Opinion
of the Standing Committee for National Defense and ForeignAffairs,the Standing Committee for Production and Commerceand the Special Standing Committee for European Affairs of the Hellenic Parliament on the European Commission’s Communication (and the relevant Regulation proposals ) to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions dated June 29 2011 concerning the new Multiannual Financial Frame ( MFF) 2014-2020
On June 29 2011, the European Commission presented its proposals on the new multiannual financial frame (MFF) 2014-2020. In line with article 312 of the Lisbon Treaty, issuing the relevant Regulation requires the European Parliament’s approval, which, therefore, will participate actively throughout the relevant negotiations. At the level of the Council for General Affairs, debate and proposals’ elaboration will continue until the end of 2012 ( end of Cyprus Presidency).
The Commission’s Communication presents the new proposals’ basic architecture and main points. Its structure reflects the goals of the Europe2020 Strategy, while further flexibility aims at the European Union’s response to the challenges it is faced with, which mainly concern the impact of economy’s and society’s globalization, climate change, energy dependency and migration pressures.
The Hellenic Parliament has already had the opportunity to examine and express its views on the European Union’s multiannual financial frame (MFF) 2014-2020 during two previous sittings; the general frame of the European Commission’s proposal was analyzed in one of them, whereas the other focused on the new CAP’s financial perspectives.
The different priorities and concerns of EU member-states concerning the long-term European budget make intergovernmental negotiation more difficult, especially in a period of a generalized economic and financial crisis.
Multi-annual financial perspectives are associated with the broader political and economic issue of the European Economic Governance. Issues such as the EU’s way out of the economic crisis, the armoring of its financial attitude, the search for a common European mechanism, the deepening of European policy and economic integration institutions and solidarity, are inevitably brought for discussion. Negotiation takes place in an environment characterized by the economic and financial crisis, certain member-states’ excessive deficits and ensuing austerity programs, social concerns fueling Euroscepticism, and, at the same time, the need for the European Union’s growth, global competition challenges, Europe 2020 Strategy’s implementation.
The Hellenic Parliament’s initial view of the European Commission’s proposals on the new multiannual financial frame (MFF) 2014-2020 is positive, even though its amount, as representing EU’s GNI percentage is deemed insufficient.
The Cohesion Policy, combined with a fair Common Agricultural Policy continue to be decisive instruments for promoting solidarity, reducing economic and social inequalities among EU member-states and achieving strategic EU goals, provided that they keep on placing priorities on less developed regions.
However, during this debate, national financial frames and strategies, and, certainly, each country’s individual priorities on the basis of economic, social and political particularities must be taken into consideration.
Our country places special emphasis on Common Agricultural Policy as well as Cohesion funds; being crucial to the country’s economy support,it pursues their maximization, through European co-financing.
Furthermore, we agree with COSAC’s proposal to include into MFF negotiations among EU institutional organs the goal of improving accountability and transparency in EU funds management.
Context
Every financial frame, or budget, depicts cohesion possibilities of its reference group or collective entity. The present financial frame depicts the European Union’s cohesion deficit.
The need for redefining EU goals is dictated in the frame of the new economic reality; the EU’s fundamental goal must now be not only control over financial figures, but halting recession as well.
It is recognized that community method calls for community institutions.
Nevertheless, the community budget’s formulation to 1% of community GNI does not create favorable conditions towards EU integration. Of course, this approach reflects the generalized limitation spirit, resulting from governments’ and great powers’ –within the EU-ideological and political priorities.
The multiannual financial frame’s (MFF) promotion may be combined with EU’s reorganization, strengthening of its social model and eradication of North-South differences.
MFF 2014-2020 general characteristics
The political, diplomatic and technical negotiation takes place in a period during which Europe suffers a crisis disorienting it from tackling its basic challenges for energy security, population aging, migration, research and technological development. The new economic governance is unable to provide solutions in this new reality. What must be strived for is convergence of economies’ structures, not rated convergence.
To begin with, we express reservations on the way of calculating GNI, given its use as reference basis.
For properly assessing Commission’s proposal concerning resources’ amount (1,05% of GNI), comparison must be made to its( Commission’s) proposal concerning the 2007-2013 period.
MFF 2014-2020 amount and duration
We are guided by implementing the resources efficiency principle, and, therefore, maintaining budget figures amounting at levels allowing for EU goals achievement. Financing new policies must not be carried out at the expense of traditional community policies ( CAP, Cohesion Policy).
Difficult economic conditions and recess call for EU action towards financial recovery, growth and employment opportunities development.
“Freezing” or reducing EU budget will hinder EU growth and undermine its internal cohesion.
WE deem positive the new MMF’s seven-year duration regarding conditions of financial stability, predictability and flexibility required in course of materializing “Europe 2020”strategy.
MFF 2014-2020 Structure
The new MFF’s priorities and structure totally coincide with those of Europe 2020 strategy.
