2018 is the year for the Commission to draft and negotiate the next multiannual financial framework starting on 1 January 2021 for a 7-year period.
Commissioner Oettinger is working with his team and with the involved Commission services to present the proposal officially to the Member States in May 2018. In the first working week in January a conference with the involvement of the Member States’ highest political level took place in Brussels to set the scene.
In what political context will the MFF be drafted and discussed this time?
Contrary to the last MFF which was negotiated in the context of the economic and financial crisis now we are in a completely different situation. Europe’s economy is growing and the unemployment rate is the lowest of the last 10 years. However, we are facing a different political context worldwide with the Brexit and US President Trump. Moreover new political challenges have appeared on the EU’s political agenda which can only or better be solved at the European level such as migration, securing the external borders, fighting against terrorism and a common European defence policy. The Brexit vote and Trump have given a boost to the latter. French President Macron has indicated his will to launch necessary reforms and to reinforce pro-European forces together with Chancellor Merkel. In addition, 2019 will be a year when important elections and political changes are going to take place: the Brexit will happen on 29 March 2019, the European Parliament will be re-elected in May/June and a new Commission will take office in autumn. Thus, for the first time in the EU history an MFF has to be negotiated during the election campaign of the European Parliament.
What is the financial context?
The Brexit will leave a net revenue gap of 12-14 billion Euros per year (consistent with estimate made by the UK). Commissioner Oettinger proposes to close this gap with 50% budget savings and 50% additional resources from the Member States.
Moreover, the above mentioned new political challenges need to be financed. Commissioner Oettinger stated that these should be born to 80% by additional money and to 20% by cuts.
Generation 2004 expects that the Brexit will have an impact on heading V of the budget which covers the administrative costs. Let us not forget, in the last 5 years the Commission reduced already the number of staff by 5%. If there will be pressure for further staff cuts because of the Brexit there should be moderate savings only in the second half of the budget period after 2023 – according to the Commissioner. The message to the Member States is thus: “Let us continue to work with the same number of staff for a couple of years. “
Nevertheless, the Commissioner has recently invited the staff representation to submit proposals with regard to heading V of the future Multiannual Financial Framework. Our (rather sad) experience after having gone through 2 reforms of the Staff Regulation in a decade is that we should not be naïve and think that heading V will increase while the rest of the budget is being cut. Generation 2004 is thus reflecting on what/whether concessions would be acceptable to the staff when it comes to budget saving proposals.
Colleagues who started in the Commission after 1 May 2004 paid already a high contribution to budget savings through lower entry grades which led to much lower salaries, through the unfavourable pension rights acquisition and the growing number of Contract Agents with lower salaries.
Whatever savings at the end might be proposed by the Commission Generation 2004 stands for proportionality, i.e. those colleagues with higher incomes must contribute to the savings to a higher extent than those with lower incomes. We are working now to specify this.
The new philosophy of the next budget
Commissioner Oettinger but also representatives of the European Parliament keep repeating that the added value of EU spending will be crucial when defining the areas of savings. There should be no cuts for research expenditures (Horizon post 2020) and the Erasmus+ programme. There will be most likely modest cuts in cohesion and agriculture policy. President Macron declared already that he will not maintain defending with all means the EU agriculture policy which was defended by all his predecessors so far.
Therefore, no Euro from the EU budget should be spent without a proven European added value and at the same time the EU budget must be more efficient and targeted to the new political challenges. Currently, the Member States contribute 1% of their GDP to the EU budget. Commissioner Oettinger asks for 1.1x % which is a slight increase for each Member State but a significant one at European level. His example is: from 100 Euros earned by an EU citizen 50 Euros go to the national budget, for taxes, social security and insurances. But only 1 Euro goes to the EU to Brussels.
Voting procedure for the MFF
The main difficulty in approving the next MFF is the unanimity in the Council of 27 Member States – Commissioner Oettinger said. While in the European Parliament a majority is sufficient the Member States must vote for it unanimously. “It will be difficult but not impossible“– Mr Oettinger pointed out. It will not only be about money but the Heads of State and Government must demonstrate good governance and flexibility. Even when the MFF negotiations go together with the EP’s election campaign the MFF must be the priority. It is the responsibility of democrats to demonstrate the capacity to act and take decisions – the Commissioner highlighted. He promotes the idea that the MFF must be approved in May 2019 in Sibiu during the Romanian presidency in order not to delay the start of many EU co-funded programmes.
We will keep informing you in our newsletter about the discussions in the coming months and we will consult with our members as soon as we have a reasonably solid position.
