, otherwise we would be giving up our ambitions, the ambitions of Europe 2020. Recalling the spirit of the Rome Treaty the EU needs financial autonomy and that is what we are aiming for," said Mr. Palmieri.

The EESC argues that the European Commission's (EC) proposal, which takes into account the positions of the Parliament and the Council, is excessively geared towards preserving the status quo, in terms of both the allocated resources and the budget structure. This is particularly clear if we consider that while current MFF spending represents just over 1% of EU GNI, the EC proposes MFF spending of only 1.11% for 2014-2020. However, the EESC welcomes the Commission's move to improve and simplify the structure of the EU budget as well as its efforts to deflate the issues of fair return and horizontal fairness between the Member States. In terms of revenue, the EESC supports the introduction of a new system of own resources, which includes a modified VAT resource and the financial transaction tax (FTT). The Committee also suggests exploring the idea of creating new financial instruments, such as bonds. This should, however, be subject to a detailed study of the risk transfer to the public sector.

In terms of expenditure, as the responses to Europe's challenges need to be faced at EU level, there is a need to give more weight to the principle of "added European value" – the idea that one Euro spent at EU level is more effective than the same amount of spending at national level. The opinion analyses two main lines of expenditure in the EC's proposal: the CAP and the Cohesion Policy. The EESC welcomes the proposed CAP expenditure as it implies a reform which is intended to deliver an efficient and effective model of agriculture. Expenditure on cohesion policy, meanwhile, risks penalising the EU's least developed regions when macroeconomic conditionality is applied to the disbursement of cohesion policy funds.

All in all, the EU budget must be transparent and efficient if it is to gain credibility in the eyes of the European public and explain what the cost of non-Europe would be. The EESC therefore stresses the need to monitor the results of EU policies and to assess their social, economic and regional impact. "The budget is a fundamental tool for development and the final guarantor of all European projects. With the approval of this opinion, organised European civil society can give a clear input on what it should look like, too", pointed out Mr. Krawczyk, EESC Vice-President in charge of budget matters.

For more information, please contact:
Karin Füssl, Head of the Press Unit
Tel.: +32 2 546 8722


European Economic and Social Committee

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Tel.: +32 2 546 8207 – Fax: +32 2 546 9764

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