Organised by the Group Europe of the Union of European Federalists (UEF) for the staff of the institutions of the European Union, the conference could give comfort to pro-Europeans while discussions on the budget for the period 2013-2020 have just begun with the proposal from the European Commission. Chairman of the Budget Committee in the European Parliament, Alain Lamassoure had spoken in the week before the conference in many media to clarify issues in the coming budget talks. The conference allowed him to clarify these hopes and ambitions.
C. VIEILLEDENT, Secretary General of the Group Europe of the UEF, recalled that the UEF Federal just adopted a resolution on a Policy for Growth and Solidarity and gave its support for the joint report by Jutta Haug, Guy Verhofstadt and Alain Lamassoure "Europe for Growth". She summarized Alain Lamassoure’s political career combining successive and simultaneous positions of responsibility at local level, at the national level as Minister of European Affairs and Ministry of the budget in the 90s and finally, at the European level as an MEP for several terms. Mr. Lamassoure has long advocated moving away from the diplomatic approach, and the logic of "juste retour" so as to receive the long due dividends of Europe. AL today invites us to open a narrow path between short-terme fiscal discipline and investment for tomorrow. The challenge is very likely to be ensuring that "the present does not kill the future."
"The Federalist Ideas are winning" ... but you have to be patient
Lamassoure called upon the Federalists to be patient and not be trapped by the short-term and dramatic vision of events. At the institutional level, AL, member of the Convention on the Constitutional Treaty and editor of the "mini treaty" at the origin of the Lisbon Treaty, says the treaty is a toolkit that we have to use to the full in order to give the Union opportunities and capacities for action for the next decade. The Member States are living beyond their means, but the Union lives well below its own: if it could take full advantage of its political, economic, cultural and diplomatic potential, the EU could then hold its rank and place in the world.
AL invites European players to open a public debate, currently nonexistent, in order to re-engage the Europeans on the concrete action of the Union. In addition, the 2014 elections for the European Parliament, organised according to the Lisbon Treaty, will bring about the first election of the President of the Commission according to the results. European political parties must present their candidate, the media will then follow real face to face confrontations that will establish a genuine debate between the representatives of European organizations.
The lifestyle of most Member States is the cause of the current debt crisis in the European Union. AL calls for an increase of the EU budget because, while areas of expertise have consistently increased and the entry of new member states has accelerated, the EU budget is alone to undergo a real decline.
Union Budget: Making Up for Lost Time
AL recalls that the pledge made by the Member States in the European Council in Fontainebleau in 1984, attended by Mrs Thatcher, to fix the EU budget to 1.24% of GDP. Today that figure is around 1% and the European Parliament is for 1.11% for the period 2013-2020. In ten years, according to AL, the EU budget should reach 1.2% of GDP in order to finance the agenda Europe 2020. Own resources alone are the reason why the EU budget was successful during the first thirty years of European integration.
In the '80s, faced with declining own resources (following the dismantling of customs duties at the international level and lower sales in coal and steel business), Member States had voted for new own resources based mainly on 1.4% of VAT receipts. However, the Member states’ budget departments have nationalised the budget revenue of the Union by turning them into simple contributions (deducted from national income). This is why the negotiations on the EU budget always turn into a rat race where each Member state assesses each policy according to its rate of return and tries to reduce expenses of the Union for which it is not a net beneficiary.
AL then noted this contradiction: the Member States increase the powers of the Union because they see the value of a Europeanization of certain areas, but reduce the EU budget as a share of GDP. The EU therefore is a chronic situation of under-execution of its policies. In order to finally give the EU a substantial budget to conduct ambitious policies, the Budget Committee of the European Parliament has launched three initiatives.
