MFF: Shaping the future or stuck in the past?

MFF: Shaping the future or stuck in the past?

“Shaping Our Future: Designing the Next Multiannual Financial Framework” was the title of the two-day conference convened by the European Political Strategy Centre, the European Commission’s in‑house think tank. Two representatives of Green Budget Europe also attended the event, which had more than 1000 participants.

In his opening address, Jean-Claude Juncker, President of the European Commission expressed his opinion that first the EU’s objectives must be fixed, and only after that one should discuss the budget, including its size. He strongly opposed reducing cohesion money, because it is needed to reduce the disparities in Europe. He also objected to reducing subsidies to agriculture, because, according to him, that would make the EU dependent on other continents for its food. According to Juncker, more than 1% of the EU GDP should be provided for the EU budget.

The following speaker, Günther H. Oettinger, Commissioner for Budget and Human Resources, also spoke about the necessity of solidarity among member states. The topic is especially timely because the EU budget will lose billions of euros because of Brexit. It is not permitted to have debt or deficit at European level, therefore cuts are inevitable. However, there must be no cuts for the Erasmus programme and for Horizon2020 and its successor, and more money is needed for solving migration issues. Oettinger proposed to consider a tax on plastics.

The next speaker, Sigmar Gabriel, Minister of Foreign Affairs of Germany stressed the importance of combatting tax evasion and creating a fairer taxation policy.

All three speakers spoke in general terms, emphasising the advantages of the EU budget, while keeping complete silence on some of the most pressing problems. In contrast, the next speaker, Jean Pisani-Ferry, Professor of Political Sciences at the Hertie School of Governance in Berlin, did touch upon such problems. He called for strict conditionalities for EU funding: national policies must not go against the EU objectives. He also expressed his doubts whether the present funding system for agriculture is reasonable. His views on conditionalities was strongly supported by Nathalie Loiseau, the French Minister for European Affairs, who said that EU funding can be justified only if the national policy of the member state concerned does not go against the economic, social and environment objectives, and if the rule of law prevails.

Corina Crețu, Commissioner for Regional Policy in the European Commission, i.e. the Commissioner responsible for the EU Structural and Investment Funds, started her speech closing the first day by saying: “Every day we feel the climate change effects. Be it Hurricane Irma in September, or forest fires and floods, Europe is likely to be increasingly impacted by extreme-weather events.” In fact, due to these sentences, she was the one who made the strongest emphasis to the challenges posed by climate change.

The speech of Friedrich Heinemann, Professor of Economics, Centre for European Economic Research (ZEW) in Mannheim, Germany, attracted particular attention. He presented the study How Europe can deliver – Optimising the division of competences among the EU and its member states, which attempted to reply a simple question: Who could do better, the EU or the member states, as far as financing is concerned? The study covered eight key policy areas, and it came to the conclusion that the EU performs better as a whole than single member states in asylum and refugee policy, defence policy (European army), corporate taxation (harmonised tax base), development aid, and unemployment insurance; however, agricultural policy (income protection) as well as post-secondary and tertiary education should be national responsibility; while for railway freight transport it is indifferent whether its financing occurs on EU or national level. Unfortunately, environmental and climate policy was not assessed by the study.

Although the conference did allow to make some insights into the ideas of politicians and experts concerning the Multiannual Financial Framework, the event was a big disappointment for us. It was a disappointment not only because almost nothing was said about climate change and environment in spite of the fact that these areas should be in the forefront of EU financing. It was a disappointment because it conveyed the message that the Commission considers that the Multiannual Financial Framework functions excellently, only some improvements are necessary.

We heard – in most cases mildly worded – criticisms only from a few independent experts. There was no discussion about how it could happen that in quite a number cases the policies of member states run counter to the EU objectives for which it receives EU funding. We did not hear even a word about the widespread corruption and other malfeasances related to EU funding. Neither was there any talk about the fact that EU money is often used very inefficiently as it is in the interest of both DG Regio and the member states to spend as much EU money as quickly as possible without consideration of the real impacts of such spending. We did not receive any explanation why many people consider that EU money causes more harm than good; for example, why does (according to a representative opinion poll) 61 percent of those surveyed in the Czech Republic (a net recipient of EU funds) believe that wealthy member countries should not support poorer ones.

Although according to the conference website “the sessions were interactive and participatory”, in fact, there was practically no opportunity for meaningful discussion with the involvement of the audience. No representative of NGOs or persons strongly critical of the present system of EU financing was invited to hold any presentations.

András Lukács

Lukács is member of the board of Green Budget Europe and president of the Clean Air Action Group, a national association of environmental NGOs in Hungary.

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