S&D Budget Newsletter - February 2017

 
 NEWSLETTER FEBRUARY 2017

 




 

 1. Editorial

FR:

Pour rééquilibrer le financement du budget européen, osons les ressources propres !

Parmi les difficultés auxquelles l’Union européenne est confrontée, la pénurie budgétaire à laquelle elle doit faire face n’est pas des moindres. Financée à 80% par les contributions nationales, elle s’explique par les réticences des Etats membres à abonder le budget européen au détriment de leurs budgets nationaux. Il faut y ajouter l’opacité budgétaire alimentée par de secrètes négociations sur les rabais accordés aux Etats et à l’émergence depuis quelques années d’une myriade d’instruments financiers hors budget, qu’aucune assemblée parlementaire ne contrôle.

Ce système aboutit à une diminution mécanique du budget, à des redéploiements permanents et à une crise des paiements qui s’apparente à un déficit caché. C’est pourquoi il est urgent de revenir à l’esprit des traités et s’atteler à substituer progressivement des ressources propres de l’Union aux contributions nationales.

Telles étaient les conclusions du groupe S&D depuis plusieurs années, et telles sont aujourd’hui les conclusions du groupe Monti dans son rapport rendu le 15 janvier dernier, après 2 années de travail. La proposition d’un bouquet de mesures variées de ressources permettrait de sortir de l’impasse. Dans ce bouquet, certaines propositions sont chères au cœur des socialistes. C’est le cas de la Taxation sur les Transactions Financières, qui aurait de surcroit un impact vertueux en réduisant les risques liés à la spéculation financière, ou d’une taxe carbone aux frontières de l’Union qui, en plus de la ressource elle-même, limiterait le dumping environnemental.

Mais la proposition la plus importante pour le groupe S&D est celle de l’imposition des multinationales. L’idée repose sur la nécessité d’arrêter l’hémorragie fiscale liée à la concurrence fiscale à laquelle se livrent les Etats membres. Elle repose aussi sur une logique de « Fair Tax » puisqu’aujourd’hui les multinationales qui font le plus de profits réussissent à échapper à l’impôt contrairement aux PME et aux citoyens. Cette Corporate Tax viendrait harmoniser la base fiscale des multinationales, dont une partie serait reversée au budget de l’Union.

Déjà conscient du gouffre entre les besoins de financement et la réalité des ressources, le commissaire Oettinger a avancé l’idée de parvenir à 50% de ressources propres pour le prochain Cadre financier pluriannuel. Reste le Conseil à convaincre, les chefs de gouvernement dont il faudrait démasquer le perpétuel double jeu : celui qui consiste à promettre dans leur capitale des économies sur le budget de l’Union, et à annoncer de nouveaux engagements financiers dans les conférences de presse européennes.

Isabelle Thomas
Députée européenne
Vice-Présidente des Socialistes et Démocrates au Parlement européen
en charge du Budget, de la Politique de Cohésion, de l’Agriculture et de la Pêche
Co-Rapporteur sur la révision à mi-parcours du Cadre Financier Pluriannuel 2014-2020



EN:


Let us be bold and use own resources to rebalance the financing of the European budget!

Among the difficulties faced by the European Union, the budget deficit is a major one. Since 80% of the EU’s budget is funded by national contributions, the deficit can be explained with the Member state’s reluctance to increase the European Budget at the expense of their national budgets. On top of that comes a lack of transparency as regards the budget, fueled by secret negotiations on rebates granted to some Member States, as well as the appearance of a plethora of financial instruments, which are off-budget and which are therefore not subject to any parliamentary scrutiny.

This system results in a mechanical decrease of the budget, constant reallocations and a payments crisis, which eventually becomes apparent in a concealed deficit. It is therefore of an utmost importance to refocus on the Treaties and to proceed with gradually replacing the national contributions by the Union’s own resources.

For many years, these have been the S&D Group’s conclusions and they were as well brought forward by the Monti Report, published on 15 January 2017, after two years of intensive works. The proposed package consisting of diverse measures would allow breaking the deadlock. Some of the measures proposed in the package are particularly dear to the hearts of the Socialists and Democrats, for instance the Tax on Financial Transactions, which would have a positive impact by reducing the risks of financial speculation; or a carbon tax at the Union’s borders, which, apart from being an own resource, would also limit environmental dumping.

However, the most important proposal, according to the S&D Group, concerns the taxation of multinational companies. The idea is based on the necessity to end the current tax haemorrhage due to Member states’ tax competition. It is also based on the “Fair Tax“ concept; as multinationals, the ones that make the most profits, still manage to escape taxation, unlike SMEs and ordinary citizens. This Corporate Tax would be based on the establishment and harmonisation of a multinationals’ tax base, from which a part would flow back to the Union’s budget.

Commissioner Oettinger, already aware of the existing abyss between the financing needs and the scarcity of the currently available resources, suggested to reach the goal of 50% of own resources for the next Multiannual Financial Framework (MFF). Now, the last to convince is the Council, the Heads of State and Government, whose permanent double standards have to be unmasked: at home, they promise budgetary savings for the EU’s budget and, at the same time, they announce new financial commitments during European press conferences.

