Debate: Presentation by the Council of its position on the draft general budget -  financial year
Date: WEDNESDAY, 13 SEPTEMBER 2023
Speaker: Johannes Hahn
Language: EN

I am here to defend the Commission’s proposal again. The draft budget is a balanced proposal to finance the 2024 budget within the MFF as it currently stands, in line with the Union’s political priorities to stimulate the recovery and facilitate the greener digital transition, while always ensuring EU added value, impact and results on the ground. The draft budget does not yet address some of the challenges and uncertainties stemming from the war in Ukraine, which we have included in the mid-term review for the multiannual financial framework, and I will come back to this in a moment. The Council-proposed cut of the commitments by EUR 772 million, in our reading, is again not accompanied by adequate justifications and it does not reflect the priorities expressed by the Council itself. Of course, I have to admit the Council’s cut is smaller than last year’s at this stage. In particular, the cuts on heading one – it’s about single market innovation and digital – are at odds with the priority given to this heading by many Member States. The proposed cuts to Horizon Europe and Digital Europe would mean that programmes which should be boosting European competitiveness may be hampered and delayed. Based on today’s Council position, the Commission would not be able to fully implement the European Chips Act and the Union’s secure connectivity programme, which we approved only recently.  As regards the cut to the financing costs of NextGenerationEU, the EURI interest line in heading 2b, we will include an updated amount in the amending letter in October, when we will have a better view of the volume of disbursements in the second half of the year. Contrary to most other budget lines, the amount to be put on that line is really a technical exercise, rather than a political decision. We will probably be able to lower the amount needed. As regards heading seven, I appreciate that the Council has recognised the efforts made by the Commission to contain the level of administrative expenditure and to apply the same rigour for all institutions. The mobilisation of the single margin instrument is necessary to offset the impact of high inflation and soaring energy prices on the administrative expenditure of the institutions. We are currently reassessing the exact needs for both 23 and 24, notably based on more up-to-date information on the salary adjustment for 23. It is, however, clear that the administration remains under substantial pressure, both because of high inflation but also because of new political demands for Union action, which require additional resources. So what are the next steps? We will revise – as appropriate and if needed – our proposal for the EURI interest line and heading seven in the amending letter. This will also include the usual update to agricultural expenditure and possibly some further elements of a more technical nature. Following Parliament’s reading, I will send you the usual executability letter just before the start of the conciliation. I will do my best to facilitate the process and reach a successful outcome on all budgetary files. We all understand the challenges for the Union budget, including the rising interest rates and inflation. This will need to be addressed in the revision of the multiannual financial framework. Before I conclude, let me touch upon the link between the annual budget and the MFF mid-term review. These are formally, of course, two separate files and have to be negotiated in parallel. It is inevitable that the two discussions impact one another. I hope that we can make quick progress in the mid-term review negotiations to allow the implementation of the 2024 budget to be based on the revised MFF. I cannot stress enough how important it is for all of us to have the budget for next year adopted before the end of this year, in particular, ahead of the European elections.