President. – The next item is the report by László Surján, on behalf of the Committee on Budgets, on the Council’s position on Draft amending budget No 7/2010 of the European Union for the financial year 2010, Section III - Commission (13476/2010 - C7-0261/2010 - 2010/2120(BUD)) (A7-0250/2010).
László Surján, rapporteur. – (HU) Honourable Council representatives, Commissioner Lewandowski, ladies and gentlemen, the Commission proposed and the Council adopted the seventh amendment to the 2010 budget. What is the essence of this amendment?
Well, if we wanted to joke around, this would be a good topic. We have created a blank line, a new line in the budget, into which we will not put a single cent, let alone billions. At the same time, journalists revel in reporting that this involves EUR 60 billion. This EUR 60 billion, as the caption indicates, is none other than a guarantee, and the Commission believes that the chance of it being called in, of having to actually pay it up, is zero.
Well, the worst case scenario is not always to our liking, but the main point is that there is very little likelihood of having to move actual sums of money through this row. So why have it at all? And why as early as now, in the 2010 budget? Because what we are talking about is, in fact, part of the plan designed by the European Union to resolve the financial crisis of countries getting into difficulties in the future.
This is the item that refers primarily to the Parliament and the European Union’s budget, and has an upper limit which cannot exceed EUR 60 billion for the period ending in 2014. This 60 billion is a fixed upper limit. Why must we do this now? We must do it because this is a message. A message to the market. A message to those who doubt that we want to rescue countries which may get into difficulties in the future. At the moment, there is no need for this, so there is no point filling it up with money, but it is worth adding the line to enable us to act promptly if it is needed in the future.
This blank line is also a message to Member States concerned that we are taking more money away from them, to reassure them that this is not the case here. This story is not about Greece. It is, first of all, about the future. This is why it is not right for a Member State to try to evade the duty of solidarity by referring to the Greeks’ supposed or actual errors. The proposal before us is a plan for solidarity among Member States, and without solidarity, ladies and gentlemen, there is no European Union.
Janusz Lewandowski, Member of the Commission. – Madam President, Draft amending budget No 7 is a follow-up to the decision to establish the European financial stabilisation mechanism, which is, in turn, the response to the dramatic developments of March, April and May in the financial markets. Therefore, the European financial stabilisation mechanism – up to EUR 60 billion – has been established in addition to the already existing balance of payments facility, with more or less the same philosophy.
In response to the question from László Surján, under the normal desired circumstances, even if a European financial stabilisation mechanism is mobilised, this should not have an impact on the EU budget. Under normal circumstances, that is, where the beneficiary state taking the loans repays the loans, it is activated as a guarantee but without a financial impact upon the budget.
In the highly unlikely scenario – not zero probability, unfortunately, but very unlikely scenario – that a Member State defaults on its obligations, we have to ensure that the European Union is ready in time to fulfil its legal obligations towards the lenders.
So we should be ready for this unlikely bad scenario. Put simply, that is, in a sense, what is behind Draft budget No 7. Therefore, as with the balance of payments facility, we proposed creating a structure for the new budget item on the expenditure side of the budget and a corresponding new budget article on the revenue side of the budget. These are token entries – as happened with the balance of payments facilities – and have the same logic behind them. The philosophy behind this is that we should be ready in case.
I am therefore happy that Draft amending budget No 7 has been discussed and has already been formally adopted by the Council on 13 September. Now we hope for the same decision from Parliament.
Francesca Balzani, on behalf of the S&D Group. – (IT) Madam President, ladies and gentlemen, the amending budget we are discussing today and will be voting on in the coming days is an important document. It marks the last step for implementation of the European financial stabilisation mechanism, which was sorely needed in May to calm the severe storm that hit the euro and, therefore, the EU.
One certainty came out of that storm: there are no individual Member State problems any more, because the individual problems inevitably become the problems of them all, and so a common response is required. Europe has found the courage and the strength to provide this common response that we are, in fact, discussing here today.
This new budget line marks a clear boundary. It is the first step towards a new common approach to the financial policies and also, in the future, to the economic policies of Member States with regard to the European budget. It is the first step towards that integrated semester in which the budget decisions of the individual Member States and the EU budget will be compared more closely.
The budget is therefore once again an instrument – which has always been the fundamental implementation of EU policies – that is taking centre stage and proving to be a fundamental vehicle for building Europe after the Treaty of Lisbon as well. Above all, it draws our attention to the importance of sound and responsible management of public resources as a prerequisite for real development and for a future of real European growth.
Isabelle Durant, on behalf of the Verts/ALE Group. – (FR) Madam President, it is true that we are talking here quite calmly about an adjustment to the 2010 budget and about the insertion of one line for the record, an amending budget said to be ‘technical’. We all know, however, that the calmness of this debate when compared to the previous one – which was a little less calm – is also due to a courageous and mutually supportive decision that was taken when tension was at its peak in the euro area last May.
