S&D Budget Newsletter - July 2017

S&Ds urge stronger European vision on eurozone budgets, Stability & Growth Pact, eurozone's overall budgetary position for 2016, Draft Budgetary Plans of 15 eurozone member states for 2016, Maria João Rodrigues, Annual Growth Survey

NEWSLETTER July 2017
1. Editorial

Révision du Cadre financier pluriannuel 2014-2020 : on a failli attendre le Conseil !

Enfin ! Après des semaines d’atermoiements, le Conseil a adopté le 20 juin la révision du Cadre financier pluriannuel 2014-2020. Pour rappel, elle avait été initiée par le Parlement en 2016, proposée par la Commission le 14 septembre 2016 et votée par le Parlement le 5 avril dernier.
La démonstration a été faite maintes fois que le cadre budgétaire 2014-2020 est à la fois sous-dimensionné et inadapté aux grands enjeux politiques auxquels est confrontée l’Europe. Ni les phénomènes migratoires, ni le déficit d’investissement, ni le chômage des jeunes, ni les questions de sécurité n’avaient été sérieusement pris en compte dans ce Cadre financier pluriannuel. Bilan ? Des coupes franches sur des budgets aussi essentiels que la recherche ou la jeunesse.
Avec une large majorité du Parlement, nous avons réussi à obtenir cette indispensable révision malgré les réticences du Conseil. Elle porte sur 6 milliards d’euros au total pour la période 2017-2020, dont 3 milliards de flexibilité budgétaire supplémentaire. 1,2 milliard est destiné à la lutte contre le chômage des jeunes.
Désormais, les discussions sur le futur financement de l’Union sont ouvertes, puisqu’il est prévu dans l’article 25 du règlement du CFP 2014-2020 que la Commission européenne fasse une proposition aux législateurs avant le 1er janvier 2018.
Sans attendre, le Parlement va fixer ses objectifs et ses priorités budgétaires dans un rapport d’initiative qui devrait être voté début 2018. Nous voulons un budget adapté aux priorités, dimensionné à la hauteur des objectifs avec un plafond supérieur à 1%, et une réforme du système des ressources propres de l’Union pour alléger les Etats membres d’une partie substantielle de leur contribution et sortir de la logique du « juste retour ».
Quant à la question du Brexit, l’obtention de la révision du CFP 2014-2020 a montré que les négociations de sortie du Royaume-Uni ne constituaient pas un obstacle pour que l’Union avance sur le plan budgétaire. Mais l’heure de vérité approche, car désormais chacun devra montrer son vrai visage sans pouvoir se réfugier derrière le véto britannique.


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-rapporteure sur la révision du Cadre financier pluriannuel 2014-2020


EN translation:

Mid-term revision of the Multiannual Financial Framework 2014-2020: At last the Council moved!

Finally! After weeklong delays, on 20 June the Council finally adopted the mid-term revision of the Multiannual Financial Framework (MFF) 2014-2020. As a reminder: the mid-term revision had been initiated by the European Parliament in 2016, proposed by the Commission on 14 September 2016 and voted by the Parliament on 5 April this year.
It had been proven again and again that the Financial Framework 2014-2020 is not only underfunded but also ill-adapted to the enormous political challenges that Europe is facing. This Multiannual Financial Framework had neither genuinely taken into account migration issues, nor the funding deficit, nor the youth unemployment, nor security matters. And the result? Significant cuts for key budgets, such as research and youth policy.
We have managed to obtain this crucial revision with the support of a majority of the Parliament and despite the Council’s reluctance. The mid-term revision encompasses a total of EUR 6 billion for 2017-2020, of which EUR 3 billion for an additional budgetary flexibility. EUR 1.2 billion are earmarked for the fight against youth unemployment.
As of now, discussions are starting on the future financing of the European Union, as, according to article 25 of the MFF-regulation, the European Commission has to present its proposal to the legislators before 1 January 2018.
The Parliament will proceed without delay and will set its objectives and budgetary priorities in an own-initiative report, which should be voted at the beginning of 2018. We request a budget that matches the priorities, keeps up with the challenges and has a ceiling beyond 1%.  Moreover, we demand a reform of the Union’s own resources system, allowing Member states to ease a considerable amount of their contributions and to abandon the “juste retour” narrative.
The fact that we obtained the MFF mid-term revision 2014-2020 has shown, with respect to the Brexit-issue, that the negotiations about the withdrawal of the UK from the EU do not represent an impediment for the EU to make progress in budgetary matters. But the moment of truth is approaching, as all players will henceforth have to show their true colours and will not be able to hide behind the British veto.