The first initiative is to have new revenue in order to avoid, as in the present situation, voting on the expenditure without voting on the revenues which depend on national governments. There are three possibilities to create a new European tax: the carbon tax, the tax on financial transactions and a share of VAT. Lamassoure noted that the latter possibility cannot be rejected by Member States as it was part of the 1984 Fontainebleau agreement. Thus, national governments have not rejected this initiative as a whole. In addition, the Council requested from the Commission a study on the implementation of a tax on financial transactions across the EU. It is estimated that with the budget unchanged, 1% of VAT receipts and a 0.01% tax on financial transactions would yield about 150 billion euros. Parliament voted in favour in 2007. The carbon tax is part of another program of the Union in the framework of environmental protection.
The second initiative involves the establishment of a "European semester" during which the institutions of the EU verify that the Member States respect their commitment to Europe, both on the limits of the deficit and debt and on the planned investments under Europe 2020 program. This mechanism should eschew the camera talks between the national budget departments if the national parliaments are involved and if they do not just talk of balances, but also of the opportunities for sharing national policies in support of the Agenda 2020 . National budgets, in AL’s opinion, must be opened in the search for areas of synergies which are numerous, including immigration, defense or development aid. This must help do away with the duplication and multiplication of competing structures as there exists also air traffic safety or food safety.
A model of coordination to be reinvented between Member States and EU institutions
The third initiative has more to do with the structures of the European Union. Thus, AL would like a budget Convention, the first step being a major conference on 20 October 2011 to redefine the relationships between the European institutions and Member States, ie governments, public administrations and parliaments. This would further strengthen the idea of a common destiny that is already much stronger than many Europeans imagine it: in the EU, contrary to what happens in relations with the exterior world, national economies are so interdependent that differences balance out (see the effect of the French car scrapping bonus on employment in Romania and on the profits of the industry in Germany).
We need therefore to fight off misunderstandings and misconceptions as there has recently been between Germany and Greece. Moreover, the issue of the Member States’ debt crisis would be a good topic for debate to find solutions collectively. The priority for this kind of meeting would be the transparent and public discussions to get out of talks behind doors. The crisis therefore requires governments to act and recreate a true solidarity among Europeans.
Overcoming the crisis calls for the imagination and AL takes his share by offering a new model of coordination between the different components of the Member States and EU bodies. Indeed, his proposal involves building a bridge between the Community and the intergovernmental methods.
In the ensuing discussion, Andrew DUFF, MEP, President of the UEF Federal, highlighted the strategic nature of the Lamassoure proposal, which are supported by the Polish presidency. The radical reform of the Multiannual Financial Frameworkin question must be made within three years.
Other questions focused on the presidency of the Commission and the 2014 elections that must be the subject of considerable debate. The idea of a report on the cost of non Europe is a good idea. One speaker underlined the European Parliament’s resistance to the dismantling of public instruments and invited the EP to stand firm on this position.
AL said that the Member States (eight of them at least) want to freeze the EU budget until 2020. He believes instead that the current financial perspectives must yield to a new approach after 2013 and that the urgency is for investment to come. It will take teaching and learning for this view to prevail.
The savings on the seat of the institutions, he said, was a political rather than a fiscal issue, as the language regime. He believes that the presentation of real candidates in the 2014 elections will change the game completely and create a true European political arena.
As for the Member States’ economic situation, they must be put into perspective and we should recall the developments in the past decade with a growth rate of 9% in Germany, France 16%, 0% in Italy. Languor necessites a real economic policy for growth and investment, otherwise we will be ruined. 1 euro spent by the EU means 27 euros saved for national economies, he said. And it is urgent to talk and leave off with talks behind closed doors on the financial crisis.
12 July, 2011
Alain Lamassoure, a case for an optimistic federalism
Alain Lamassoure, Honorary President of Group Europe of the Union of European Federalists (UEF) and member of the EPP Group in the European Parliament, Chairman of the Committee on Budgets, demonstrated at a conference July 12 in Brussels why you must be optimistic for a federal structure of the European Union, even if the European construction has nothing to do with the medias’ time or with the time of politics.