The 2017 EU budget: How to tackle current crisis without endangering economic growth

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

The European Parliament wants to secure funding for the Horizon 2020 research programme. [Iwan Gabovitch/Flickr]

The European budget is vital for research, SMEs, job creation and tackling the EU’s external challenges. The European Parliament must fight to ensure this budget is up to the task, writes Siegfried Muresan.

Siegfried Muresan (Partidul Mișcarea Populară) is a Romanian MEP and the EPP group’s shadow rapporteur for the EU budget 2017.

The EU 2017 budgetary procedure has started on 30 June 2016 with the presentation of the draft budget for 2017 by the European Commission.

Impacted by Brexit, the migration crisis, the instability in the Eastern Neighbourhood and last but not least, by the need to effectively address Europe’s slow economic recovery and investment gap, the EU is trying to provide a common and strong answer. The EU budget is part of the solution to these problems.

Contrary to what most people think, the size of the EU budget is very small – around 1% of member states’ gross national income (GNI) – but it is a budget of investments. That means that the approximately €155 billion the EU commits every year must be used to their maximum capacity.

As I am the shadow rapporteur for this budget from the EPP group, I am particularly interested in making sure that the 2017 budget is provided with adequate means to ensure that our objectives of sustainable economic growth and creation of jobs can be fulfilled. Of course, we must not look aside to the current refugee crisis, which still has the potential of de-stabilising the EU.

The 2017 draft budget plans to address these issues through an increase of 1.7% in commitment appropriations compared to 2016. On the payments side, the draft budget proposes a decrease of 6.2% compared to 2016. This is largely due to less payment appropriations in the budgetary heading corresponding to cohesion.

According to the statement of the Commission Vice-President, the delayed adoption of operational programmes and designation of responsible implementing authorities at national level, combined with lower payment claims for the preceding financial period (2007-2013) led to this lower level of allocations.

On the other hand, several EU programmes created to sustain growth and support SMEs will be reinforced next year. For my political group, the largest in the European Parliament, SMEs are the main driver for job creation across Europe and they need to benefit from easy access to finance in order to help restore our economic growth. We need to give a clear signal of EU support to the job creators. COSME is such an example and the proposal to increase payment appropriations by 40% compared to 2016 is good news.

Complemented by the support, which the European Fund for Strategic Investments (EFSI) will continue to offer in 2017, we should be able to slowly close the investment gap that has persisted in Europe since the economic crisis. EFSI remains one of the most important projects of the current Commission and the recent announcement that it will be prolonged until the end of the 2014-2020 Multi-annual Financial Framework is good news. Only a year after its entry into force, this fund generates investments of more than €106 billion in the EU economy.

Research and infrastructure are also key to our economic development and competitiveness. Horizon 2020 is the EU’s programme supporting research and innovation. Unfortunately, compared to its predecessor, the Framework Programme 7, it has a lower rate of project uptake. This means that only 13% of applications are successful, thus leaving potentially good projects without financing. That is why in the upcoming negotiations we will try to secure adequate financing for Horizon 2020.

Regarding the actions in the field of migration, almost all political groups in the EU, as well as public opinion, unanimously agree that decisive measures have to be taken to stop incoming migratory flows from the Middle East and Africa. Securing our borders, increasing the capacity to process asylum requests and ensuring the swift return of ineligible applicants are crucial.

That is why I welcome the increases in the budgetary appropriations dedicated to these objectives. €3.78 billion (an increase of 25%) will be devoted to actions in the field of migration and home affairs. An important part of this increase will go to the newly established European Border and Coast Guard.

But if we are to tackle the migratory flows in a sustainable manner, the solution is to address the root causes of migration: reducing poverty in the migrants’ countries of origin, preventing conflicts, ensuring access to water, education and health services.

The budget contribution to neighbouring countries that host large number of refugees as well as investments in countries that generate large waves of migration will be one of the priorities for 2017.

€750 million will be pledged to the Turkey Refugee Facility, while €525 million will provide assistance for Syria, Jordan and Lebanon. Support has also been increased by 30% for Eastern neighbouring countries especially those that implement Association Agreements with the EU (Moldova, Ukraine and Georgia), as I requested in the report on the EP priorities for the 2017 budget, voted earlier this year. It is crucial that we support reforms in these countries in order to allow them to further advance their integration with the EU. It is in our fundamental interest to be surrounded by stable and prosperous countries, with which we have close ties, in the Union’s Eastern Neighbourhood.

Our expectation from the upcoming negotiations is to ensure that the EU budget is capable of responding to unforeseen crises, without jeopardising our traditional priorities of growth and jobs. The Parliament fought in 2012-2013 to provide the multiannual budget with some flexibility instruments to allow it to react to unforeseen events. Without these instruments, surely the EU budget could not cope with the emerging situations we face. We will continue to pursue the objective of providing the EU with adequate financial means to tackle all these issues and ensure the prosperity of our citizens.

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