Isabelle Thomas
Member of the European Parliament
Vice President of the Progressive Alliance of Socialists & Democrats in the European Parliament
Responsible for the portfolios: budget, cohesion policy, agriculture and fisheries
Co-rapporteur on the revision of the Multiannual Financial Framework 2014-2020

 

 

2. Contributions from MEPs on key issues:

 

2.1  A European Defence Union - but only with fresh money

EN:

Brexit enticed the national governments to search for new policies that could bring the European Integration forward. During last year’s summit in Bratislava they hence determined the defence policy as a crucial issue, for which a consolidation of the EU is possible without having to change the Treaties.

In times when the US-President Donald Trump is querying the transatlantic Alliance NATO it is judicious that we, Europeans, want to strengthen our cooperation on that matter. Moreover, in times when the public treasury is chronically short of resources it does make sense to search for synergies when it comes to financing the defence expenditure. The study on the “Costs of non-Europe” quantifies the savings that could possibly be achieved with a common defence policy to 26 billion euros.

Therefore, it is justified that a consolidated Defence Union is currently being discussed. At the same time we, as “Guardians of the Budget”, have to consider the value of this project for the EU budget. It may seem appropriate, content-wise, that the EU Commission is allegedly budgeting 500 million euros per year for defence research in the next Multiannual Financial Framework 2020-2027. However, as a member of the Committee on Budgets, I am surprised that so much money is budgeted nonchalantly, while we, members of Parliament, had to fight fiercely during the last negotiations on the Budget 2017 to receive only 50 million euros additionally for Erasmus+, a crucial programme of the EU. 

It is therefore of an utmost importance that we, the Socialists and Democrats, emphasise again and again: a common expenditure for a common defence policy is only possible with additional resources from the national budgets. It would be unacceptable to have to cut funds allocated for civil research in order to be able to fund military research.

The recently adopted opinion on the own-initiative report on the “Constitutional, legal and institutional implications of a common security and defence policy: possibilities offered by the Lisbon Treaty” has shown that the Conservatives, Liberals and Christian-Democrats are not aware of this issue. Therefore, it is all the more important, that we, Socialists and Democrats in the Committee on Budgets, do not give in.

Jens Geier
Member of the European Parliament
Vice-Chair of the Committee on Budgets

 


DE (Original):

Die europäische Verteidigungsunion gibt es nur mit frischen Geldern

Der Brexit hat die nationalen Regierungen dazu verleitet, nach neuen Politiken zu suchen, in denen die Europäische Integration Fortschritte machen könnte. Auf dem Bratislava-Gipfel im vergangenen Jahr haben sie Verteidigungspolitik als ein wichtiges Thema identifiziert, in dem eine Vertiefung möglich ist, ohne die Verträge neu aufzulegen.

In Zeiten, in denen ein US-Präsident Donald Trump das transatlantische Bündnis NATO in Frage stellt, ist es sinnvoll, dass wir Europäer an dieser Stelle enger zusammen arbeiten wollen. Und in Zeiten knapper Staatskassen macht es Sinn, dass wir nach Synergien bei der Finanzierung der Verteidigungsausgaben suchen. Die Studie zu den Kosten von Nicht-Europa quantifiziert die Ersparnisse, die durch eine gemeinsame Verteidigungspolitik möglich wären, auf 26 Milliarden Euro.

Es ist also richtig, wenn jetzt über eine vertiefte Verteidigungsunion diskutiert wird. Gleichzeitig müssen wir als Haushälter auch die Bedeutung dieses Projektes für den EU-Haushalt berücksichtigen. Dass die EU-Kommission angeblich für den nächsten Mehrjährigen Finanzrahmen 2020-2027 bereits 500 Millionen Euro jährlich für Verteidigungsforschung verplant, mag inhaltlich sinnvoll sein. Als Mitglied des Haushaltsausschusses überrascht es mich allerdings, mit welcher Nonchalance hier so viel Geld im Haushaltsrahmen verplant wird, während wir Parlamentarier in den letzten Haushaltsverhandlungen für gerade einmal 50 Millionen Euro zusätzlich für Erasmus+, ein zentrales Programm der EU, erbittert streiten mussten.

Deshalb ist es wichtig, dass wir Sozialisten immer wieder betonen: Gemeinsame Verteidigungsausgaben kann es nur mit zusätzlichen Geldern aus den nationalen Haushalten geben. Es darf nicht sein, dass wir am Ende etwa Gelder für zivile Forschung zugunsten einer Militärforschung kürzen.

Die jüngst verabschiedete Stellungnahme zum Initiativbericht über die „Verfassungsmäßige, rechtliche und institutionelle Auswirkungen einer Gemeinsamen Sicherheitspolitik: Möglichkeiten aufgrund des Vertrags von Lissabon“ hat gezeigt: Konservative, Liberale und Christdemokraten haben diese Problematik nicht erkannt. Umso mehr sind wir Sozialisten im Haushaltsausschuss gefragt, in dieser Frage nicht nachzugeben.

