Germany and Poland are pressing for EU budget negotiations to be concluded as quickly as possible. For Poland, the primary beneficiary of the EU’s cohesion policy, there is a great deal at stake. Germany hopes the negotiations will finish before it takes over the EU presidency next July. EURACTIV Germany reports.
“We fear that there will be a major investment gap, such as the one that has arisen since 2014. That would have very negative consequences for our regional policy,” Polish Investment and Development Minister Jerzy Kwieciński said in Berlin on Wednesday (11 September).
Kwieciński does not think that negotiations will be concluded under the Finnish Presidency.
According to him, Croatia, which will hold the EU Council presidency after Finland in the first half of 2020, would not be able to cope with the complex negotiations alone, since Croatia is a small country with insufficient resources. The Polish minister said he would rely on Germany, which is set to take over the presidency afterwards.
“I can only say to both countries: please work well together”, he added.
Contacted by EURACTIV, the head of the Polish Economic Institute, Piotr Arak, said that boosting investments is very relevant right now, particularly given the World Bank’s prediction that a global recession is likely in 2021.
“Germany has committed itself to zero growth, which is sending the wrong signals. We now urgently need economic impetus,” Arak added.
The German government hopes that it will not be given the responsibility to conclude negotiations for the EU’s long-term budget, the multiannual financial framework (MFF).
Germany is, therefore, pressing for an early conclusion of negotiations, “preferably before the German Council Presidency in 2020,” said Claudia Dörr-Voß, Germany’s state secretary of the economy ministry.
In March, the EU Parliament adopted its opinion on the Commission’s draft budget for 2021-2027. In July, the Council followed with its own position, but issued only a “partial mandate”. The General Affairs Council will meet next Monday. The so-called trilogues should then begin soon, with hopes for an agreement before the end of the year, according to the Council.
Poland wants to become a donor country
According to the European Commission, the EU budget for cohesion policy, which at €352 billion currently amounts to a good third of the EU’s total budget, should be cut.
For Poland, this could mean a 10% cut and Germany is already preparing for a 20% cut.
In the next fiscal period, Poland is likely to be by far the most profitable country with €72.7 billion coming from the structural funds. By comparison, Germany will receive €17.6 billion from these.
“Cohesion policy plays a major role for Poland. It has brought about far-reaching structural reforms and brought our country far ahead economically,” said the Polish minister.
“We also want to become a donor country in ten to 15 years,” Kwieciński added.
One could talk about 10% cuts, as long as these only correspond to the financial shortfalls linked to Brexit. However, according to the minister, “it looks like the cuts will go beyond that.”
The budget for cohesion policy is being reduced by €47 billion, of which only around €11 billion can be attributed to Brexit. Instead, the Commission wants to pour €25 billion into an “instrument to support structural reforms”.
The money pot is intended to stimulate reforms in the member states’ fiscal, tax and labour market policies and thus tie their policies more closely to the European Semester.
No ‘watering-down’ of the EU Commission’s proposal
Asked by EURACTIV about what his country thinks of the proposal to link the EU’s cohesion policy to conditions related to the rule of law, Kwieciński said:
“We support the EU’s new priorities, such as migration and internal and external security. This is as long as they do not go at the expense of the EU’s cohesion policy. But the problem with the rule of law is: who checks it and according to which authority?”
The Polish minister also highlighted that the Commission would not be a neutral body if this were the case.
The Commission had proposed to introduce new criteria for the funds that go towards regions, which would go beyond the income per capita criteria. These include youth unemployment, educational attainment, climate protection measures and the admission of migrants.
According to German state secretary Dörr-Voß, Germany stands behind such a proposal even if all regions would continue to be entitled to EU funds.
“We hope that the proposal on the financial framework will pass through the trilogues without being watered-down too much,” Dörr-Voß said.
[Edited by Zoran Radosavljevic]