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EU politicians should lead EU budget talks, not technocrats

Europe’s political leadership should be the one to take the lead in consultations and the responsibility to speed up individual political decisions on which technocrats will be called upon to adapt financial tools for their achievement

By: EBR - Posted: Wednesday, August 02, 2017

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The need to strengthen EU integration policy, focusing on the areas of security and defense, in a fragile international environment shaped by volatile political relations and unpredictable behaviors (particularly in the Aegean sea and the wider East Mediterranean area), the refugee and migration crisis and deadly terrorist attacks in Europe. The financial and economic immunization of Europe against the effects of Brexit, while creating conditions for long-term sustainable growth to ultimately overcome the consequences of the economic crisis.

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by Stavros Kalafatis*

The debate on the review of the EU budget has long started both at Brussels and Member State level, following the presentation of a “Reflection Paper” signed by Commissioner for Budget Gunther Oettinger, which was recently presented in the Greek Parliament as well.

I am not sure whether citizens are aware how rather small the EU budget is, accounting for 1% of the combined Gross National Income of Member States. This essentially means that for every 100 euros earned by a European citizen, 50 Euros go on contributions and taxes, of which only 1 euro ends in the EU budget to finance a wide range of policies that go far beyond national borders.

It’s the first time the consultation on the EU budget is being carried out this widely as its drafting is called upon to serve three important parallel objectives:

Adaptation to the different scenarios of the White Paper and Juncker’s proposals for a Europe with a stronger social direction in its development policies and special emphasis on employment, youth, innovation and solidarity and competitiveness.

The need to strengthen EU integration policy, focusing on the areas of security and defense, in a fragile international environment shaped by volatile political relations and unpredictable behaviors (particularly in the Aegean sea and the wider East Mediterranean area), the refugee and migration crisis and deadly terrorist attacks in Europe.
The financial and economic immunization of Europe against the effects of Brexit, while creating conditions for long-term sustainable growth to ultimately overcome the consequences of the economic crisis.

From the beginning, this consultation has been sending out positive signals, but at the same time, there are certain traps that we have to recognize and avoid.

A strong positive signal is a clear intention of adjusting the European budget to the White Paper, which emphatically responds to the criticisms often made to the EU for delaying to move from theory to action.

In my opinion, “translating” the White Paper into actual policies will be the most important vehicle for restoring the confidence of European citizens to the European project and strengthening social cohesion.

It will also mark the end of populism and Euroscepticism, which keep pushing for a return to a nationalistic past.

But the above-mentioned points are not the only positive ones in the reflection paper.

It promotes the need to maintain and/or increase the budget, through the use of every fund available, which can help integrate new policies with ongoing actions.
It recognizes certain countries are lagging behind making a clear reference to the need to eliminate imbalances within the EU, which is in line with cohesion objectives set out in the White Paper.

It acknowledges the heterogeneous nature of managing important common issues, like the migration crisis, that place specific countries – such as Greece – at the forefront of the crisis and highlights the need for stronger support to these countries.

But there are also traps:

The most alarming one is the risk of significant “setbacks” from the philosophy of the White Paper, under the burden of a purely technocratic and strictly budgetary approach to future actions.

We must not forget that the “Reflection Paper”, which is the reference point for the ongoing consultation, is based on the report “Future Financing of the EU” drafted and submitted by an excellent working group chaired by Mario Monti and the participation of Pierre Moscovici, Franz Timmersmann and Guy Verhofstadt in January 2017, three months before the White Paper was presented.

The objectives of the Monti report are inspired by the term ‘European added value’, a political term that is in line with the axes of the White Paper and with two of the three European budget targets I mentioned in the beginning of the article.

However, I noticed that the “Reflection Paper on the Future of EU Finances”, which followed Juncker’s White Paper, is inspired by the stricter budgetary term “added value” in a way that risks disconnecting the European budget’s economic demands from significant political issues in the White Paper.

Another concern is the management of the refugee and migration crisis, as well as the very important for Greece objective of common security and defense policy (given the often unexpected behavior of Turkey) served by the new European Defense Fund. These targets seem to rather be pursued by reducing and redeploying existing funds in a strict framework of fiscal balance, which is still far from the philosophy of the White Paper.

Furthermore, in individual approaches to the “Reflection Paper”, we see the issue of ‘solidarity’ appearing inextricably linked to the condition of ‘sustainability’, ‘rural policy’ being separated from the general ‘agricultural policy’ by new adjustments, mainly for the South, or ‘Cohesion Policy’ linked to intentions of increasing national contributions.

In my view, all these results from the fact that EU technocrats are rushing with good intentions, but without the necessary political background, to draft a financial map of policy objectives without first clarifying the individual policies to achieve the objectives.

Starting with the employment objective, the European budget needs to become more “productive”. To contribute in its refinancing – through the production of wealth – and the creative use of financial tools and mechanisms so that it does not trap itself in mere redistribution of funds.

In a nutshell, the budget needs to act as means and not an end.

Rather than setting up first a perhaps stifling financial framework which politicians will have to adapt their decisions on, Europe’s political leadership should be the one to take the lead of the consultation and the responsibility to speed up individual political decisions on which the technocrats will be called upon to adapt financial tools for their achievement.

*Stavros Kalafatis is a Greek lawmaker with the main opposition right-wing New Democracy Party. He is responsible for EU affairs.
**First published in EurActiv.com

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