Jens Geier
Member of the European Parliament
Vice-Chair of the Committee on Budgets

 

 

2.2 Simplified EU Budgetary rules

The beneficiaries of the EU funds regularly complain about the complexity and the constant multiplication of applicable rules. This complexity has led to a slower implementation of EU-funded projects, increased expenses and error rates.

Our objectives: simplification of the rules; less administrative burden; orientation towards results; more flexibility regarding the implementation; fewer errors; more transparent rules.

How to achieve this?

1. Simplification for the beneficiaries of the EU funds (automatic payments after fulfillment of set objectives; simplified grants; recognition of volunteer work as a value; faster support schemes for young farmers; simplified reporting...) 

2. Mutual recognition of audits, evaluations and authorizations; harmonized reporting standards

3. Facilitating the combination of grants and financial instruments

4. More effective use of financial instruments (elimination of multiple requirements; single set of rules...) 

5. More flexible budgetary management (multiplication of flexibility instruments; reserves for the emergency aid; creation of the EU crisis reserve; faster payments from the EU Solidarity Fund, Globalization Adaptation Fund...)

6. Simplified and streamlined EU administration

7. Participation of citizens in the creation of the EU budget

 A comprehensive revision of the general financial rules and the related fifteen sectorial EU legislative acts will help to optimize the expenditures as of January 2018 for the second half of the Multi-annual Financial Framework 2014-2020.

Vladimír Maňka
Member of the European Parliament
Shadow Rapporteur on the Proposal of revision of the Financial Regulation and the "Omnibus" package

  

3. Presentation of the final study on Corporate Income Tax as a genuine EU own resource by Prof. Jacques Le Cacheux

On the 7th of February, Jacques Le Cacheux, Professor of Economics at the University of Pau and the Pays de l’Adour, presented his final study on the Corporate Income Tax as a genuine EU own resource during a meeting of the S&D Horizontal Working Group B at the European Parliament in Brussels.

The study points out that nowadays, due to the increasing mobility of capital, multinational firms (MNFs) shift their profits to low tax jurisdictions, while still selling the most of their products in high tax countries. As a consequence, Member States (MSs) have started a fierce tax competition leading to a race to the bottom on statutory corporate tax rates, with the aim of attracting MNFs. The precursors and most notorious representatives of this trend are well-known. Immobile agents, such as small and medium enterprises (SMEs), workers and households, are the indirect victims of this situation, since they are being asked to contribute more in order to compensate the consequent erosion of national tax bases. 

According to a case study based on a 2015 average scenario, tax revenue loss caused by tax avoidance from Apple, Amazon, Fiat and other few MNFs would amount to around 98 billion euro per year in the EU 15. Moreover, the amounts saved by these firms by avoiding taxation are comparable to the contributions to the EU budget of certain MSs, such as the UK, Ireland, the Netherlands and Luxembourg.

In order to resolve the above mentioned problem, Prof. Le Cacheux examines the option of a European tax on MNFs, which would make the European market fairer and more efficient as well as allow the EU to finance new policies. In particular, he would be in favour of introducing a Common Consolidated Corporate Tax Base (CCCTB), based on a taxable amount taking into account the geographical distribution of different factors, such as sales, labour and fixed tangible assets. In 2016 the European Commission launched a new CCCTB proposal, foreseeing a preliminary stage in which the tax base would not be consolidated and exclusively targeting firms with annual turnovers exceeding 750 million euro. The debate concerning the possibility of obtaining consensus among MSs on a European CCCTB is still open.

 

4. Key dates

• 06.03.2017: vote in Budget Committee &14.03.2017: vote in Plenary on
Guidelines for next year's EU Budget 2018

• 30.03.2017: vote in Budget Committee on 
Mobilisation of the European Union Solidarity Fund to provide assistance to the United Kingdom, Cyprus and Portugal

• First week of April: adoption of the
Estimates of the European Parliament for the financial year 2018 (possibly 3/04 in the committee vote and 5 April in the Plenary)


• End of April (24-25/4): vote in Budget Committee on
European Fund for Sustainable Investment (EFSD) - Investment Plan for Africa

• 24-25 April or 15 May (tbc): vote in Budget Committee on
Prolongation of European Fund for Strategic Investments in Europe (EFSI II) and Implementing report on European Fund for  Strategic Investment in Europe (EFSI)

• 11 May:  vote in Budget Committee on
the final Report on the Proposal for a regulation of the European Parliament and of the Council on the financial rules     applicable to the budget of the Union

 

  

5. Recent tweets

  

https://twitter.com/Isabel_thomasEU/status/826407622958006273

  

4:31 am - 31 Jan 2017

  

https://twitter.com/Isabel_thomasEU/status/826408137427132423

  

 

6.  Inside the Committee on Budgets

 

A video from the European Parliament Plenary session in Brussels on 18 January 2017: Isabelle Thomas’s intervention on the imperative to put the Own Resources on the Council’s agenda.

 https://www.youtube.com/watch?v=VFSP5972-_0

 

 

7. Infographic:

EXAMPLE OF ESTIMATED CORPORATE TAX EVASION COMPARED TO THE TOTAL MEMBER STATES’ CONTRIBUTIONS TO THE EU BUDGET