A pact for growth

Rigour and transparency, though without renouncing the necessary means to revive the economies of the EU: these are the guiding principles under which the European Commission presented its proposals for the multiannual financial framework 2014-2020 on 29 June. The budget proposal now passes to the scrutiny of the other two EU budgetary authorities, the European Parliament and Council. Reiterating the need for member states to maintain their budgets under tight control, especially in a phase like the present one of austerity, the Executive subjects to control all items of expenditure and proposes to create new revenue streams and insert some of its “own resources”, in other words direct procedures for funding the coffers of Brussels, limiting in this way transfers from member states.Principle of solidarity. “The principle of solidarity is at the centre of our proposal – commented Commission President José Manuel Barroso, on presenting the multiannual financial framework proposal -. Solidarity with member states and regions. Solidarity in the management of various common challenges, including immigration. Solidarity in terms of energy security. Lastly, solidarity with the peoples of the poorest countries”. Just published, the document of the Commission (“Reforming the budget, changing Europe”) has aroused debate both in the European institutions and at the level of the member states. This is also because in this phase the Executive seems to be responding positively to the requests of the European Parliament, forging a kind of “virtuous pact” to promote the growth of Europe. It is no accident that in recent days the EP in Strasbourg had sent out two clear messages: the Union has a need for financial resources to be able to achieve its policies and fund programmes that have already been begun, so the budget cannot be reduced over the next few years; moreover the common budget should be supported with the EU’s “own resources”, thus progressively decoupling the action of the EU from national transfers. In this sense there is renewed discussion of the viability of European VAT and a tax on financial transactions (“Tobin tax”). Today and tomorrow. The Commission insists: “The EU budget is modest” (c.1% of the GDP of the 27) “but has a direct impact on the life of citizens”. So the proposal for the multiannual financial framework until 2020 “responds to the concerns of today and the needs of tomorrow. It is focused on priority financings that produce real value added”. The total budget for the next seven years has been established at 1.025 billion euro in commitments and 972.2 billion in payment credits: apart from this specific dual valuation, it is in substance a budget of one billion euro, i.e. 140 million per year, exactly as in 2011, and (as we said) roughly 1% of European GDP. The Commissioner for the Budget, Janusz Lewandowski, commented: “The proposal is ambitious but realistic”. Priority has been assigned “to cross-border infrastructures, both in the field of transport and energy”, “to research and development, to education and culture, to the security of the external frontiers and to support for the neighbouring countries of the Mediterranean and Eastern Europe”. Lewandowski said he was satisfied by the work performed and now awaits an open debate between Council and MEPs.The chapters, the figures. The financial framework for 2014-2020, made obligatory by the Lisbon Treaty, was preceded by other frameworks for the years 2000-2006 and 2007-2013 (the latter still operational). It is an important instrument, because it permits implementing medium-term policies and projects with the certainty, or almost, that they will be funded. As for the annual budget, the multiannual framework can be divided into major chapters. The first, and the largest, regards territorial and regional cohesion, growth and jobs. In this case a new fund is proposed; it will be called “Connecting Europe Facility” and be endowed with overall funding for 50 billion, concentrated on road connection projects, energy networks, information technology; everything, in short, that can bring territories, peoples and businesses “closer together”, reinforce the single market and boost economic development. The major slice of the funds, for a total of 376 billion, will be allocated to territorial cohesion.Own resources. The other chapters in the multiannual financial framework concern: agriculture and rural development (371 billion), with funds frozen at current levels; security (both in policing the frontiers, fighting crime and controlling immigration, and in the environmental and climate change field); the presence of the EU on the world stage (foreign policy); and administrative costs (they too frozen at present levels, equivalent to 5.7% of the budget). These are followed by guidelines on the EU’s “own resources”, with a European tax on value added and on international financial operations. An authoritative comment on the proposed budget has come from the European Parliament: its President Jerzy Buzek declares that “the Commission’s proposal on the long-term budget for the EU is an intelligent starting point for negotiations”.