Financial Solutions for a New Budget and a New Europe
Investing in Europe, Investing in people – A progressive future EU financing, based on solidarity, economic and sustainable development – this is what we want.
The EU budget, a concern for everyone! We should:
• Reaffirm the will of the S&D and its sister organisations to achieve an ambitious and higher EU budget in the next Multiannual Financial Framework
• Make the S&D family work together on the future of the EU and its funding
• Bringing the EU budget closer to citizens, which means strengthening its relevance and its visibility
An EU budget based on genuine own resources! We should:
• Prioritize EU own resources as the primary revenue stream instead of the national contribution by Member States• Give incentives instead of sanctions and exclude contributions to the EU Budget from the deficit calculations under the Stability and Growth pact. Members States need to be encouraged and not deterred to invest in the European project
• Put an end to all rebates and abandon the national “juste retour” logic
Toward new EU own resources! We should:
• Insist that the implementation of new EU own resources remain the only option to adequately finance the MFF• Create a new own resources system with the introduction of new genuine own resources and an increase of the own resources share to at least 50% of the EU budget to provide fairer and more stable EU finances
• Establish new own resources to feed the EU budget though a Financial Transaction Tax, an EU tax on multinational corporations based on a Common corporate Tax Base, a carbon EU tax, etc.
A future Multiannual Financial Framework post 2020 with an adequate level of financing! We should:
• Break the 1% of the EU’s Gross National Income (GNI) ceiling for expenditure of the EU budget and significantly increase it even over 1.23% of the EU’s Gross National Income (GNI).
• Ensure that additional political priorities shall be linked with additional financial means and not be financed to the detriment of existing policies
• Promote the S&D sixth scenario for the future of the EU to be included into the next Multiannual Financial Framework
A new cohesion policy: investing in Europe, investing in people! We should:
• Strengthen cohesion policy that put human capital first
• Ensure an EU support for all regions with a stronger budget to build EU-wide answers to the global challenges
• Build a cohesion policy on simplification, based on quality and progress and that takes into account the social, environmental and economic dimensions
A new innovative toolbox for the next Multiannual Financial Framework post 2020! We should:
• Reform the headings of the EU budget to better reflect the political priorities of the EU’s future, such as growth & sustainability, solidarity and security & defense
• Render the EU budget more readable and understandable for managing authorities, project promoters and EU citizens
• Increase the flexibility and adaptability of the MFF to cope with new challenges and priorities that arise;
• Ensure that the European Parliament and the citizens are fully involved in the decision-making process of the next MFF
• Simplify the financial rules for the benefit of European citizens
“Financial Solutions for a New Budget and a New Europe” is one of the priorities part of the “Building the Progressive Future Together” statement, debated during our event in Brussels on October 18-19. But the debate goes on. We’re counting on your input, so each of you can play a part in shaping our common future. It’s easy – just sign in add your thoughts to this topic.
To reduce tax evasion, a system for returning part of the VAT back to the population could be set up. Under these conditions, every person who would buy something would ask for a tax bill to get a part of the VAT back.
Europe is facing three main financial problems: first, the EU Budget is still too much dependent on national contribution; second, the solidarity principle is still very strong in theory, and too weak in practice; third, the EU Budget is still too little compared with the EU functions. The best way to tackle those problems is having an even closer European Union, in which the ECB coordinates its monetary policy with a European Minister of Finance in charge of fiscal policy, and so able to increase or decrease certain taxes in the Member States and to redistribute money in the Member States through effective economical policies. In this way, the EU Budget would became more independent, the solidarity among the Member States would became real and the EU Budget, if needed, would grow. With an EU Minister of Finance, it would be also possible to tackle the accountability problem, that affects the entire European Union.
