Speech at MFF conference organised by the Bulgarian Presidency (09.03.18) - Main contents
In less than two months (2 may 2018), we will propose the new long term EU Budget termed Multi-Annual Financial Framework (MFF). In this speech, I draw three lessons from the vivid debates I had with politicians, experts and citizens so far.
This conference is a turning point in the preparatory process of the next MFF thanks to its timely planning just halfway between our kick-off conference in Brussels early January and the adoption of our proposal on the 2nd of May.
So let me warmly thank the Bulgarian Presidency for this timely initiative and for your efforts to draw high-level participants from different walks across the EU 27.
Since we launched the White paper process last year, the MFF has increasingly made its way in the Leaders' agenda, in the EP's reflection and in an increasing number of meetings, conferences, studies or missions.
I myself discussed the matter during many country visits which I will continue to carry out until the very end of April to feel the pulse on the ground.
Together with other members of the College, we have engaged with the European Parliament and with tens of stakeholders notably during citizens' dialogues.
I draw three lessons from these vivid exchanges of views: first, there is now a growing awareness of the complexity of this exercise with new priorities, modernisation of existing policies and Brexit gap clearly shaping a new landscape. Second, almost all preliminary positions have now been made clear and this is very helpful: all Member States, the European Parliament next week and all stakeholders in the public consultation that ended yesterday. Third, we are slowly getting past the pointless discussions on net balances to shed more light on challenges lying ahead in better awareness of the price attached.
Converging lines and more difficult issues
At this stage of the preparation process, I will refrain from repeating what you all very well know on the context so let me touch on four key observations: two elements where I have witnessed increasing convergence over the past weeks and two other points where tensions are noticeable.
Firstly, the discussion among leaders, which was less abrasive that some expected, showed that there is broad consensus on the need to make room for new priorities such as security, defence, innovation, migration or youth mobility. This is already a first positive indication even though the level of ambition is still to be set.
Just one example from our recent Communication which just sets options for reflection (and does not pre-empt our future proposal): many governments and also many Members of the European Parliament call for stronger protection of our common external borders. Imagine that we were to decide on a full EU border management system, comparable to the US and Canadian system. It would need 100,000 staff and would require around EUR 150 billion over a period of seven years.
This leads me to my second note of optimism. I have heard many Member States expressing openness to a reasonable increase of their contributions in relation to these new priorities. Inevitably there are some dissenting voices calling for a smaller budget for a smaller Europe … which then means a smaller political ambition and cuts to significant chunks of existing policies.
Which brings me to the first area of possible tension: the modernisation of CAP and Cohesion.
Investing in new priorities and closing the Brexit gap will require a careful blend of new resources and redeployment. Redeployment will necessarily translate into savings in both areas on a pragmatic basis: no blind cuts but a critical review of both frameworks. Are we supporting the right priorities? Have we not scattered our efforts over too many objectives over time? Do we aim at the right beneficiaries, those who really need EU support?
Let me refer to one example which is common to both policies: should we continue to support large entities (large farms in the agricultural sector, large companies under cohesion) without questioning the real impact of our financial support?
Ladies and gentlemen, there is room for more focus on EU added value, on simplification and this can generate real savings.
The second area where I note less converging views is conditionality. This is an existing feature which has proven its relevance and which is based on the common understanding that the potential of the EU budget can only be fully unleashed if the economic, regulatory and administrative environment in the Member States is supportive.
In the future, we have to closer tie EU support to reform efforts in the frame of the Semester. But framework conditions go beyond economic and social conditions and also concern the rule of law which is a basic key factor of success to enable investment in the future…and the EU budget is precisely an investment budget.
I have shared with you in a very transparent manner first reflections because I want you to get prepared for choices however difficult they may be. But clear choices do not rule out flexibility quite the opposite: flexibility in the way new priorities will phase in, flexibility on how to phase out some current interventions but also flexibility to face unforeseen events.
Just as modern labour markets, our MFF also needs its own flexicurity: flexibility to adjust to shocks, security to implement our priorities … including the negative ones.
Call for a swift and comprehensive deal
If you ask me what is the best MFF, I would say that it certainly is one that would be quickly agreed.
What would be the value of the positive political agenda outlined in Bratislava and Rome if we take twenty months to agree on its most visible deliverable?
We all know how difficult it is to reach a final agreement whenever money is at stake.
Because the current Multiannual Financial Framework was decided only at the very end of 2013, the programmes that put it into effect could only be established during 2014, which meant the first year was "lost" as far as actually getting money out into the real world.
Delays this time round would cost 5,000 research jobs for every single month that we do not agree. It would cost up to 1,000,000 Erasmus places in 2021 alone. And it would jeopardise crucial infrastructure projects like the Baltic Railway.
Not only do we need a swift decision before the European Parliament elections but we must have a comprehensive deal that covers both what the EU budget should be used for but also how it will be financed in the future with new own resources that forge an even more direct link to Union policies.
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