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Indecisiveness on the EU budget. 135 billion planned for development and investment

Negotiations between EU Council and Parliament on the 2017 budget are underway. Member States tighten their purses, while MEPs and Commission are demanding increased funding to boost growth and employment, to improve the quality of life and tackle issues such as immigration and terrorism

Formal negotiations have just begun, yet the European Parliament and the EU Council of Ministers – the two budget authorities at Community level – are already at arm wrestling. The issue at stake is the EU budget for the year 2017: new funding from national coffers funnelled to Brussels, to be re-invested almost entirely in Member States according to solidarity criteria in projects aimed at economic growth, to improve the quality of life, security, infrastructures and research … Appropriations proposed are set to approximately 135 billion Euros: a huge amount as a whole, yet more contained when considering that the sum will be divided between the 28 Member States, including the United Kingdom despite the Brexit vote.

A “war” on numbers. As always, the budgetary process is initiated by the EU Commission, tasked with submitting a draft general budget at the end of June. For the year 2017 the Executive chaired by Jean-Claude Juncker proposed the appropriation of 158 billion Euros in “commitments” (i.e. the funding that can be agreed in contracts in a given year) and 135 billion Euros in “payments” (available spending over a 12-month period; these are the sums deserving special attention). On its part, past September the EU Council of Ministers reduced the budget proposal – respectively to 156 and 134. In other terms, EU Member Countries – the main contributors to Brussels’ coffers as well as the recipients of EU spending – intend to cut the draft budget by 1-2 million Euros. However, during the plenary meeting of October 26-27 the European Parliament set overall appropriations for 2017 at €161 billion in commitments, 137 in payments. As always, the European Parliament, voicing citizens’ claims, tends to increase the sums arguing that consistent funds are needed for the EU to fulfil its tasks.

Some pay more, others receive more. The budget is presently the object of a political tug of war. EU Parliament and Council have time until November 17 to “reconcile” their respective positions, in order to reach a definitive green light by December – thereby pre-empting a financial standstill. However, the discussion is not confined to common institutions. In fact the positions of individual States weigh on the budget along with their vetoes (threatened by Italy), coupled by attempts to secure consistent amounts at national level. In this case on the one side emerge the so-called “net contributors”, namely those Countries that pay into EU coffers higher sums than those they receive in the form of investments (namely Germany, France and Italy). On the other side figure recipient Countries – as known, a large amount of funds allocated through EU budget are funnelled to Poland, Czech Republic, Slovakia and Hungary – which, violating ratified agreements, refuse to take in refugees and reject resettlement programs, thereby putting the burden of migrant reception on Italy and Greece.

Multiplying effect. If this is the political situation then what is direction followed by Community funding? European Commission Vice-President Kristalina Georgieva, in charge of the budget, said: “The EU is facing massive challenges and in these difficult times a focused and effective EU budget is not a luxury but a necessity. It helps buffer against shocks, providing a boost to our economy and helping to deal with issues like the refugee crisis.” The Commission proposed €74.6 billion in commitments in 2017, compared to €69.8 billion in 2016 for projects aimed at specifically supporting economic growth. This sum, includes, inter alia, over €10.6 billion for research and innovation (under Horizon 2020), €2.0 billion for education under Erasmus+, and €2.5 billion under the Connecting Europe Facility. Support to European farmers is proposed at €42.9 billion. The Draft EU Budget 2017 proposes €5.2 billion to reinforce the external borders of the Union and address the refugee crisis.

It should be remembered that the EU budget amounts to approximately 1% of the 28 EU Member Countries’ GDP,

but thanks to its multiplication effect it can have a big impact. Naturally, recipient States must make a profitable use of the structural funds, and Italy is by no means a shining example.

From the economy to religious historical heritage. Many sectors receive assistance through EU funds: they can help SMEs, support the economy of depressed areas, strengthen civil protection, foster youth training and volunteering, contribute to cultural exchanges. The EU budget provides financial support to urban redevelopment, to the valorisation of historical heritage (including churches, monasteries, routes of the great pilgrimages like the Via Francigena or the Camino de Santiago). Furthermore, EU funds are spent on security and the fight against terrorism, space research, as well as consumer protection. A considerable amount of these funds is used for development cooperation.

A boost to development. German MEP Jens Geier, lead rapporteur of the 2017 Budget at the European Parliament, said on October 26: “the EU is facing an unprecedented number of different challenges. If we are serious about getting to grips with these, then we need a well-funded EU budget. When we first negotiated the MFF for 2014-2020 in 2013, there were far fewer refugees arriving in Europe each year. Now the number is well over a million. We have to recognize that circumstances have changed. We need a comprehensive revision of the MFF and a more ambitious EU budget.” But on same day the EU Council informed the European Parliament that it “cannot accept all its amendments for the 2017 EU budget.” Way above expenditure ceilings, according to the governments of Member countries, particularly in these times of budgetary constraints.

Political skirmishes are just beginning while the budget – unknown to most EU citizens – may be a springboard to help the EU get back on its feet and achieve concrete results to the benefit of all Europeans.

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