Piotr Serafin is Poland's secretary of state on European Affairs. He previously was deputy head of Cabinet for Janusz Lewandowski, EU Commissioner for Financial Programming and Budget.
He spoke to EurActiv Poland’s Karolina Zbytniewska.
Poland is allocated €105.8 billion under the agreement reached at the level of EU heads of state and government. Jacek Saryusz-Wolski (MEP, Civic Platform) and Bartłomiej Nowak (Centre for International Relations) agree that this budget is “good for Poland but bad for EU”. What is your opinion?
We need to take into account the difficult context, in which the negotiations took place. It is the context of Europe in crisis, Europe in recession, whose public debt has risen significantly since 2005 when the last budget was being negotiated. It seems to me that in this budget agreement there are many pro-European arguments that will win acclaim also in the European Parliament.
Neither cohesion policy nor agricultural policy are the areas in which there is growth in allocated resources. The real growth takes places in the programmes which are horizontal, where there are no national envelopes. That is why the real growth occurred in research and development [and] Erasmus.
For the first time we also have a financial instrument that will be used to finance energy infrastructure. Until now it has been taking place marginally – the Trans-European Energy Network project had a yearly budget of €20 million for years 2007-2013 while European Economic Recovery Plan also had a small budget. Therefore I think that in a new budget project there are many arguments in favour of its approval, especially when recession in Europe is taken into account.
Isn’t it a problem that the commitments were set at €960 billion, €54 billion above the planned payments – the actual sum of money to be spent?
I see the problem with the payments, but I think that it should not be exaggerated. The level of payments is also lower than some member states wanted it to be. Poland also wanted it to be higher than the current €908.4 billion agreed by the Council.
What solution in this matter will be the best for EU?
I would look for solutions in flexibility, that is, the possibility of moving the unused funds from one year to another. That is the area where European Parliament can play a positive and constructive role.
Coming back to your question whether the budget is good or bad for Europe, I believe that taking into account the circumstances in which Europe is now, it is the best budget possible, with the potential of altering it especially when it comes to flexibility.
What can be the negative implications if the European Parliament vetoes the budget in its current shape?
Europe without a budget is in a much worse situation than Europe with a budget. Europe needs a budget, especially now, when many countries are fighting the recession or are on the verge of it. That is why we need to create foreseeable conditions for investment, also by community instruments. On a community level the EU does not have too many such instruments at its disposal.
Lack of budget and the scenario of provisional budgets, I think, is a bad scenario because it does not guarantee the predictability of investment, which needs a multi-annual horizon.
Will a possible veto from the EP be really constructive and address the elasticity and predictability mentioned before, or will it also be a demonstration of power of the MEPs?
The next weeks will be the time for a constructive debate on how, in this difficult moment in which Europe is now, we can improve the agreement. We must concentrate on how to provide Europe with [predictability] for investment and how to improve the instruments.
It would be really bad if European budget fell victim to the inter-institutional games. I don’t think it lies in EP’s interest.
How can you describe Poland’s net benefits?
During these negotiations we have been stigmatising ‘net’ category – both in negotiations with our partners in the EU and in the internal debates. When it comes to net categories, I can only say that I know five methods of calculating it, and presumably there are more. None of them says anything about the benefits of being a part of the EU.
I admit that our contribution to the European budget will be higher than in the years 2007-2013, but it is the proof that Poland is getting richer. It is a fair approach. Richer countries contribute more to the budget and Poland is richer than seven years ago. In the same time the budget agreement, especially in terms of cohesion policy or agricultural policy, is so good for Poland that we do not have any problem with the increase of our contribution.
How big will our contribution be?
According to our estimations – the EC estimations are more modest – it will be around €30 billion for 2014-2020. It is a bit more than in a current perspective because the whole budget was reduced. As I said before, we are not happy about it.
MEPs want to review the budget around 2017 if the crisis wanes. Do you agree with that?
If the budget review in 2017 resulted in the bigger budget, I would have nothing against it.
What is essential in planning such a review is, firstly, not to disturb the predictability of investment, especially in the programmes that require a multi-annual horizon. It is important from the point of view of self-governments, companies, R&D units, because it gives predictability. Budget review cannot lead to the reduction of the budget.
Secondly, we need to take into account the elections and referendums in member states. Budget debates are destructive and hard and we should not multiply them. The worst instincts appear in them, thus they can be a battlefield of national interests.
I fear that, because of the planned referendums, even if the economic situation improves, it won’t be a better time to discuss the EU budget. On the other hand, it would be a bad idea to become a hostage of the referendum debate in the UK.
