The day after

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

European countries' flags and the European Union flag fly in front of the 'Louise Weiss Building', the seat of the European Parliament, in Strasbourg, France, 11 February 2020. [EPA-EFE/PATRICK SEEGER]

The EU’s next seven-year financial framework will be the budget that rebuilds Europe or shatters it irreparably. And the current proposal on the table is too far from what we really need, write MEPs Eider Gardiazabal Rubial and Margarida Marques and explain the proposals offered by the Socialists and Democrats.

Eider Gardiazabal Rubial is the S&D spokeswoman for the Budget Committee. Margarida Marques is the S&D negotiator for the 2021 – 2027 Multiannual Financial Framework.

Unprecedented times call for unprecedented measures. For months now, we have been living, working, surviving under extraordinary circumstances that we could not have foreseen at the beginning of this year. Our way of life has shifted, our habits have shifted, our daily routine has shifted, but one thing is certain – our priorities have not,

For the people. This has always been the beacon for our work as European legislators and now, more than ever before, we need to put again the people at the core of our battle. And the strongest instrument we have now in order to mend the social and economic damages of the pandemic is the European budget for the next seven years.

We say it loud, and we say it clear: President von der Leyen, President Michel, this will either be the budget that rebuilds Europe, or the budget that will shatter it irreparably. The proverbial ball is in your court!

The next EU budget will play a crucial role in the social and economic post-COVID19 recovery plan. For this to happen, it must be a strong, capable, comprehensive budget. It must initially answer the need for recovery, after the pandemic, and, in a second phase, it has to address our Union’s political priorities.

True, our main focus now is fighting the virus and its effects. But the time will come when a vaccine is found. We must make sure that on that day after, we are fully prepared with an appropriate instrument to tackle the climate emergency, unemployment poverty, industrial transition, cohesion, digital all these while helping a convalescent economy and States.

And the EU budget can help!

More money, for a better EU-wide response to the crisis

The current proposal on the table is too far from what we really need. As it stands now, this budget is unable to address EU challenges, not to mention it is unprepared to tackle the COVID19 crisis.

Therefore, we ask for a revised MFF proposal which reassesses the priorities in the face of the pandemic and allocates significant resources to build a resilient, inclusive and climate-neutral economy.

A new recovery fund anchored to the MFF should be created. A recovery fund in which the Commission borrows from the capital markets, to be channelled to the member states through the EU budget, through grants. We are talking about trillions of euros!

The European Commission is to present a revised 2021-2027 EU budget proposal on 29 April, considering the social and economic consequences of the pandemic.

This proposal should be ambitious and flexible. This proposal should be an increased budget, in line with the Union’s objectives, the projected impact on EU economies by the crisis and citizens’ expectations on European added value.

Rethinking own resources

Thinking, again, of the day after, we need to have an urgent decision on the important issue of win resources of this budget.

The current mix of revenue financing the EU budget, where GNI contributions make up to 70%, has led to a situation in which the European project itself lacks its own operational legitimacy and is mostly dependent on budgetary decisions taken by member states.

Therefore, we state that new taxes must be introduced, taxes that do not affect the citizens’ budget but become money that all Europeans can benefit from, money that should also be used to finance a European Recovery Plan.

However, as European economies are not what they were a couple of months ago, we must put serious thought into the way forward on this issue. What are our new own resources after the crisis?

As Socialists and Democrats, we have a list of proposals, already debated with specialists, and we are willing to bring this knowledge to the negotiating table. Revenue that could not be raised at the national level must now be raised at the EU level, by means of own resources.

Contingency Plan

If there’s one thing we have seen in the past months, it’s that worst-case scenarios are not to be overlooked.

We have faith in the European Commission and Council’s vision for the future budget of the EU. However, should negotiations fail to render the results the citizens need, we must have a contingency plan. We cannot afford a critical disruption of funds, even more in this pandemic scenario, when people are relying on an EU response.

Furthermore, we reiterate the need for an extra-budgetary Recovery Fund of at least €1.5 trillion, financed with additional, fresh money and big enough in its size to have a microeconomic impact, to help member states invest in the public sector, to boost investment, to help public accounts and public debt.

This Recovery Fund must be introduced under the EU budget, providing an innovative financial instrument, which can be used to borrow money at the markets and issue common debt, backed by the EU budget.

The means of paying it? Future new own resources! Of course, it goes without saying that this new recovery instrument shall be aligned with the principles of the European Green Deal.

The next MFF will definitely not be a ‘business as usual’ type of budget. Nor will it be a tool for authoritarian regimes to benefit from.

It will have clear rule of law strings attached, because if we want the EU to remain exactly that – a Union – we must be ready to think beyond national interests and regional affinities.

We will not forget that the EU budget is first and foremost an instrument of solidarity between member states. And we will fight with all our might to make sure that we have the necessary budget so that Europe gets out of this crisis stronger and more united than before.

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