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26/09/2016

Parliament wins on Juncker Plan cuts

EU Priorities 2020

Parliament wins on Juncker Plan cuts

Jean-Claude Juncker

[Euranet Plus/Flickr]

EXCLUSIVE / The European Commission has agreed to cut less from the Horizon 2020 and the Connecting Europe Facility programs in the Juncker Plan. EurActiv France reports.

The Commission, which had presented its signature plan for investment for Europe in November 2014, gave in to MEPs, who charged that the cuts were too large.

“In trialogue, we will reduce the financial impact of the Juncker Plan on Horizon 2020 and Connecting Europe” confirms a source close to Juncker. More than €500 million, which was initially meant to be taken from these programs, defended tooth and nail by lawmakers, will instead be taken from elsewhere: the Commission’s contingency budget.

Common Ground

Brussels’ concession is “peanuts”, according to Socialist MEPs, “yet it has the merit of going along with the Parliament’s approach. This could thus become a basis for compromise, if it is improved upon”, the Socialists explain in an analysis of the Commission’s proposal.

In order to come up with the €315 billion, the European Commission had in effect decided to cut the budgets of the Horizon 2020 research program, and that of the Connecting Europe Facility (MIF), designed to develop transport networks in Europe.

In total, €6 billion was meant to have been trimmed from these two programs to constitute a major part of the guarantee supplied by the EU to the European Fund for Strategic Investments (EFSI), the leading part of the Juncker Plan.

However, the envisaged cuts for these programs, debated at length, and voted on by MEPs, provoked an outcry during the review of the proposal by a parliamentary committee.

The Commission’s hard line approach to the financing of the Juncker Plan thus softened during the trialogue. In the document, Brussels evokes the possibility of taking €522 million from the margins of the European contingency budget

Horizon 2020 will thus see its cutback reduced by €321 million, while that of the CEF should be trimmed by €200 million.

Question of governance

The issue of governance, central for MEPs, has also progressed. Worried about having no input over the selection of projects that will benefit from the Juncker Plan, MEPs demanded the right to scrutinise the nomination of the future director of the EFSI.

“When we saw the list of projects that the EIB wished to finance, included Dubrovnik’s airport, we became worried over the manner that the projects were going to be chosen,” explained Isabelle Thomas, the French MEP (S&D).

Negotiations

Yet the negotiations remain far from finished. “A new trialogue will be held on 26 May, during which we hope to come to an agreement so that we can pass, as planned, the Juncker Plan during the Plenary session in June,” said Thomas.

However, a possible deferral of the vote until July, before the summer break of the European Institutions, is far from being ruled out.

Background

The Juncker Plan – unveiled late last year – aims to create a new European Fund for Strategic Investments (EFSI), with €5 billion coming from the European Investment Bank (EIB) and an €8 billion guarantee from existing EU funds designed to secure a contribution of €16 billion in total from the institutions.

The €8 billion guarantee will come over a three-year period from the Connecting Europe Facility (€3.3 billion); Europe’s research programme Horizon 2020 (€2.7 billion) and so-called “budget margin”, or unused funds, worth €2 billion.

The resulting EFSI fund totalling €21 billion is expected to generate €240 billion for long-term investments and €75 billion for SMEs and mid-cap firms over the period 2015-2017.

This fifteenfold multiplication from the initial investment to the final amount is to be achieved through a series of leverage methods, according to the EU executive.

Timeline

  • By mid-2015: new European Fund for Strategic Investments to be operational
  • By mid-2016: Commission will review progress of the Juncker Plan including at the level of Heads of State and Government

Further Reading

EU Institutions