financial perspectives’ 2008/9 review the european council decided on the 2007-2013 financial...

Financial Perspectives’ 2008/9 Review

• The European Council decided on the 2007-2013 Financial Perspectives on 19 December 2005 under the British Presidency

• Part III of the Decision states:

The European Council (…) invites the Commission to undertake a full, wide ranging review covering all aspects of EU spending, including the CAP, and of resources, including the UK rebate, to report in 2008/9. On the basis of such a review, the European Council can take decisions on all the subjects covered by the review. The review will also be taken into account in the preparatory work on the following Financial Perspective. (Council of the European Union, ‘Financial Perspectives’, 15915/05, Brussels, 19/12/2005)

• That is what we are going to do!

WaCoPaS Multiannual Financial Framework 2007-2013

Timetable

• 25 April 2006: Commission delivers a proposalProposal by the Team of tutors: Concentration on the first 4 headings of the 2007-2013 agreement

– Sustainable growth– Preservation and management of natural resources (incl. CAP)– Citizenship, freedom, security and justice– EU as a global player

• 10 May 2006: Member States/European Parliament deliver minimum and maximum papers (Commission only minimum paper)

• Coalition / Compromise negotiations take place• Presidency prepares a compromise proposal based on / in cooperation with (?)

the Commission for the negotiations in Warsaw • 25/26/27 May 2006: European Council in Warsaw


Institutions


European Parliament

Role• At first sight limited in the actual negotiation, BUT the member states should

not disregard the position of the EP• The FP can only enter into force through an inter-institutional agreement

between the EP and the Council, i.e. the budgetary authority

Position• Calls for ‘appropriate’ financial resources for the EU• Political priorities such as competitiveness, growth and employment /

citizenship, freedom, security and justice and budgetary priorities need to be brought in line

• Stresses the need for more flexibility in the annual budgetary procedure, i.e. the FP cannot replace the yearly budgetary procedure


Commission

3 priorities during the negotiation in 2004/2005:• Promoting sustainable development by completing the internal market and mobilizing

various policies (economic, social and environmental) to that end. The objectives of competitiveness, cohesion and the protection and management of natural resources also fall under this heading.

• Giving meaning to the concept of European citizenship by completing the area of freedom, justice and security and ensuring access to basic public goods and services;

• Promoting a coherent role for Europe as a global partner.

Position:• Believes that the significance of the challenges identified justifies an increase in the budget

but can be drawn up within an overall own resources ceiling of 1.24% of GNP. • Suggests that from 2013 onwards the financial perspective should be established for a

period of five years, which would fit in better with the institutional timetable • Calls for the solidarity found to be integrated into the financial framework.

Political context regarding the 2008 review:• Institutional weakness of the Barroso Commission, lack of political leadership• Uncertainty on the institutional future of the EU (draft constitutional treaty)


Council Secretariat

• Crucial role• Formally: simply support of presidency

– minutes / synthesis report – together with presidium – Collecting written interventions– Timing of the meetings

• But: Power of drafters– Importance of the first text– can help to build informal compromise (in mission of

presidency?)

• tension between member states interest and EU interests

• own interests


Members States


Czech Republic (Presidency)

Priority as Presidency:• Finding an Agreement

Priorities:• Maintaining the EU budget’s subsidies for poor regions… and

specially for the CR• Very strong support for the structural funds and the Cohesion

funds

Other positions:• Support to the agreement on the financing of the CAP from

2002• In favor of expenditure supporting the goals of the Lisbon

Strategy

Possible coalition partners: other new MS


France

Context:• Traditional support for the progress of the EC budget (Mitterrand…)• Europe as a delicate political issue : refusal of the Draft Constitutional

Treaty by referendum (29th May 2005)

Position:• Support to the principle of a limitation of the EC budget : a shift in

France European policy ?• Strong support for CAP spending

(refusal to re-consider the Chirac-Schröder agreement)• In favor of a suppression UK abatement : tensions between Blair and

Chirac

Political context regarding the 2008 review:• Presidential election in 2007 : Chirac will leave. Will CAP spending still

be considered as a major priorities by France?• Possible coalitions : Germany, Mediterranean countries?


Hungary

Context :• Decrease in EU-enthusiasm one year after entry : failure to bring increased political and

economic stability ; old Member States put a curb on economic integration of the new Member States

• Hungary is looking forward to closing the transition period and acquiring the status of a full Member State.

Position :• Strong support for high EU budget : cohesion and structural funds are to be raised in order

to close the economic gap within the EU• Strong support for CAP spending and the current CAP agreement• In favor of a fair burden sharing, e.g based on GNI level• The British rebate is not a main issue as long as it is not a brake for a high enough budget

Possible coalitions :• New member states for higher budget• Cohesion and structural funds beneficiary countries (Spain, Italy, Portugal)• Agricultural countries on CAP agreement


Ireland

Context:• Former net recipient, profited a lot from cohesion funding• Stresses importance of the Lisbon agenda goals and cohesion funding

especially for the new member states

Position:• Encourages more generous budget than 1,0% (in favor of the Lisbon

agenda goals and cohesion funding)• Strong support for CAP spending• In favor of a suppression UK abatement

Possible coalitions :• New MS, “small” MS, europhile MS…


Italy

Context:• Net contributor to the union’s budget• Major recipient of the Union’s cohesion policies

Position:• Is for maintaining a rather tight budget (the ceiling of this budget may

be fixed up to 1.06 of the union’s GDP)• Refuses to increase its net contribution to the Union’s budget• The significant reduction of the UK rebate was one of its major priority• May accept a redirection of funds away from CAP towards other areas

(such as Denmark)• Strongly opposed to any reduction in cohesion policy funds (such as

Spain)

Political context regarding the 2008 review:• Possible changes of Italy European policy: Berlusconi vs. Prodi


Netherlands

Context:• Rejected the Commission’s proposal of an increase in the budget

to 1.24% of EU GNI in 2004• Rejected the « generalised correction mechanism » proposed by

the Commission during the Luxembourg presidency because it did not offer enough compensation

• Europe as a delicate political issue : refusal of the Draft Constitutional Treaty by referendum (June 2005)

Position:• For a new orientation in the spending policy: only the poorest

members should benefit from structural funds; the agricultural costs of Bulgaria and Romania should be reduced, cuts in export subsidies

• For maintaining the budget ceiling of 1%• For reducing its net contribution to the budget • Possible coalitions : Sweden? UK?


