Friday

27th May 2016

Poland keen for EU to spend its way back to growth

  • The four budget musketeers (Photo: European Commission)

Poland has signalled it will push for a "bold" EU budget in the 2014 to 2020 period in order to boost economic growth amid the financial crisis.

Polish Prime Minister Donald Tusk in Brussels on Tuesday (30 August) said his country is a living example that EU funds "spent wisely" can lead to economic growth.

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With a growth rate of 4.3 percent last quarter, Poland has made the best out of the EU regional and farming aid put at its disposal, proving that "good absorption of EU funds" can fuel economic recovery, he added.

"I want to show off a little bit," he said during a press conference in the EU capital with European Commission chief Jose Manuel Barroso holding up a map of Poland showing the figure 4.3 percent and a smiley.

The Polish politician seemed undeterred by British and German criticism towards the draft budget proposal tabled before the summer recess.

"We know the debate of the multi-annual financial framework (MFF) is not easy. We don't expect the UK to be enthusiastic, British are always sceptical on EU projects, but we want to focus on a positive outcome," Tusk said.

Tusk and Barroso announced that they will hold a high-level conference on the MFF on 20 and 21 October.

The meeting, to be co-chaired by Tusk and the heads of the EU commission and Parliament is aimed to "deal with the whole philosophy of the EU" and fuel a "serious debate" on how to finance key policies such as regional funding, the Prime Minister explained.

He added that an informal meeting of EU affairs ministers in Sopot in July was "unexpectedly" positive - with a large majority of countries in favour of the commission's generous EU budget draft despite British opposition.

For his part, Barroso said that he was not expecting a "unanimous agreement" at this stage, but was encouraged by the initial response from an "overwhelming majority" of member states and the European Parliament.

"Let's make it a good example of European spirit, to have a focused discussion on the MFF not as a discussion on a budget for Brussels, but a budget for all of Europe," he said.

The main point, amid all the austerity measures in member states, is "how we can help growth in Europe" by means of the EU budget, the Portuguese politician noted.

Under the commission blueprint, EU spending would rise to €971.52 billion over the seven-year period, with €1,025 billion pledged in commitments.

This compares with €925.5 billion and €975.77 billion under the current period (2007-2013), although there is little change in terms of the budget as a ratio of EU countries' gross national income (GNI).

One of the most contentious ideas pinned down in the budget draft is to have a series of EU taxes, including one on financial transactions.

Apart from the UK, which is determined "to play hardball" on the budget increase, Germany in June also rejected the EU financial tax idea. "We don't need this tax, the EU has no financing problem," German foreign minister Guido Westerwelle said at the time.

Finance ministers baulk at tax-avoidance rules

Member states will discuss again in June a proposed directive to outlaw practices used by large companies to avoid paying taxes. Meanwhile, the European Parliament makes progress on its probe of Panama Papers.

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