In fact, that was a weekend when the Heads of State or Government created the first-rate European financial stabilisation mechanism, which allows the Union to borrow on the capital markets in order to provide loans to Member States that are in difficulty, subject to certain conditions.
It is truly this spirit of solidarity that allows guarantees to be provided in the interests of Europe as a whole, and which confers true added value on the European budget. There is the good example.
Unfortunately, the current own-resources ceiling, which is set at 1.23% of gross domestic product, has not been enough to create a self-sufficient mechanism. The budget’s share accounts for no more than EUR 60 billion, and the rest – EUR 444 billion – is supplied by an intergovernmental system called the ‘special purpose vehicle’, which is guaranteed by the Member States in the euro area; a system from which, by the way, Slovakia has recently withdrawn.
Today’s calm therefore certainly allows us to have a discussion, but it obliges us, above all, to go further and to do more within the framework of the future financial perspective. It is in this sense that I think we must raise the own-resources ceiling so that we can create a genuine macro-economic role for the European budget, which would, at the same time, provide a buffer or European investment plans and/or more guarantee mechanisms, depending on the state of the European economy.
We ought also to design new financial instruments. In this context, for example, Eurobonds, in partnership with the European Investment Bank, would be a very good tool.
Finally, we must, as a matter of urgency, introduce new own resources, such as the financial transactions tax, the carbon tax or a tax on businesses, which would, at one and the same time, allow us to reduce the GDP-based contributions from Member States and dispense with the infamous debate over net contributors.
So that is the enormous task that awaits us, especially in the Special Committee, but, Commissioner, these are also matters with which we must all be ready to engage.
Marta Andreasen, on behalf of the EFD Group. – Madam President, tomorrow we will be voting on Draft amending budget No 7, which covers the guarantee that the EU has been asked to provide for the European financial stabilisation mechanism. This mechanism, which makes it possible for the Union to borrow funds in the capital market and then loan to Member States in financial difficulties, implies that if a Member State is not able to reimburse the loan, the European budget would be used to cover the debt.
Colleagues, I call your attention to the fact that the guarantors of this financial stabilisation package are actually the Member States, many of which are themselves in the midst of a financial crisis. We are talking about EUR 60 billion. This is not a token. Where are we planning to find the money if the guarantee has to be honoured?
How can we vote in favour of such an amending budget when the Commission has not established priorities for spending from the budget in case the European Union is called to honour the guarantee? If we act responsibly in defence of constituents’ interests – even if we are being told that the risk is low – we should vote against this resolution.
Franz Obermayr (NI), – (DE) Madam President, the assistance given to Greece was sold to us as an exception from the bail-out ban, on the basis of Article 136. However, Article 136 does not provide a basis for giving credit to Greece since it only allows measures in accordance with the relevant provisions of the treaties. Not only are these not provided for in the TFEU; they are actually explicitly banned. The provision therefore does not authorise further measures, and this was also the conclusion reached by the Centre for European Politics, or CEP for short, in its relevant report. The finance ministers of the euro area decided to assist Greece by providing credit at an average interest rate of 5%. However, the CEP experts have proven that credit provided at a politically motivated interest rate that is below the market rate represents an illegal subsidy. The assistance given to Greece was thus extremely controversial from a legal point of view, if not downright unlawful.
As far as the actual implications are concerned, Commissioner, I would like to pass on to you the assessment made by the German economics expert Joachim Starbatty, which I fear is sadly correct: if the euro area countries continue to be answerable for the debts of other Member States, then in 10 years’ time, the euro will no longer exist. We have to eradicate the disease, not simply put ointment on the wound. Euro area countries that can no longer service their debt need to become competitive again by leaving the monetary union. Otherwise, I believe the euro has no future.
Reimer Böge (PPE). – (DE) Madam President, the Council has already taken flight – possibly because of the fierce criticism it met with on the previous item, although the content of the Surján report has done something to repair what was decided by the European Council during this difficult, long night on the stabilisation package. Now the Commissioner has spoken of the unlikely event of these guarantees being used in respect of the European budget. If we are optimists, then we will accept this basic assumption for the time being.
Nonetheless, we must bear in mind that where guarantees are concerned, we already have three unlikely cases in the European budget: a loan fund for the investment bank with guarantees of just over EUR 100 million. Before the euro was launched, we had a situation in which all the Member States were able to obtain assistance with supporting their balance of payments, at that time with a ceiling of EUR 16 billion. Following the introduction of the euro, this arrangement was restricted to non-euro countries, and in the wake of the 2009 financial crisis, the ceiling for non-euro Member States was expanded to EUR 50 billion, of which around EUR 9-10 billion is currently utilised as guarantees.
Now, with the Treaty of Lisbon, we have the situation that Article 143 explicitly refers to the non-euro countries. Undoubtedly, Article 352 would have been the most appropriate legal basis, but that would have meant getting Parliament involved – as well as some national parliaments – and therefore it was probably difficult to make recourse to it in the difficult circumstances of this decision. In this respect, then, Article 122 was certainly not the most correct legal basis, but it was the most politically expedient legal basis and the simplest without involving Parliament.
