Internal Policies and EU Institutions

Buzek's full speech on the EU financial perspective and priorities of the Czech Republic

Prague -
Monday 20/06/2011

Dear Mr. Speaker, Dear Senators, Dear former Commissioner Spidla, Dear Colleagues,

Today's conference cannot start without a reference to Greece. The solution to the Greek debt crisis is the most pressing issue on our agenda, and one of the greatest challenges the EU has faced since its existence. Greece's rescue concerns all EU Member States and not just the countries in the euro area. We have to overcome this crisis through European solutions, not national ones. National solutions would be both more costly and less sustainable: in the long run, national solutions for the euro would not work. We need to proceed firmly in the creation of genuine economic governance to sustain our monetary union.

I. The EP's guidelines for the post 2013 MFF

I am very glad to have the chance to discuss an issue which concerns us all – the future EU budget, or in technical terms: the multiannual financial framework (MFF). For the first time in EU history, the European Parliament has given its own political input to the shape of the new MFF with a set of political guidelines prior to the European Commission. Our guidelines have received a strong majority (468 votes) in June's plenary in Strasbourg.

The European Parliament is convinced that the post 2013 MFF must fully reflect the ambitious goals of the EU. We believe that the EU needs to allocate sufficient budgetary means to the objectives of the EU 2020 Strategy. As well as re-launching the single market. I am convinced that both of these are the engines we need for European growth.

There are 150 bottle necks and gaps which need to be removed to finish the single market. At the same time we need investments to restructure our energy production and create the energy corridors, and interconnectors, which will allow us to create a genuine single market in energy.

To meet the challenges of our globalised world in this 21st century the EU has to become a strong knowledge based society, and an economy driven by innovations and new technologies. We also have international commitments in the fight against climate change. We need to invest in green technologies not only to remain a world leader in this field, but also to guarantee our low carbon prosperity.

This is why we propose to restructure the MFF into three headings to emphasise the importance of our priorities. The first and biggest heading should be for all internal policies and called "Europe 2020". We propose 4 subheadings: 1) knowledge and innovation policies to promote growth, 2) cohesion policy and employment, 3) sustainability and management of resources, and 4) Citizenship.

The Parliament also believes that the EU needs appropriate resources to fulfil its new Lisbon tasks - such as the external action service. This is why we have proposed a second heading for external policies called "Global Europe".

The past weeks have shown how quickly our neighbourhood can change, and how unstable it can be. The EU needs a strong voice and an ability to coordinate our responses. We have the tools to do this with the EEAS. We now need to use them. But to do this well, we have to fund it properly.

The last and by far smallest heading would be Administration.

II. European Added Value (Better spending of the EU budget)

Dear Senators,

In general I do not like this debate of "net beneficiary versus net contributor". The EU is not a savings bank, if anything it is an investment bank. To continue my analogy, I would say that the European Added Value is the "interest" every member state receives from their investments.

94% of the money going to the EU budget returns to member states. But because of economies of scale every €1 invested can leverage up to € 4 spent. We saw this last year with the € 4 billion invested by the European Commission on energy projects. The actual money spent was close to €22 billion. This is what EU added value is.

The current debate about freezing the future budgets at the 2013 level in nominal terms (a reduction in real terms) is not a viable option if we want to promote a competitive Europe. The current spending level of 1% of GNI is not capable of closing the gap deriving from additional financial needs arising from the Treaty and from agreed policy priorities.

If all the agreed objectives for the EU are to be completed, a minimum increase of 5% is needed compared to the 2013 budget. Such an increase of at least 5% over the 2013 level would mean that the EU budget would be roughly 1.11% of the EU's total GNI. Compared to the 1.06% expected for 2013. In fact, this is not that far away from the Council position.

III. New sources of EU financing (Better raising of money for the EU budget)

Ladies and Gentlemen,

My final remarks are about the need for real own resources for the European Union. I know this is a controversial topic. But at the same time, we can no longer finance the EU budget the way it is currently being financed. Last years debate about the 2011 budget has convinced me that we need to get away from these annual fights.

The resolution of our SURE Committee has called for a convention type meeting of Parliamentarians, both from the EU and national levels to discuss revenue sources of the EU budget. And also on how EU money should be spent.

As a Parliament, we believe that these new own resources should not be generated by increasing taxes. In fact, genuine EU own resources should help in reducing the burden from each member state and makes way for national tax reductions. The current funding system, which relies almost entirely on national contributions, places disproportionate emphasis on net balances between Member States. To me, it contradicts the principle of EU solidarity.

There are many ways of doing this. The European Commission has presented many ideas in its report last year - such as a tax on financial transactions. Such a system would be fairer and more transparent, and it would not affect the size of the budget nor increase the overall tax burden on citizens. These and others are areas we need to explore. We should have this discussion soon so that the MFF takes into account our conclusions.

IV. Summary: No revolution – but evolution

Dear Friends,

What we are discussing today is not a revolution. The EU budget with its just above 1% will never attain the 25% level of federal spending in the United States. But the trend today by certain member states of trying to defend national budgets against common European investments goes in the opposite direction and therefore is to me a false answer. Those common investments benefit us all in the long term. We need a strong European budget if we wish to remain the dynamic continent we are. But in today's financial climate, we need to invest the scarce money better and spend it wisely. I know we can.

Thank you!


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