Spain

Context:• For a long time a net receiver, global financial position towards EU is

tending to neutrality• Strong beneficiary of Development funds since 1986• Eligibility to Cohesion Funds will stop soon due to strong growth rates

and a raise in standards of living level. Number of regions eligible to Structural Funds strongly threatened.

Position:• Against any global reduction of European budget spending (new MS)• Supports a phase-out of regional aids, and a share contribution to

enlargement costs• Strong commitment for spending related to Security and justice

(terrorist attacks) and the fulfilment of Lisbon objectives• Not in favour of a reduction of the CAP amounts• Very strong intention to reduce the UK abatement (3rd largest

contributor after France and Italy)• Possible coalition partner: France?


Sweden

A “modern” budget:• Critics of the EU model of expenditure. In favour of

reform of the CAP.• Strong supporter of a modern budget profile, i.e.

supporting growth, research and development• Wants to connect the financial perspective and the

Lisbon strategy

A “reasonable” contribution:• Sweden is among net contributors• Supports a share contribution to the budget• Willing to support the enlargement but refuses for

relative rich countries in southern Europe


Germany

Context• Has long been the paymaster of the EU; however, in the

current economic situation does not want to stay in this position

Position • Wants a budgetary ceiling of 1,00% of GNI, but is open to

negotiate• Would welcome a reduction / abolishment of the British

rebate, but this is not the most important issue at stake• Criticizes a reduction of payments from the structural /

cohesion funds to the new member states• The French-German compromise on CAP was not to be opened

up again in 2005; however, for the 2008/9 review there should be the possibility for new negotiations

Possible Coalition Partners• Net payers (‘letter of the six’), new member states, France


United Kingdom

Context• Very Eurosceptic public

Position • Wants a FP that can be sold to the public, therefore

– the total expenditure by the EU must remain low– the British rebate must be protected– the Common Agricultural Policy needs to be cut back– the budget must appear to be modern and responsive to

the problems currently facing Europe

Possible coalition partners• Net payers (‘letter of the six’)


Poland

Position

• Against reduction of the overall budget to make sure that policies like CAP and structural assistance are phased in for the new member states as soon as possible.

• Cautious about the proposed ‘Globalisation Adjustment Fund’

• Against earmarking large parts of the structural funds to ‘growth and jobs’ (Lisbon Strategy)

• In favour of abolishing the British rebate and against a general correction mechanism for net payers

Possible Coalition Partners• New member states, France


Portugal

Position

• No reduction of the overall budget• Ensure that the cuts for the current cohesion countries

are as small as possible • Importance of the funds for ultra-peripheral regions

(Azores, Madeira)

Possible Coalition Partners

• Greece, Spain, new member states (overall size of the budget)


Greece

In Principle• The Luxembourg Presidency Proposal is considered as a

minimum (1,06% of GNI)• The redistributive dimension of the EU finances should

correspond to its quasi-federal ambitions at a time when enlargement has brought in countries with important structural problems

In Practice• Most important issues are agricultural and structural

funds including support for Mediterranean products and fisheries

Possible Coalition Partners:New member states, Portugal, Spain


Finland

Context• Finland is a net contributor and does not want to see its

net contributions risePosition• Supports the Commission in its opinion that

competitiveness is important, but does not want to favour it at the cost of agricultural policy

• Against the British rebate, but this is not the most salient issue

• Main interest: rural development and regional policy

Possible Coalition Partners• Net payers, possibly esp. France


Luxembourg

Context • The negotiations on the FP failed in June 2005 under the

Luxembourg PresidencyPosition• The Luxembourg Presidency compromise proposal foresaw:

– a budget volume of 1,06% GNI– a reduction of the British rebate, mainly related to more spending

for cohesion policy in the new member states• More money for competitiveness, less spending on CAP• Generally in favour of the „Globalisation Adjustment Fund“

proposed by the CommissionPossible Coalition Partners • Many member states had been able to agree with the

Luxembourg proposal, except for the UK, Sweden, the Netherlands, Spain and Finland


Latvia

Context• EU is seen as a means to reduce „social and economic

backwardness“ (Prime Minister Kalvitis)

Position• Most important: cohesion fund• In favour of reassessing the priorities of the EU budget

especially in relation to CAP• Against the British rebate• Calls for solidarity between member states

Possible Coalition Partners• New member states, budget modernizers


Slovakia

Background information• Slovakia is a very liberal market economy (flat income

tax of 19% for everybody)

Position• In favour of a modernization of the budget

– Reduction of CAP spending– Increased investment on education, research and

information technology• Against the proposed „Globalisation Adjustment Fund“

Possible Coalition Partners• New member states, UK


financial perspectives’ 2008/9 review the european council decided on the 2007-2013 financial...

Documents

financial perspectives

european council

european union

european parliament

budgetary priorities

justice eu

resources ceiling

proposal proposal