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 The European Parliament demands additional 1.5 billion Euro from the British government

During the July plenary session, the European Parliament voted on the second amending budget 2017. Normally, this amending budget is no big deal. As in the past years, the European Commission presented the amending budget in 2017 in order to carry over the surplus from 2016. During the past years this surplus ranged between 1 and 1.5 billion Euro.
However, the newly adopted amending budget 2/2017 is much more sensitive, as the Commission explains the magnitude of the financial harm that was caused already in 2016 by the Brexit-referendum and the thus incurred decline of the pound sterling. The loss incurred amounts to 1.5 billion Euro, which is due to the fact that the United Kingdom pays its contribution to the EU budget monthly in pound sterling with an exchange rate that is fixed beforehand. The referendum triggered a decline of the pound, which in turn means that the British government’s payments, when converted to EUR, are significantly lower than initially expected.
The only reason why the EU did not run into financial difficulties is due to the fact that the Member states have, at the same time, implemented significantly less funds in the regional policy and that the EU collected an outstandingly high amount of financial penalties. However, this does not mean that all problems have been solved. It is truly questionable why the European tax payers have to pay for the “Brexit gap”, since the burnt funds could have been used for meaningful EU projects. 1.5 billion Euro - this is more than what the EU Parliament obtained during the negotiations on the MFF mid-term revision for the Youth Employment Initiative until the end of 2020.
The EU Commission and the Member states seem to favour a discreet solution. “Things could have been worse” they say. However, I think that the governing principle - also for this case - should be: the British government has to bear all costs incurred by Brexit. I am therefore glad that the European Parliament supported my demand to take these 1.5 billion Euro into account during the Brexit-negotiations.

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

Deutsche Original-Fassung:

Europäisches Parlament fordert zusätzlich 1,5 Milliarden Euro von der britischen Regierung

In der Plenarwoche im Juli hat das Europäische Parlament über den zweiten Nachtragshaushalt 2017 abgestimmt. Eigentlich ist dieser Nachtragshaushalt keine große Sache. Wie in jedem Jahr hat auch in 2017 die Kommission den Nachtragshaushalt vorgelegt, um den Überschuss aus dem Jahr 2016 zu übertragen. In den letzten Jahren lag dieser Überschuss jeweils zwischen 1 und 1,5 Milliarden Euro.
Doch der nun verabschiedete Nachtragshaushalt 2/2017 ist deutlich brisanter. Denn die Kommission erklärt hier, wie viel Schaden das Brexit-Referendum und der dadurch entstandene Pfundverfall bereits im Jahr 2016 angerichtet hat, nämlich etwa 1,5 Milliarden Euro. Grund dafür ist, dass Großbritannien seinen Beitrag zum EU-Haushalt monatlich in Pfund überweist, zu einem vorher festgelegten Wechselkurs.
Durch den Pfundverfall im Zuge des Referendums sind die Überweisungen - umgerechnet in Euro - deutlich kleiner ausgefallen als vorher erwartetDie EU ist nur deshalb nicht in eine finanzielle Schieflage geraten, weil die Mitgliedstaaten gleichzeitig deutlich weniger Geld in der Regionalpolitik implementiert haben und die EU überdurchschnittlich viele Strafen verbuchen konnte. Das heißt aber nicht, dass damit alle Probleme aus der Welt wären. Es ist doch problematisch, wenn jetzt der europäische Steuerzahler für das Brexit-Loch aufkommt. Schließlich hätte das verbrannte Geld auch für sinnvolle EU-Projekte eingesetzt werden können. 1,5 Milliarden Euro - das sind mehr, als das Europäische Parlament bei den Verhandlungen zur MFR-Revision für die Jugendbeschäftigungsinitiative bis Ende 2020 erzielen konnte.
Europäische Kommission und die Mitgliedstaaten scheinen eine leise Lösung zu bevorzugen. Ist ja alles gut gegangen, sagen sie. Ich finde aber, dass auch in diesem Fall der Grundsatz lauten muss: Die britische Regierung zahlt alle Kosten, die der Brexit aufwirft. Deswegen freue ich mich, dass das Parlament mich in meiner Forderung folgt, diese 1,5 Milliarden in den Verhandlungen zum Austritt der Briten zu berücksichtigen.

