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28th Mar 2024

MEPs wary of Barroso's 'project bond' proposal

  • The money raised by issuing EU 'project bonds' would go towards updating the bloc's infrastructure (Photo: EUobserver)

Key MEPs in the debate on the EU's future multi-annual budget have poured cold water on commission plans for an EU 'project bond'.

Commission President Jose Manuel Barroso raised the issue during his 'State of the Union' speech in Strasbourg last week, describing how the creation of such a bond could be used to finance new European infrastructure projects.

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But euro deputies from a newly created committee on the future of the multi-annual budget have questioned the scheme's merits.

"For me, it's a real change to enter into the world of EU debt," said Socialist MEP Jutta Haug on Tuesday (14 September) at a press briefing session. "I think to have bonds we would need to change the EU treaty," added the German deputy and chair of the parliamentary committee.

Centre-right MEP Salvador Garriga Polledo, who will produce parliament's report on the shape of the EU's future budget (2014-2020), also queried the timing of Mr Barroso's suggestion.

"Bringing in a controversial issue like debt is a distraction. It will be hard enough to reach a consensus as it is," said the Spanish deputy, also speaking in a personal capacity.

The topic may be included in a list of EU budget funding options to be outlined in a commission document towards the middle of October, originally intended for publication this month.

Other sensitive EU revenue-raising plans that budget commissioner Janusz Lewandowski could raise include a potential EU aviation tax, plans for which commission officials are currently working on.

Careful to frame the list of mechanisms as a means for member states to reduce their direct payments into the EU budget, Mr Lewandowski also signaled over the summer that the EU budget could be bolstered by taking a share of a new European financial transactions tax or the sale of carbon credits.

August saw a series of member states come out in favour or against the controversial issue of the EU raising its 'own resources'. Spain, Belgium, Austria and Poland have said they generally support the idea, while the UK, France, German are frosty.

Next month's commission document or 'review' will also analyse the pros and cons of the current EU multi-annual budget (2007-13), and is set to call for a greater degree of flexibility in the future.

The issue is likely to chime well with MEPs who have also been frustrated by the current framework's strictures, which limit the ability divert funding from one budget category to another, for instance when rapid funding is suddenly needed following environmental or economic crises.

Member states are likely to be wary however, conscious that such a move would provide the EU institutions with a longer decision-making leash.

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