Saturday

23rd Sep 2017

Political conditions for EU funds prompt debate

  • Warsaw. Some in the EU want to link access to cohesion funds to the respect of the rule of law, for instance in Poland. (Photo: Jorge Lascar)

Negotiations for the 2021-2027 EU budget will start only next year, but amidst a revenue shortfall due to Brexit and tensions over some member states' behaviour, the question of putting more conditions on cohesion funds has come to the forefront.

With the UK leaving the EU, the bloc's budget will have a 10 to 11-billion hole to fill each year, the EU budget commissioner, Günther Oettinger, pointed out on Monday (26 June).

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • "We can't shy away from this question," said EU budget commissioner Guenter Oettinger. (Photo: European Commission)

At the same time, the EU will have to spend more on "new tasks that make sense to do at EU level", such as managing EU borders or taking refugees, he said.

Oettinger was speaking at the Cohesion Forum in Brussels, where the issue was debated, two days before the European Commission presents its ideas on the future of EU finances - on Wednesday.

In the EU budget, cohesion policy is an important part, financially as well as politically. At almost €360 billion, it represents around a third of the current 2014-2020 budget.

"Given our huge ambitions in this EU project, let me put this tactfully, the sums we are talking about are quite modest," Karl-Heinz Lambertz, the first vice-president of the European Committee of the Regions, said in a meeting earlier on Monday.

He insisted that while the EU needs a "stronger" cohesion policy, "the financial dimension is important, but also the underlying principles."

The debate about which principles should determine which cohesion funds are distributed was launched after some EU countries refused to apply EU "solidarity" during the 2015-2016 refugee crisis. 

It was also triggered by concerns about the rule of law in Poland and Hungary and was heated up further by the prospect of less funding being available after Brexit.

'Sensitive domain'

Oettinger, in a press conference last month, said that the EU commission would present "questions and options" about a possible link between the "cohesion programme and rule of law".

On Monday, however, he said that while "we can't shy away from this question", it is not "in the commission's mandate" to answer it.

"It's a sensitive domain," he added.

Germany, the biggest contributor to the EU budget, has also raised the threat of linking access to EU funds to respect for the rule of law.

In a recent document outlining its position on cohesion policy after 2020, the German government said that "it would be worth exploring the possibility of making EU cohesion funding subject to compliance with the basic principles underpinning the rule of law."

On Monday, a German official said that there is "nothing specific on this as yet".

Kirsten Scholl, deputy director general for European Affairs at the German economy ministry, said that "various tools" exist at the EU level to deal with concerns over the rule of law, and that cutting cohesion funds in case of problems is only "an aspect that we are discussing".

Seen from the Committee of the Regions' perspective, making cohesion funds dependent on the rule of law or participation in refugee relocation schemes is a non-starter.

"I believe this is not possible legally," said Michael Schneider, the committee's rapporteur on the future of cohesion policy beyond 2020.

He pointed out that two-thirds of the committee's delegates "decided not to open that Pandora’s box", when the Italian delegation put forward a proposition to cut funds to countries that do not take asylum seekers.

'Not a charity'

"We believe that this type of measure runs counter to the principles of cohesion policy," he insisted. "If a member state does not respect rules, and then cohesion funds are withheld, you are not punishing the national government but the cities and regions, which might disagree with the national government."

"Cohesion policy is not a charity. It is more like a constitutional right to ensure cohesion, added Schneider, who is a German centre-right European People's Party (EPP) politician, like Oettinger and German chancellor Angela Merkel.

Another proposed condition to receive EU funds seems to be less controversial, however.

In its position paper, Germany says that respect of the commission's economic recommendations should be taken into account before dispatching funds.

This would "create an additional incentive for member states to comply with the recommendations and also result in better link between EU cohesion policy … and the relevant country-specific recommendations," it said.

This was echoed by Oettinger, as well as EU commission vice-president Jyrki Katainen.

In a speech also at the Cohesion Forum, he said that cohesion policy should "incentivise structural reforms".

"We would seek to find ways that support structural reforms by providing positive incentives to member states," he said.

EU mulls post-Brexit budget options

EU seeks novel ways to plug a Brexit-based budget hole of up to €11 billion, but income from fines, such as the one on Google, cannot be relied on.

Bank agency shuns EU invitations

The EU's banking agency is not visiting cities that want to host the agency post-Brexit "to ensure objectivity". The medicines agency has no such qualms.

Investigation

EU bank accused of muzzling watchdog

An ongoing review of the the European Investment Bank's "complaints mechanism" could make the oversight branch less independent and less effective.

Anti-EU parties face funding cuts

Reforms proposed by Commission would reduce EU funding for nationalist and ultra-right European political parties by up to 66 percent.

News in Brief

  1. Dutch state appeals ban on taking air-polluting measures
  2. May proposes 2-year transition period after Brexit
  3. May to call on EU's 'sense of responsibility'
  4. Catalonia has 'contingency plans' for independence vote
  5. Last German polls confirm Merkel's lead
  6. EU to step up sanctions on North Korea
  7. Tusk calls 'euro summit' in December
  8. Report: May to seek two-year EU transition

Stakeholders' Highlights

  1. EU2017EEEU Finance Ministers Agreed to Develop New Digital Taxation Rules
  2. Mission of China to the EUGermany Stands Ready to Deepen Cooperation With China
  3. World VisionFirst Ever Young People Consultation to Discuss the Much Needed Peace in Europe
  4. European Jewish CongressGermany First Country to Adopt Working Definition of Antisemitism
  5. EU2017EEFour Tax Initiatives to Modernise the EU's Tax System
  6. Dialogue PlatformResponsibility in Practice: Gulen & Islamic Thought
  7. Counter BalanceHuman Rights Concerns Over EIB Loan to the Trans Anatolian Pipeline Project
  8. Mission of China to the EUChina Leads the Global Clean Energy Transition
  9. CES - Silicones EuropeFrom Baking Moulds to Oven Mitts, Silicones Are a Key Ingredient in Kitchens
  10. Martens CentreFor a New Europeanism: How to Put the Motto "Unity in Diversity" Into Practice
  11. Access MBAGet Ahead With an MBA Degree. Top MBA Event in Brussels
  12. Idealist QuarterlyIdealist Quarterly Event: Building Fearless Democracies With Gerald Hensel

Stakeholders' Highlights

  1. Mission of China to the EUPresident Xi Urges Bigger Global Role for Emerging Economies
  2. EU2017EEAre We Socially Insured in the Future of Work?
  3. European Jewish CongressFrench Authorities to Root Out "Societal Antisemitism" After Jewish Family Assaulted
  4. European Federation of Local Energy CompaniesClean Energy for All? On 10.10 Top-Level Speakers Present the Clean Energy Package
  5. UNICEFUp to Three Quarters of Children Face Abuse & Exploitation on Mediterranean Migration Routes
  6. Swedish EnterprisesEurope Under Challenge; Recipe for a Competitive EU
  7. European Public Health AllianceCall to International Action to Break Deadlock on Chronic Diseases Crisis
  8. CES - Silicones EuropePropelling the construction revolution with silicones
  9. EU2017EEEU 2018 Budget: A Case of Three Paradoxes
  10. ACCAUS 'Dash for Gas' Could Disrupt Global Gas Markets
  11. Swedish Enterprises“No Time to Lose” Film & Debate on How Business & Politics Can Fight Climate Change
  12. European Free AllianceSave The Date!! 26.09 - Coppieters Awards To... Carme Forcadell