Clearly, there was a gap in our regulations here, but this did not result in the European Union being unable to act in a time of crisis. I can accept that. Nonetheless, the decision by the European Council on this tricky legal basis means making recourse – if necessary – to the margin between the limit of the Union’s own resources and the maximum level of the multiannual financial framework.
Article 310 of the treaty clearly states that no legislative acts shall be adopted that exceed the limit of the Union’s own resources or the multiannual financial framework. If need be, then, a revision is required. In this respect, the Council itself took a huge step without involving the budgetary authority as regards the future debate on the issue ‘What is the upper limit of a financial perspective?’. So let me say that the future upper limit of the multiannual financial framework will be the limit of the Union’s own resources, and nothing else.
We should approve the report on the grounds of political judiciousness, but we should encourage and fight to ensure that in future, we debate properly with each other the gaps in regulation that clearly exist as well as how to involve Parliament and how to close these gaps. This, too, should form part of the common interinstitutional agreement on the budget based on the Treaty of Lisbon.
Jacek Włosowicz (ECR). – (PL) We are speaking, today, of a mechanism for financial stabilisation in Europe, and we are speaking about an amending budget. These are steps which are certainly intended to increase the security and reliability of the financial system in Europe. These measures certainly are necessary at the moment, so that we do not get into even greater financial difficulties in the future. I hope that the measures we are talking about, today, will be effective and will be, as it were, a medicine and will treat the symptoms. However, this medicine certainly will not remove the causes, and it is they which have been the main problem of recent months. Without fundamental changes to the European finance system, the measures we are now considering can only be of temporary help.
Therefore, we have to begin by making fundamental changes, so that Europe’s finances will be more stable and transparent, and so that we, as Parliament, are not used every so often as fire fighters who are called to come and put out a fire. Such measures can only be a help and not the basis for permanent future action.
Angelika Werthmann (NI). – (DE) Madam President, ladies and gentlemen, to ensure the financial stability of the euro area, a package of measures is now being launched. The question that concerns me in connection with this line is where this money is actually to come from in the event that, contrary to expectation, a Member State should make such an application.
You mention caution, Commissioner. In order that this event remains merely a hypothetical situation, I would really urge the Commission to pass measures that provide sufficient deterrent to ensure that the Member States genuinely do everything in their power to ensure they never find themselves in this situation.
Janusz Lewandowski, Member of the Commission. – Madam President, some small clarifications for Mrs Andreasen on this very issue. Draft amending budget No 7 does not involve the Member States’ guarantees; that is for the other part. What is guaranteed by the Member States is EUR 440 billion of bilateral loans. As for the structure of the budget, this is the copy of a balance-of-payments facility, and again, this is a question which has been asked already.
This is a typical arrangement for budgetary items which concern lending operations without a specific quantified guarantee fund. This is therefore a token entry. If the need arises for fresh money – so far activated in the balance-of-payments facility for Hungary, Latvia and Romania up to an amount of EUR 14.6 billion – then the Commission will put forward a proposal on the appropriations needed by means of a transfer or an amending budget.
That is the machinery, but it is nothing new – merely an extension of an existing balance-of-payments facility to the eurozone member countries – and I agree with Reimer that this is a very flexible interpretation of the Lisbon Treaty.
László Surján, rapporteur. – (HU) First of all, I owe thanks to the political groups supporting this report, and I believe that the report truly serves the interests of security. However, the critical remarks pointing out that we have an EUR 800 billion package out of which Parliament can consider or deal with 60 billion are also justified.
To some extent, this gives the impression that Parliament is not operating within the framework of the Treaty of Lisbon, or does not even exist yet. However, our job is to work with this EUR 60 billion and, in that respect, I would like to make it clear again that obligations are incumbent only upon euro area Member States. Therefore, if the words of a speaker who says no, protecting his or her constituents’ interests, may be taken to mean that the UK will soon join the euro area, then this day deserves to be joyfully celebrated and written with red letters in the annals of the European Union.
Because I, unlike many others, do believe in the euro area and would like to see that my country, as well, will soon be required to take financial responsibility in this rescue plan. I do hope that the probability of this pledge being called in is zero or almost zero, since the Member State runs an enormous risk if it does not comply with its financial obligations after the rescue.
If I remember correctly, the Treaty of Lisbon even invokes the possibility of expulsion in certain circumstances. Non-compliance with financial obligations would be such a serious mistake that even this sanction would have to be given consideration. I think this is the guarantee that another speaker requested. In closing I wish to thank you once again for your attention, and I ask my fellow Members to support this report tomorrow. Let this be another source of security for the citizens of Europe!
President. − The debate is closed.
The vote will take place at midday tomorrow (Wednesday, 22 September 2010).
(The sitting was suspended at 18:35 and resumed at 19:00)
IN THE CHAIR: Edward McMILLAN-SCOTT Vice-President