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

2.2   European Parliament Budget 2018

It has been a real pleasure to work as the S&D Shadow Rapporteur for the EP Budget 2018. After 7 years away from the EP, I really missed this collective work we all do with the best interest of the European project in mind.
The EP is starting the debate on the post-2020 MFF and the reform of the Own Resources system. This discussion is enhanced by the fact that the EU is now facing Brexit and is, itself, in a reflexion process about its future.
My involvement in this file has been framed by 3 principles.
The full transparency of the EP Budget vis-à-vis the European constituents is a real need in order to show the citizens more effectively what the Parliament does and how it disburses the funds.
The principle of efficiency, in the sense that we have to use the taxpayers’ money in the most efficient way possible. That is why I supported some cuts to the EP Budget mainly in some constantly over-inflated lines, in order to reach a reasonable proposal of a 2.4% increase
reflecting extraordinary circumstances.
The third and final principal is the fight against demagogy. The European Parliament’s work efficiency can always be optimized and improved, but the worst thing we can do is to cut expenses just for the sake of cutting, succumbing to the pressure of populists and euro-sceptics. If the EP takes an ultra-defensive approach towards its spending and its critics we would have a much worse budget and we would be betraying the mandate that was given to us by our constituents.

Manuel DOS SANTOS
Member of the European Parliament
Shadow Rapporteur on the Budget 2018 Other Sections

3. Workshop with Socialist and Social Democrat members of national parliaments on the future financing of the EU budget on 28 June 2017, European Parliament in Brussels

On the 28th of June the S&D MEPs met with Socialist and Social Democrat national parliamentarians from different EU Member States at the European Parliament in Brussels, with the aim of discussing the future financing of the EU budget and its upcoming challenges during a workshop.
In the first panel, starting in the early afternoon, Isabelle Thomas, S&D Vice-President on Budget, Cohesion Policy, Agriculture and Fisheries, highlighted the need to have a better resourced and more flexible Multiannual Financial Framework (MFF) in order to tackle the current challenges the EU is facing, including economic crisis and migration. In this context, the preparation of the post-2020 MFF should be seen as a critical step to implement this change.
During the second panel, Eider Gardiazabal Rubial, S&D Coordinator in the Committee on Budget, and Daniele Viotti, S&D Shadow Rapporteur on Own Resources, discussed the reform of the system of Own Resources with the aim of providing the EU budget with additional and independent sources of income. Among other proposals, the possibility to implement a Common Consolidated Corporate Tax Base (CCCTB) was explored with a view to tax multinational companies, although a very high degree of resistance against this initiative is expected to come from some Member States within Council.
After the workshop, the S&D MEPs and national parliamentarians joined an extraordinary meeting of the Committee on Budgets, where Günther Oettinger, Commissioner for Budget and Human Resources, presented the reflection paper on “The Future of EU Finances”. This document aims at introducing five possible scenarios concerning the future budget of the EU 27 following Brexit, with the aim of stimulating further debate after the presentation of the Commission White Paper on “The Future of Europe”. On the basis of these proposals, President Juncker will deliver his State of the Union speech in September 2017 and the Commission will present its strategy for the next MFF in mid-2018. In addition, during the meeting, the concept of multi-speed Europe was examined and discussed between the different political groups.
In the evening, the S&D MEPs and their guests from national parliaments had the opportunity to network during a cocktail hosted by the S&D Group.
The S&D Group is planning to host a similar event next year in order to foster debate between the S&D MEPs and their counterparts in the EU national parliaments on key political issues as well as strengthen the unity of our political group both at European and national level.

4. Key dates

24 July - 18 August - summer recess
31 August
– presentation of Working Document on Council position in BUDG Committee
28 September
–BUDG Committee vote on budgetary amendments

5. Recent tweets

https://twitter.com/EGardiazabal/status/882918187263827968

https://twitter.com/Isabel_thomasEU/status/882282811943780353


6.  Inside the Committee on Budgets

Isabelle Thomas’ speech during the July Plenary session, debate on the future financing of the European Union, 4 July 2017

https://www.youtube.com/watch?v=qvwa4GHuxNc


7. Infographic:

Information on the European Fund for Sustainable Development (EFSD)