September 27, 2017
Brussels, 27th September 2017. – The Future of EU Finances has been taking shape in front of our eyes. After carefully listening to what was officially presented on behalf of the Commission about the Future of EU Finances, I tried to identify 6 guiding principles which I think will shape and shake the post 2020 EU budget negotiations.
1.) The EU budget will either shrink or will remain at the same level: we can expect no increase
We have to be clear about our scope for action concerning the tough budget negotiations ahead of us. Former Finnish Prime Minister Alexander Stubb brought some realism into the budget discussions when he stated that the most predictable move of national governments to deal with the budget hole Brexit will bring in is that each Member State will aim to progressively reduce its contributions, as a starting point, which would mean a shrinking EU budget. This can be changed, either by identifying more own EU resources or by increasing the contributions of remaining States but it will not be an easy ride. This practically means that the cake is much-much smaller we all would like to have our bit from.
2.) Blame the EU for your faults, claim the EU successes as yours
This is a no brainer: due to the nature of politics, there are and will be always countries playing that game. The recent example of Hungary which launched a major campaign called ‘Let’s stop Brussels!’, harrasses NGOs considered as foreign agents and takes a hard position on ‘Migration’ clearly demonstrates that. It is strange that Member States can still hide behind the word ‘Brussels’ (‘All bad things are coming from Brussels’) forgetting that the most powerful EU institutions are the European Council, composed of Heads of State and Government (meaning physically themselves) and the Council of the EU, made of governmental representatives. As most of the decisions were made by unanimity and consensus, it would be high time to get away from this old narrative.
The Future of EU finances
There are things in which the Commission has experience and organising massive conferences with many participants is definitely one of them. This was the case with ‘The Future of EU finances’ flagship event which gathered more than 500 participants, included three Commissioners and two former Prime Ministers which was about to promote the EU vision for the Future of EU finances. Among the many stakeholders, progressive civil society representatives were there highlighting the need for the EU budget to contribute to achieve the sustainable development goals, environmental, social NGOs as well as health stakeholders, including me.
3.) The EU budget has limited leverage and is only complementary to national actions
Overestimation and too high expectations will lead to failure and frustration. The EU is not a Federal State and it simply does not have the financial, redistribution power to solve the issues in Europe.
‘The gap between the expectations of EU citizens and what the EU does was never bigger than today’
Former Italian Prime Minister and Commissioner Mario Monti
As you can see above, the whole EU annual Budget in 2016 was only 1% of the EU-28 Gross National Income and 2 % of the EU-28 Member States Public Expenditure. It is still and will be an additional, complementary tool to Member States’ actions.
Do not get me wrong! I am not saying that the Common Agriculture Policy (CAP) will be significantly reduced in the post 2020 EU budget period. That would be the ideal case but it will face strong opposition of key member states having a significant Agricultural sector and from farmers and cooperatives themselves. But it is fair to say that it is visible that the trends are changing and if Europe would like to claim its leadership role at the Global scene, it has to adapt itself to the emerging trends of the 4th industrial revolution as well as tackle key challenges it faces: many security issues and migration. So soon or later, an EU compromise should reflect these tendencies.
5.) Cohesion will remain but in a reshaped form
The EU budget is not only about pure income distribution but about values and public goods.
‘We need a budget to achieve our aims. The budget for us is therefore not an accounting tool, but a means to achieve our political goals.’
President of the European Commission
At the conference ‘EU budget focused on results’,
Brussels, 22 September 2015
Reducing existing, territorial inequalities is a Treaty aim and it remains still valid. This is a core value of the European projects which legitimates many actions, including reinforcing the internal market. It is also a common place that the current cohesion policy as such did not achieve the intended goals as inequalities still persist and in some cases they even increased. So in order to meet citizens’ expectations, there is a need for spending on cohesion but in a much better way which should ensure increased integration and reduced social differences among Member States.
6.) Health, as a value and public good, should be maintained in the EU budget
Health is a good example of a value the EU should keep in terms of financial commitments in the EU budget.
First let’s make a distinction between healthcare and health prevention and protection at EU level.
Healthcare systems are managed at national level and by using the Social and Structural funds, Member States can use EU money to help to reform and make sustainable their national healthcare systems.
Health prevention and protection at EU level means mainly policy action, in some cases in other sectors (environment, trade, Roma integration, social policies etc.). Health policy in the budget means the ‘Health programme’ which mainly means health prevention and protection. Security is one of the new priorities of the EU budget and it has its health aspects: there are common health security challenges which cannot be tackled efficiently at national level and which need coordinated, EU responses due their cross-border nature.
— Zoltán MassayKosubek (@EU_ZMK) 2017. szeptember 25.
Cross border health security challenges include pandemics like the H1N1, threats like the measles outbreak in Romania which would need efficient vaccination programme, the growing danger of drug-resistant bacteria (antimicrobial resistance), the obesity epidemic which is closely linked to the Chronic Disease burden all EU member states are facing, just to name the most relevant ones. Without allocating appropriate level of EU resources, these challenges can suffocate economic growth and undermine the European project.
Conclusions – Business as usual is not an option anymore: the EU budget has to change
Corina Cretu, Member of the European Commission responsible for Regional Policy framed it clearly by stating that the EU lost the trust of its citizens, which is terribly true. This mistrust is confirmed by the recent referendum on Brexit and the outcomes of many elections, showing the raise of extremist parties. If the EU project is about to regain the faith of EU citizens, significant changes are needed.
Read also a blog post ‘Will the next EU budget fund Welcoming Europe or Fortress Europe?’ about the conference by Annica Ryngbeck, working for the Social Platform.Zoltán Massay-Kosubek