Driven by the need for securing resources-as much as possible- for their destination goals, we deem that transferring resources between EU policies must take place within strict restrictive limits, with reservation as to the possibility for enhanced flexibility.
WE propose further simplification of procedures and rules for contracting/project implementation and EU funding programmes , always under the condition of sound financial management. Maximization of funds absorption will lead to growth invigoration and the creation of employment opportunities.
Own resources-structure
Commission’s proposal for new Own Resources (Financial Transaction Tax, new form of VAT) is deemed correct and appropriate, as securing EU budget independency.
Yet, it is pointed out that the budget must have steady resources, be themgross income based VAT, or financial transaction tax, in order to be able to fund structural policies.
The Financial Transaction Tax shall deliver benefits not only to community budget, but also it will be reimbursed to member-states.
It is important for the system to be simple and effective, allowing for the unimpeded collection of new own resources.
Rebate Mechanisms and Corrections
We consider the Commission’s proposed simplified system as moving towards the right direction. However, total elimination of distortions induced would be desirable, given the need for afair system based on transparency and solidarity principles, triggering added value expectations to member-states. Moreover, in terms of financial contribution, distortions’ elimination would substantially enhance the position of Greece, as well as of other countries.
Cohesion Policy
A slight decrease in cohesion funds/resources is observed. Nevertheless, Cohesion Policy is in need of more ambitious goals in order to be able to respond to current economic circumstances and function as a lever for economic growth, creating conditions for growth and social cohesion in all EU member-states regions.
WE strongly support territorial (spatial) cohesion, with emphasis on remote and island (insular) areas.
We deem positive the establishment of thenew “TransitionRegion” category, yet, on condition of guaranteeing its sufficient funding.
It is noted that, under current circumstances, with the largest part of countries being under 75%, the designation of years 2009 and 2010 as reference basis years should be pursued in the context of negotiations.
Moreover, weconsider Regions characterized by geographical particularities, such as the islands, as eligible for the “Transition Region” category.
Our country pursues the formation of a special status for capital and major city regions facing problems, such as the Attica Region.
Conditionality
Associating macroeconomic conditionality to Cohesion Policy will jeopardize its effectiveness.
The failure of a country to fulfill its macroeconomic commitments cannot escape effects in disbursement of cohesion funds. Moreover, sanctions imposed on a country suffering major economic crisis and functioning in the context of financial support mechanisms, can onlyfuel recession.
In what concerns structural conditionality, member-states’ failure to implement reforms cannot constitute condition for financing through structural funds.
We admit the fact that Strategy’s “Europe 2020” and Cohesion Policy’s goals are interdependent and complementary. Nevertheless, funds’ disbursement or imposition of sanctions should be associated only with sound financial management of Cohesion Policy funds and not with the achievement or failure to achieve Strategy’s “Europe 2020” goals.
We agree that performance conditionality should function as a motive for Cohesion Policy funding and not as sanction.
In this spirit, we support the establishment of performance reserve at a national level for those succeeding to achieve preset and measurable goals.
Cohesion Policy and “Europe 2020” Strategy
The thematic approach of the Europe 2020 Strategy rules out growth’s regional dimension. We agree with the strategy’s goals, yet, we disapprove their impact.
We express reservations for associating Cohesion Policy with “Europe 2020” Strategy, despite the fact that their goals are interdependent and complementary, yet, in any case, distinctive. Cohesion Policy, although contributing to the materialization of Strategy’s “Europe 2020”goals, is not merely a tool for its achievement. Throughout the goal network, where certainly Strategy “Europe 2020” goals for development are predominant, parameters such as regional development, economic and social convergence and cohesion, as well as flexibility, should be taken into account.
We consider resource allocation among the Union’s Region on the basis of GNP indicator should be supplemented with indicators relating to Strategy’s “Europe 2020”priorities and goals.
European Social Fund ( ESF)
We deem positive the Commission’s proposal for including the European Social Fund (ESF) into Cohesion Policy.
However, the fact that there is provision for a very low rate of ESF contribution, depending on regions’ GDP raises subsidiarity principle issues. It is our view that ESF resources’ allocation must continue to be member-states’ jurisdiction.
Cohesion Fund-Statistical Data
The Cohesion Fund constitutes political negotiation’s major goal. Given that the negotiation outcome will depend upon the reference period for Gross Domestic Income (GNI), as well as upon regional data, it is our view that Greece must come under Cohesion Fund, regardless of whether itsGNI exceeds 90% of the EU-27 average (reference basis case study for the three-year period 2008-2010). Therefore, we consider necessary the possibility of using more recent national and regional data, which depict the recorded recession in EU member-states.
The Multiannual Financial Frame (MFF) 2014-2020,should include special provision for member-states resorting to support mechanisms for their economies.
