Barroso laments lack of shared vision on invesment among EU states
Tackling the eurocrisis will require the right structural reforms and targeted investments, as well as correcting imbalances in public finances the European Commission President, José Manuel Barroso said yesterday (10 January) in Dublin, but he ruefully noted that some member states do not share the Commission’s vision.
Speaking at a joint press conference with Irish Prime Minister Enda Kenny in Dublin at the launch of Ireland's six-month rotating EU presidency, President Barroso said that the time for taking emergency decisions should be over.
“The doomsday scenario of a break-up of the euro area has not come to pass. We have shown the naysayers that we are willing to do all that is necessary to ensure the stability of the single currency," he added.
Barroso insisted that EU governments must not be complacent and lower their guard on repairing the fiscal sector, or pursuing fiscal consolidation. Instead, he urged governments to enact economic reforms and make targeted investments.
“Economies are moving in a much more competitive world and we need to become more competitive," he said. "We need structural reform to adapt in this new environment. It is a pity that not all governments share the priority that the Commission is giving to growth and investment”.
EU budget is an investment vehicle
The Multi-annual Financial Framework (MFF), which EU leaders are supposed to agree at the next EU summit in February, provides the right investments on the European level, Barroso said, lamenting the lack of vision of some governments.
“The initial proposal [on the MFF] of the European Commission has been reduced because some governments do not think the EU should have an ambitious investment plan,” he opined.
“We need discipline, but also solidarity, social, economic and territorial cohesion in Europe. Growth is the key. The question is how to achieve growth and frankly countries with excessive deficits cannot return to growth unless they make painful reforms and targeted investments,” he said.
At roughly €130 billion a year, the EU's annual budget is equivalent to around 1% of the bloc's national wealth, or €244 per EU citizen. The European Commission proposes raising it to €146 billion over the next seven-year period (2014-2020), or €1.025 trillion in total.
However, the latest draft proposal presented by European Council President Herman Van Rompuy capped the figure at €973 billion, or 1.01% of EU’s Gross National Income (GNI), and slashed several budgets—especially those relating to competitiveness, growth and jobs—while others have been increased, such as agriculture and cohesion.
Getting EU countries to agree to an increased budget has been a difficult exercise in recent months, especially at a time when national budgets are under unprecedented strain because of tough austerity packages, some imposed at the behest of the European Commission.
"I know many parts of our societies attribute the current difficulties to European Union level and this is not fair because it was not the European Union that created the problems," Barroso told reporters at Dublin Castle.
“There is a myth that it is the European Union that imposes difficult policies. It's not true," Barroso said, noting that the reason for difficulties countries are facing is excessive public debt created by national governments and irresponsible financial behavior “that happened under the responsibility of national supervisors.”
The European Commission presented on 29 June 2011 its proposals for the EU's 2014-2020 budget – the so-called Multi-annual Financial Framework.
The Commission advocated raising the next budget to €1.025 trillion, up from the current €976 billion. This would represent a 4.8% increase, which is beyond the average 2% inflation recorded in the last decade.
The European Parliament declared in a resolution on 23 October that even the original Commission proposal for freezing the budget at the 2013 level would not be sufficient to finance existing policy priorities in the "Europe 2020" strategy, which comprises the new tasks laid down in the Lisbon Treaty.
- 7-8 February: EU summit on Multi-annual Financial Framework 2014-2020