Α progressive proposal for the EU budget is something that EU citizens have been waiting for long, especially those who are on the sidelines and do not feel that the Social Democracy can provide solutions to their everyday problems. A proposal, which differs from the existing logic of savings and cost cutting, should focus on three main axes. First, EU should invest in areas where the union has a competitive advantage in the international chessboard. That is to increase funding and investments in R&D, the digital and creative economy. The value that is produced in these sectors will have a long-term horizon and will create more jobs than trying to increase productivity in saturated sectors. Such investments could be funded by a single system of a tax in the Financial Capital; as long as it will not stop the development of the open economy. Secondly, the budget should focus and produce new tools that will ensure social cohesion. The Junker package is a step to funding major projects to develop a single union. We are much more in need of projects to fund programs with a focus on social cohesion and local communities. These should be provided through funding tools that ensure that North and South have equal growth. This is, moreover, a debate that is missing from today’s agenda. Lastly, but equally important, the union should define what a cyclical economy means and set specific goals for the sustainable development of each member (e.g. sale of renewable sources energy from South to North. These investments can be funded either direct from the European budget or the European Investment Bank and stems from the recycling of trade surpluses within the Union)
This statement has great potential. Unfortunately, this statement is vague and inaccurate. In order to make a dry topic like the EU budget more understandable for citizens but, at the same time, lay down strong demands and priorities, my suggestion for this statement is:
“Financial solutions: a new budget for a new Europe
Investing in Europe, investing in its citizens – Socialists and Democrats in Europe want an EU budget that works for people, putting them front and centre of the EU’s sustainable development. For that reason, the Socialists and Democrats in Europe want:
· An EU budget that delivers:
– The Multiannual Financial Framework post-2020 must not be reduced. Citizens in the EU demand greater alignment between their needs and EU action. In order to be able to deliver to those ambitions and to new priorities, the European Union must maintain or increase the size of its long-term budget.
– Not only does the EU budget need to be oriented to delivering to citizens, but also to let citizens know it does. Increasing the visibility of investments made under the MFF should be a priority in both EU institutions and EU Member States’ communication and outreach strategies.
· An autonomous EU budget:
– Currently, up to 80% of all contributions to the EU budget depend on Member States. In order for the EU to be autonomous in its investment decisions and to be freed from political battles among its members, the EU budget must have capabilities to get own resources.
– There are policies that are mostly developed and implemented at the EU level, such as trade or the Single Market. The EU budget should make use of these policies in order to obtain resources to fund its action. For example, by introducing border taxes to products coming from markets with lower social and environmental standards.
– Depite this, Member States’ contributions will still be important. However, all rebates and adjustments of national contributions should be ruled out. This move will ensure a fair distribution of efforts between those in a more advantageous economic situation and those who need more support in order to raise their living standards.
· An EU budget for sustainable growth and welfare.
– Currently the MFF has numerous limitations when it comes to fostering sustainable growth and welfare. The next EU budget should phase out all fossil fuel subsidies and instead divert those valuable resources to ensuring a just transition for workers employed in sectors such as coal mining, energy-intensive industries and high-carbon manufacturing. Our future can only be bright if we provide new opportunities for all.
– Public funds must be used in order to trigger investments that would not happen otherwise due to perceived risk. The EU budget is estimated to generate €15 for every €1 spent. Therefore, public investment must be fostered, not hampered, by avoiding productive investments with public funds to be accounted as public deficit under the Stability and Growth Pact.
– Make sure at all institutional levels that sustainable development and fighting inequalities are streamlined in all policy areas and projects to be funded with EU funds.
· An EU budget for social convergence.
– Cohesion policy is one of the most important investment policies of the EU, but it is sometimes too focused on macroeconomic indicators and leaves behind social and environmental considerations. There is a need to ensure cohesion policy remains strong but becomes more efficient and well-targeted to support sustainable development and social convergence.
– Open cohesion funding to all regions with a specific focus on those with lower economic development, outermost regions and cross-border regional development. Sustainable development and social convergence must underpin all investment decisions.
– Foster the exchange of ideas and experiences between regional authorities with the support of the Committee of the Regions, establishing more twinning programmes to share best practices in sustainable development and circular economy, social convergence, migration and diversity or education and innovation.
· A simpler, cleaner EU budget.
– Develop an EU budget with deeper harmonisation of requirements across financial instruments. A single rule book should govern the criteria for projects to be eligible for EU funding under the main programmes. This rule book should prevent investments in fossil fuels, hard-line management of migration and diversity or other projects that might be counterproductive to EU policy objectives and incentivise those investments in productivity, social cohesion and sustainable development.
– Ensure the principle of budgetary unity by bringing financial instruments outside the formal MFF into the EU budget structure. The single rule book should also be applied to instruments like EFSI, with high capital mobilisation power. This will not only ensure greater coherence and efficiency across instruments but will also allow for parliamentary oversight.
– The EU budget must have a clear alignment with EU political objectives, accompanying its long-term goals with robust financial support. On the other hand, the EU budget must also count with crisis-response mechanisms that allow for flexibility in order to cope with unforeseen events. Striking the balance between long-term stability and shock-response thus become essential in the MFF post-2020.
– Provide technical assistance for managing authorities to better understand those provisions and requirements to use EU funds for projects. The European Investment Advisory Hub must provide support to local, regional and national actors to develop project pipelines that are both attractive to investors and eligible for EU funding. Civil society organisations and other stakeholders will play an essential role in developing this work with a bottom-up approach”.