Connecting Europe Facility: Infrastructure Fund and Project Bonds
Our initial views are positive regarding Connecting Europe Facility; in this frame we stress the increased needs of the islands.
The proposed financing tools (project bonds) for encouraging investment through private funding are, undoubtedly, in the right direction; however clarification is needed concerning the proposal materialization process and terms.
Cohesion Policy’s Spatial Dimension
Further strengthening of spatial dimension is observed, which is stipulated as well by the Lisbon Treaty, on the basis of respecting the solidarity and cooperation principles.
WE support the Cohesion Policy’s spatial dimension, to the extent of its aiming at dealing with spatial impact caused by demographic changes and climate change and only if considering insularity as a horizontal issue in EU policies. In this light we support:
-The permanent inclusion of all insular regions in Cohesion Policy’s intermediate target, which is expected to be established for regions between 75% and 90% of the EU per capital average GDP, regardless of GDP level and which are not included in the Convergence Goal.
- Inclusion of islands in trans-European networks, in the frame of the need for connecting insular, midland and regional areas with the Union’s central areas.
Common Agricultural Policy (CAP)
The Commission’s proposal is initially viewed as positive.
However, a reduction in CAP’s budget is recorded, down to 11,4%, in actual terms, at a time when the European Union sets new political priorities in Europe 2020 Strategy, such as its environmental and climate action objectives.
Certainly negotiation must pursue other alternatives, for supporting- directly or indirectly -the agricultural community.
Qualitative as well as quantitative features should constitute focal points in the negotiation process. The Common Agricultural Policy must be linked with broader efforts towards growth, both at national and European level.
It is of crucial importance that the basic two-pillar structure of the CAP will be maintained; the first pillar, concerning farmers’ income support (direct payments-net inflow of community funding), and the second concerning rural development are equally important for the country. Certainly, Europe’s reference to direct payments’ progressive convergence- in the first pillar- is positive. However, we hold reservations regarding the effort for resource reallocation in favor of Pillar II, given that it is co-financed.
The “Green Dimension” is deemed important, which now extends to both pillars. However, we propose the broadening of measures that will cover the green component clause. A “green umbrella” is dictated for goods produced raising high pollution.
We deem positive the Commission’s proposal to extend the European Globalization Fund’s scopeto include assistance and facilitating farmers’ adaptation to new circumstances caused by globalization. Nevertheless, it must not function as a basis for contracting further third countries’ privileged access agreements to the EU market. More so when member-states’ traditional goods production is put at stake.
Internal (Home) Affairs
The European Commission’s proposed increase (by 1,8 billion euro) in funding the Internal Affairs sector, although oriented in the right direction, still is inadequate. It must be noted that clandestine immigration pressures exercised on EU’s external borders and on our country’s in particular, tend to increase.
Given the vagueness in Internal Security Fund’s action allocation, we believe that the internal security sector should not be favored at the expense of the border guard and control sector.
In what concerns Migration and Asylum Fund, the proposed funds’ reduction for integration actions is a source of concern.
What is more, the inclusion of Rebate Fund into Migration and Asylum Fund raises reservations, given that returns are inextricably linked to border security, and, therefore must be included to those actions.
External Cooperation Funding Means
External relations budget, in spite of the recorded small increase, does not meet the goals for EU’s leading role in the international arena.
Nevertheless, we agree with the development of a single Pre-accession Instrument, as well as with the transformation of the Neighborhood and Partnership Instrument to Neighborhood Instrument.
The different distribution (allocation) between the Pre-accession Instrument and the Neighborhood Instrument is noted, as caused by historical events in the countries of the Neighborhood Southern Dimension. For our country, both policies are a priority, with enlargement in the lead.
Research and Innovation
We are in favor of the funds’ proposed increase. The basis criterion in project selection should be scientific and technological excellence.
The basis for Research and Innovation actions should consist by both EU strategy’s “Europe 2020” thematic priorities, as well as the environment and information technologies, which are included into the thematic priorities of the 7thEU Framework Programme for Research, Technological Development and Demonstration Activities.
We constantly are in favor of any proposal aiming at the acceleration of procedures and red tape(bureaucracy) reduction.
Synergy and co-funding for research and innovation projects through structural funds is reasonable and dictated.
Reducing the digital-technological gap within the EU remains a major goal.
Environmental Policy and Climate Change
The strategy followed towards promoting integration of the environmental dimension into sector policies is deemed positive.
Member-states’ production basis, regional development and employment will benefit from utilizing community resources. Special gravity is placed in horizontal dimension materializing, especially CAP and Cohesion Policy.
Education and Training
The proposed budget increase for education and professional training is deemed positive.
Undoubtedly, the mobility programmes for the youth, as well as lifelong learning programmes are positive steps towards tackling unemployment and for achieving strategy’s “Europe 2020” goals, together with promoting gender equality and measures for employment market adaptation.
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