There will be strict criteria for granting funds, stricter than now. For example, there will be budget implementation reviews in 2016 and 2019. How will we deal with spending the funds, and will we go through these reviews?
We all agree that European budget and cohesion policy should serve to promote growth and increase competitiveness. We don’t have to worry in the areas where criteria of granting the funds constructively regulate the possibility of achieving these goals.
We can argue about the details and I think this will be one of the topics during the negotiations with the EP, especially when we talk about the macroconditionality mechanism in the cohesion policy. When it comes to this idea as such, also on the European level, we need to adopt some measures so that cohesion policy will serve growth and competitiveness.
I can add that Poland was supporting such an approach and we are possibly the first country to introduce in the current framework the so-called enforceability reserve principle. It means that some of the funds were not allocated and were waiting for the regions which spend their envelopes in the best way. Thanks to it, the best could count on additional funds. This principle has become a part of current agreement and will be applied in all member states. In Poland it has been applied perfectly so we have no worries here.
When it comes to 2016 review, won’t there be any attempts to reduce the budget and shift some funds to the eurozone budget, which will be operational by then?
I don’t think so. It is still not sure whether the eurozone budget will have been created by 2016. Even if it will have, it will be most probably a modest instrument, oriented towards achieving specific goals connected with contracts to carry out structural reforms.
What is the value of multi-annual financial frameworks is that we programme for many years and we provide security for all investment programmes. The idea of undermining this principle will require unanimity and Poland will not be the only country to oppose it.
How will the possible future accession of Poland to the eurozone change the situation?
From the Polish point of view the question is not if to join the eurozone, but when to do it. Poland does not want to be on the peripheries of European integration but in the centre of it.
Accession to the eurozone should be well prepared – on both sides. Lessons from the crisis should include economic policy, structural reforms introduced in the eurozone candidate countries. Maastricht criteria are not enough.
It will be a difficult and lengthy process, the implementation of which will require public support. We should remember that for the last three years there have been only bad news coming to Poland and to the eurozone voters, so the public support has significantly decreased, both in Germany and in Poland. I think that the turning point in the debate about Poland joining the eurozone will be the moment when growth appears. Predictions indicate that it may happen yet in the second half of the year.
What was the key of the successful Polish negotiations?
The Polish negotiation strategy was based on some assumptions. First of all, we needed to act not against but along with EU institutions – with Commission, President Van Rompuy, the European Parliament.
Secondly, we were aware that – especially in terms of cohesion policy – to conclude negotiations on cohesion policy with an outcome favourable for Poland, we needed to change the narrative, which was still present in the European discourse two, three, four years ago, that cohesion policy is a policy of the past that does not provide solutions to the crisis but can even deepen it. The example of Poland proves otherwise and I think that changing the narrative was essential for the atmosphere around the cohesion policy in Europe.
Thirdly, we concluded that the key to the success in negotiations will be the formation of the broadest group of states possible, the so-called coalition of friends of cohesion policy, that will jointly seek a substantial European budget, especially in terms of cohesion policy. We have managed to participate in this front for the last few months.
Budget proportions remained largely the same but they slightly changed. Previously 36% of budget was allocated for cohesion, now – 34%. In comparison, 42% was agricultural policy, now it’s 39%. How will the remaining 5% be spent?
For the Erasmus programme, for research and development. Although the sums allocated for R&D are less than in the Commission’s proposal, they are sill more than in the 2007-2013 framework. We have the Connecting Europe Facility, which was heavily cut, but its most valuable elements remained. The Facility is a breakthrough tool, not only because of money, but also because it will be building a new dynamics of infrastructure investments in the area of energy. They will complete the common energy market, financing of transport investments will also increase.
What will it mean for Poland and our region?
When it comes to energy infrastructure, I hope Poland will participate in some projects. I think the key issue in the coming years should be breaking the energy isolation of the Baltic states. Connecting Europe Facility should promote it.
We should determine which projects can be used to break the current energy isolation in practice. We think that one of them should be the project of the gas interconnector, in which we are ready to participate. The Commission suggests that such a connection be built between Poland and Lithuania. It would grant us access to gas storage facilities in Latvia. We can also build a LNG terminal in Finland or Estonia.
There is also a chance that we will implement a second phase of the “energy bridge” between Poland and the Baltic states - LitPol LINK 1. When it comes to energy, I am confident. I am equally confident when it comes to transport because in this area there are also some advanced discussions going on. These are cross-border road projects and railway projects. We can do it.