Tuesday

26th Mar 2019

Commission hints at political conditions for EU funds

  • The Commission is think over "how we assess a member state beyond its economic strengths and weaknesses". (Photo: European Commission)

EU funds for poorer countries and regions could become conditional after 2020, and depend on respect for the rule of law and economic recommendations, the budget commissioner said on Tuesday (30 May).

Guenther Oettinger told journalists that he is reflecting on whether to have "changed conditionality or reinforced conditionality" in the 2021-2027 EU budget, which he will propose later this year or the next.

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He said that in the Council of the EU, where representatives of member states meet, "not everyone is convinced of the economic sense of all of the programmes which we are financing under the cohesion funds."

"Many projects are very sensible and they have clear added value, but others are like straw fire," he said, arguing that more control should be imposed on how member states and regions use the funds.

Oettinger said that a first possibility would be to use the so-called country specific recommendations – the annual document pointing out what countries should do to improve their economy – as "a blueprint, a compulsory document".

For example, he said, if recommendations say that a country has "very bad digital infrastructure", "it will have to call out for more funds for broadband".

Anticipating criticism, the commissioner argued that the recommendations are "democratic" because they are published by the EU commission but are adopted by member states in the council. This, he said, can justify a "possible conditionality".

Oettinger went further and evoked a possible link between the "cohesion programme and rule of law".

While admitting that it is a "politically sensitive" issue, he said that the commission will come back with "questions and options" on "how we assess a member state beyond its economic strengths and weaknesses".

'Last normal budget'

The idea of putting EU funds under stricter conditions was raised by several member states and MEPs after other countries, such as Hungary or Poland, failed to show "solidarity" during the migrant crisis.

“Countries shouldn’t receive as much [money] if they don’t comply with EU law,” Cecilia Wikstroem, the Swedish MEP in charge of the reform of the EU asylum system, said in March.

"If countries continue to avoid resolving the issue of migration, or tax dumping at the expense of their neighbours, they will not be able to receive new net payments of billions from Brussels," Austria's chancellor, Christian Kern, told German daily Die Welt in March.

The issue of how to spend EU money has also become crucial with the UK leaving the bloc, therefore reducing the funds available.

Negotiations for the first multi-annual budget without the UK will start as soon as the commission makes a proposal.

Oettinger said on Tuesday that "it would be better to submit a realistic draft in summer next year with the consequences of Brexit and of the white paper process".

The white paper process is a series of scenarios and propositions by the commission on various areas. Following the first of a series of documents published in March, the commission is expected to present its ideas on the future of the eurozone this week.

In the meantime, on Tuesday Oettinger presented the commission's draft budget for 2018, which he said is "the last normal budget at 28", referring again to the UK leaving the bloc.

The EU executive proposed a 1.4-percent increase of commitments (promises to pay) and a 8.1-percent increase in payments, compared to this year.

Usual tasks and new challenges

"This is realistic and will meet challenges faced by [the] EU," said Oettinger. He insisted that his budget proposal was tailored to "fulfil traditional tasks", such as the structural funds, research, or agriculture, while taking up new tasks, for instance: border security or funds to keep refugees in their countries or in Turkey.

The commission increased the budget for Erasmus+, the student exchange programme, by 9.5 percent to €2.3 billion, and the budget for the Horizon 2020 research programme by 7.3 percent, to over €11 billion, as part of an effort to help spur growth and reduce unemployment.

It also added for the first time a €40-million budget line for cooperation on defence research.

Siegfried Muresan, the European Parliament’s chief budget negotiator, welcomed a proposal that "takes into account the priorities" of the parliament "as regards growth and jobs on the one hand and security on the other hand".

Muresan, from the centre-right EPP group – the same as Oettinger and commission president Jean-Claude Juncker – warned that the parliament "shall not accept any cuts during the upcoming negotiations with the council".

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