Poland vows to take up budget fight as EU president

Donald Tusk_Picnik.jpg

The EU's next long-term budget for 2014-2020 will be at the centre of Poland's EU Presidency during the second half of the year, with Warsaw eyeing a bigger share of EU spending, it emerges from the country's programme, unveiled yesterday (31 May).

Poland yesterday unveiled its priorities for the second half of 2011, when it takes over the EU's six-month rotating presidency from current holder Hungary.

The presidency programme, a five-page document, was adopted by the Council of Ministers yesterday (31 May) and was presented to the media in Warsaw by Polish Prime Minister Donald Tusk.

With the last couple of years focused mainly on rescuing the ailing banking sector and preventing a subsequent collapse of public finances, Poland now wants to put the onus on restoring growth.

And the EU's long-term budget for 2014-2020 is seen by Warsaw as the main tool to put Europe back on track.

"The Polish Presidency takes a view that the new EU's budget should be an investment tool serving the implementation of the 'Europe 2020' strategy" for growth, the programme reads.

"If Europe is to be competitive on a global scale, it must not concentrate solely on public finance and limiting budget deficits. Additional action is required," it states.

Farming and regional budget

For Poland, this will mean preserving the EU's generous payouts to poorer regions and guaranteeing a fair amount of money to farmers, in order to finance their "modernisation".

But EU paymasters France, Germany and Britain beg to disagree and plan to limit EU spending in order to reflect the austerity drive currently being undertaken in member states.

At a summit in October last year, EU heads of state and government agreed that "at the same time as fiscal discipline is reinforced in the European Union, it is essential that the EU budget and the forthcoming [long-term budget] reflect the consolidation efforts being made by member states".

UK Prime Minister David Cameron is the staunchest defender of austerity. "From now on, the EU budget will reflect the spending cuts being made by national governments," he said at the time. "This applies every single year from now on, including the crucial 2014 to 2020 EU spending line."

The Commission's proposals on the EU's future long-term budget are expected on 29 June, one day before the start of the Polish Presidency.

Poland's EU Presidency programme is focused on three main priorities:

  • "European integration as the source of growth": Budget, Single Market.
  • A "Secure Europe": Food, energy, defence.
  • A "Europe benefiting from openness": Southern and Eastern Neighbourhood, Western Balkans, Russia and the Doha Round of trade talks.

Yesterday (31 May), the liberal group in the European Parliament, ALDE, called for the the next long-term budget to be agreed in consultation with national parliaments.

ALDE leader Guy Verhofstadt said: "We have asked the Polish Presidency to open up the public debate on the purpose, scope and direction of the [Multi-annual Financial Framework] at EU level, by introducing a conference on the future funding of the Union, which would involve the participation of national parliaments. They [the Polish] have responded positively to our suggestion."

Polish European minister Mikolaj Dowgielewicz told EURACTIV: "It is during the Polish Presidency that the budgetary talks will kick-off. We are aware that we will not conclude them but we will influence its direction. We will lead the debate in the name of the entire community taking into account its needs and challenges ahead. Poland will be impartial and an honest broker in this talks."

The size, structure and priorities of the EU's annual spending, which amounted to roughly €130 billion in 2010, are governed by the 'Financial Perspectives', which cover the period 2007-2013 (see EURACTIV LinksDossier).

Negotiations on the next multi-annual budget are due to start in earnest in 2011, and will cover the period 2014-2020.

The most controversial issue of the review is the current 44% (€55 billion) share of the budget that is set aside for agricultural subsidies.

On 19 October, the European Commission listed a number of options to fuel the EU's future budget, proposing that Europe decreases the share of spending that comes directly from its member states.

To compensate for the shortfall, it proposed introducing an EU tax which could take several forms: a tax on air transport or a share of new financial, corporate or energy taxes, as well as an EU VAT.

More recently, European Commission President José Manuel Barroso offered to put on the table in June 2011 concrete proposals for "own resources" in the long-term EU budget.

  • 29 June 2011: Commission expected to table proposals for EU's new long-term budget (2014-2020).

  • 1 July 2011: Start of six-month Polish EU Presidency.

  • Mid-2013: New budget rules expected to come into effect.

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