Flexibility is not only reshuffling existing meagre funds — it's having the courage to mobilise real additional money, like taxing super-rich individuals or an EU Financial Transaction Tax (Photo: snorski)
With the social-economic consequences of the Covid-19 pandemic and the Russian invasion of Ukraine, the 2021-27 Multi-annual Financial Framework (MFF), the motorhouse behind the actions of the European Union, finds itself in a perfect storm.
If we imagine the negotiations of every annual EU budget like a plane in distress in a perfect storm, the EU budget for next year is no exception. Where will we end up in 2024?
The European Commission says circumstances are difficult, but everything can be kept under control. The commission even asserts there have been no cuts in programmes in the proposal they made for next year’s annual budget.
While this is true, reality is a bit more nuanced and, as we know, the devil is in the details.
And for now it is clear that the EU’s multi-annual budget — the MFF — is stretched to its limits.
Firstly, inflation is high and our spending cannot catch up with its pace.
Secondly, our annual margins are almost exhausted. In other words, our budget has no room or space for manoeuvre to reinforce programmes or respond to unforeseen needs. Nobody expected the Covid-19 pandemic, few were able to predict president Valdimir Putin would invade Ukraine, or the subsequent consequences that followed.
In this sense, it is not prudent to propose a draft EU budget that does not take into account unforeseen events that could happen in 2024.
Thirdly, humanitarian needs and a war at our borders make it obvious that the EU has to step up and provide support within and outside our Union, including for accession countries.
A look at ‘heading 6’ of the draft budget as proposed by the commission — which covers our programme for funding external actions — makes it clear there are no margins left. What type of geopolitical role does the EU want to play if we don’t have the sufficient financial means to act globally and within our neighbourhood?
Three simple steps
And so, what do we want in order for the EU plane to be stable? If the final destination is the well-being of our citizens and economy, as well as a positive international environment, then the EU budget 2024 should deliver on the following:
Firstly, we are in a cost-of-living crisis brought on by high inflation and an on-going recession. Any budgetary solution at the expense of people and small businesses would have disastrous consequences for them. We therefore need to ensure that fresh funds are allocated where they can make a difference to our people and businesses.
Secondly, we have to make sure there is continuous funding for the green transition and energy efficiency, as well as funding measures aimed at re-industrialisation.
Thirdly, we have to safeguard our role as a global actor. This means increased support to Ukraine for its recovery as well to our neighbours in south-east Europe, the Mediterranean basin and the Eastern Partnership. This support has to include a comprehensive migration strategy based on EU values.
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And, let’s not forget: to be able to finance joint actions, we need new resources. Flexibility is not only reshuffling existing meagre funds: it’s, above all, having the courage to decide to go further in joint actions by mobilising real additional money, like taxing super-rich individuals or an EU Financial Transaction Tax.
Without fuel from old and new resources, our plane will go nowhere, let alone weather the storm.
Member states are unanimous in saying the needs are bigger compared to just three years ago. Yet, their contribution to the EU budget has dropped and when it comes to the Gross National Income-based contributions, the decrease is of up to 22 percent. How are we supposed to do more with less?
Next year’s budget will focus on issues of primary importance to Europeans, such as energy, migration, security and defence.
Our call is not just to address these issues, but to do so smartly. One such way is by ensuring that flagship programmes continue to be properly funded; such as, for example, the Erasmus+ programme for youth exchanges in education. If things don’t change, it will be getting less funding in 2024 than what the EU will be paying in interest rates.
This is why it is imperative to have a genuine and profound revision of the current Multiannual Financial Framework valid until 2027.
If the governments in the member states don’t put a genuine effort into this revision; if the other political groups in the European Parliament are not at the height of peoples’ expectations, then the Union’s plane is in real danger of distress in the perfect storm we are weathering.
Source: euobserver.com
