The Luxembourg Minister of Finance and President of the Ecofin Council, Pierre Gramegna, attended the plenary session of the European Parliament in Strasbourg on 27 October 2015, in order to participate, on behalf of the Council, in the debate on the amendments which the Parliament is preparing to vote on the Council’s position on the European Union’s (EU) 2016 draft budget. This position, which provides for €153.27 billion in funding commitments and €142.12 billion in payment allocations was presented by Pierre Gramegna to the European Parliament on 8 September 2015. In its draft resolution presented on 16 October 2015, the Parliament intends to increase funding commitments by more than €4.15 billion and payment allocations by almost €4.34 billion. An approach which Pierre Gramegna deems to be “maximalist and ambitious in the extreme”.
The Council’s response to the European Parliament’s draft resolution
Pierre Gramegna hailed an “excellent institutional cooperation” and a “relatively favourable and serene starting point”, which enabled the adoption of “seven and soon eight amending budgets before the start of the conciliation procedure, as well as a payment plan to reduce arrears”. But he pointed out that the Parliament “intended to vote on a position which would considerably increase the draft budget presented by the Commission", with a difference of more than €4.15 billion in funding commitments and almost €4.34 billion in payment allocations.
The Minister deplored the fact that the European Parliament’s approach is “maximalist and ambitious in the extreme” and indicated that the two special instruments which Parliament makes reference to in its resolution, namely the Emergency Aid Reserve and the Flexibility Instrument, would not be enough to cover the excess in funding commitments which the Parliament hopes to see in 2016.
The Minister highlighted the fact that, although the Commission had reviewed its 2016 draft budget upwards in a letter of amendment of 14 October 2015, proposing to strengthen the multi-annual financial framework (MFF) in response to the refugee crisis, Parliament’s amendments still diverged by €2 billion in payments and by €2.5 billion in commitments.
Recalling that the EU will have to face some “major political and historical challenges” in 2016, Pierre Gramegna pointed out that although the appropriate budgetary resources were going to have to be provided, the MFF’s budgetary resources were not unlimited and not everything can be a priority. “It is our duty as a budgetary authority to identify the real priorities and to provide for sufficient margins for manoeuvre in the case of unforeseen events”, he said. The Minister again appealed for redeployments and for the best use of flexibilities.
The European Parliament’s amendments
Pierre Gramegna then returned to the amendments which the Parliament is preparing to vote on in the plenary session on 28 October 2015.
On the subject of the European Fund for Strategic Investment (EFSI), the Minister revealed that the European Parliament wanted to “go backwards” and that this was regrettable. Indeed, MEPs want to restore the “Horizon 2020” and "Connecting Europe Facility" lines, which contributed to financing the EFSI guarantee fund (€1.3 billion in commitments and €442 million in payments). This point had already been raised by the two rapporteurs, José Manuel Fernandes (PPE) and Gérard Deprez (ALDE), during the presentation of the Council’s position on 8 September 2015.
In terms of the advancement measures of structural funds programmes for Greece, the Minister recalled that the Commission had indicated on several occasions already that these measures could be covered by the allocations provided for in the 2016 budget and the 2015 budget. “Yet, Parliament is preparing to vote on amendments which – despite the Commission’s instructions - would increase this sub-section by more than €1 billion in payments and about €500 million in commitments”, pointed out Pierre Gramegna. “It is not very logical”, he said.
With regard to the Youth Employment Initiative, the Minister regrets that the Parliament, by adding nearly €500 million in commitments, is not taking account of the joint decision to focus the commitments on 2014 and 2015. He specified that, in 2016, there will indeed be payments for this “politically significant initiative”, but that the financial programme did not provide for more commitment. The Minister called for a detailed review of the evaluation which will be carried out by the Commission before deciding what would happen with this initiative after 2016.
In terms of agricultural spending, Pierre Gramegna referred to the Parliament’s proposal to increase measures in the dairy sector by €500 million, with the Commission having just presented an agricultural letter of amendment which updates real needs as well as the revenue allocated to this sector and even proposes a decrease of €477 million in commitments and payments in relation to the 2016 draft budget.
Finally, with regard to the administrative expenditure of European institutions, Pierre Gramegna recalled that the Council accorded “great importance” to the objective of a 5% reduction in staff in all institutions, bodies and agencies appearing in the table of staff numbers as at 1 January 2013 over a period of five years.
The Commission's response
The Vice-President of the European Commission and Commissioner for Budget and Human Resources, Kristalina Georgieva, declared that she was aware of expectations with regard to the European budget. She recalled the need for cooperation between the three institutions in order to define priorities and ensured that funding would go where it was needed. “We need to anticipate, be flexible, agile and be able to provide assistance where necessary”, she explained.
More specifically, the Commissioner indicated that it was necessary to give greater priority to the refugee crisis and, to that end, to use the flexibilities available to us as much as possible. On this subject, she recalled that, in the letter of amendment of 14 October 2015, the Commission had made a number of amendments to its initial draft budget in order to anticipate what was going to happen in this context in 2016.
The response of the rapporteur of the European Parliament
José Manuel Fernandes (PPE), rapporteur for the Committee on Budgets (BUDG), indicated that he believed his institution's proposal to be "realistic, responsible and credible". "The European Union must be up to the challenges which it faces, it must fulfil its task and produce results", he said. He underlined the fact that the Parliament's proposal takes account of the capacity to absorb budgetary lines, the interest of the programmes and policies which have been defined.
The rapporteur again recalled Parliament’s priorities with regard to the budget: employment, competitiveness, support for SMEs and a reduction in bureaucracy. He regretted that neither the Commission nor the Council are prepared to commit more allocations which would allow the Youth Employment Initiative to be continued. “We are going to continue to fight for funding to be allocated to these goals", he said.
Finally, José Manuel Fernandes called for greater internal solidarity and more resources in order to strengthen external solidarity, in particular in order to tackle the refugee crisis.
After the vote on the amendments by the European Parliament on 28 October 2015, a 3-week conciliation procedure will commence on 29 October 2015 with a view to reaching an agreement between the Parliament and the Council on the draft 2016 EU budget.