Debate: General budget of the European Union for the financial year  - all sections
Date: TUESDAY, 18 OCTOBER 2022
Speaker: Jiří Georgiev
Language: EN

We already had the opportunity to exchange views on this topic on 13 September 2022, when I presented the Council’s position. Meanwhile, the Commission has presented an amending letter to the draft budget, and this adjustment will have an impact on the positions of both institutions. We live in very difficult times. The war on our continent affects the lives of millions of people. The severe energy crisis, combined with the historically high level of inflation, the enduring post-pandemic recovery and the disruption of the global supply chains have fundamentally changed our economies. All these developments have led to a large number of new needs: relief to Ukraine, humanitarian aid, food aid to third countries, support for refugees, cost of strategic autonomy, and measures to face the energy crisis.  At the same time, Member States are struggling with their public finances. Some Member States have difficulties in respecting the Stability and Growth Pact. Even if they could afford huge increases in public spending, be it on national or European level, carry the risk of bringing more inflation. In other words, we have many needs, but little leeway. We have to prioritise. We have to make choices. What’s more important and what we can wait for. In a world that’s upside down, we cannot implement our activities and programmes like nothing has happened. As our Minister of Finance recently said, we have to identify negative priorities. It’s essential to back out of some policies and reinforce others, and to create margins in the budget to allow the Union to act. To illustrate the importance of margins, I would like to come back to a discussion we had last week in the Budget Trialogue. In its position, the European Parliament has increased the budget line for humanitarian aid by EUR 250 million. In these troubled times, the Council also considers it very important to foresee sufficient money for humanitarian aid. But I question the proposal of the European Parliament last week. How robust is the proposed increase? What does it cover? More importantly in these unprecedented times, if this envelope is enough, what can the Union do? The proposal of the European Parliament leaves no margins in the budget. Again, in these unpredictable times, we need margins to allow the Union to react. Madam President, Honourable Members, Commissioner, please allow me now to make some preliminary remarks on the European Parliament’s amendments to the Council’s position that are subject to the vote of the plenary. It’s clear that, in principle, the European Parliament and the Council share the same priorities for the entire MFF period and for next year as well. However, our positions are very divergent in terms of amounts. The European Parliament, at this stage, does not indicate an intention to reprioritise. The European Parliament proposes an increase above the Council position of EUR 3.3 billion in commitment appropriations and EUR 1.8 billion in payment appropriations. As I explained earlier, the Council cannot accept the European Parliament’s requests for an almost full use of the margins for each heading, with the exception of heading three, as well as for the substantial use of special instruments. This year, we need to consider more carefully than ever before how the money should be allocated. A very well balanced budget for 2023 is an essential condition to create trust for a more secure future, avoid unnecessary expenditure and foresee sufficient flexibility in order to promptly respond to new challenges that may occur next year. Allow me now to touch upon a few points in more detail. Regarding heading one and, in particular, the financing of research and innovation. The Council recognises that Horizon Europe is an essential instrument to support a successful digital transition, and to contribute to the Union’s economic recovery, the Green Deal and a climate neutral economy. However, the European Parliament’s proposal to increase the allocation foreseen by the Council by almost EUR 1 billion considerably diverges from the financial programming and can put pressure on the sector to fully digest the amounts made available. In these times of crisis, is this the area where we really want to use so much of our scarce resources? Moreover, the Council is surprised by the European Parliament’s proposal to make use of more than EUR 836 million resulting from research decommitments made under Article 15 of the Financial Regulation. This amount is not included in the MFF agreement, nor does it seem to correspond to the calculation of the Commission. The Council takes note of the European Parliament’s statement that new initiatives under heading one should be financed with fresh money. This means that such money would not be available for other policy ambitions. Regarding the expenditure for natural resources and environment, the Council acknowledges the crucial role of the Life Programme, but it’s difficult to understand the European Parliament’s intention of frontloading this expenditure with the proposal to increase the allocation for 2023 by more than EUR 100 million, compared to the Council position. The Council reaffirms its strong commitment to ensuring sufficient funding for the important areas of migration, borders, security and defence. However, we consider excessive the increases proposed by the European Parliament for the Asylum, Migration and Integration Fund, as well as for the Border Management Instrument, given their real absorption capacities.  Regarding the external action of the union, the Council takes note of the proposed increase of EUR 415 million, as compared to the Council position and to the draft budget to be fully financed with special instruments. This reinforcement includes the European Parliament’s demands to increase humanitarian aid by EUR 250 million. As I mentioned earlier, this is a sensitive issue. Indeed, like the European Parliament, the Council also wants sufficient means to provide humanitarian aid to the people in need, be it in Ukraine or elsewhere. But at the same time we must recognise that it’s almost impossible to make a robust forecast for these needs. Events will be unpredictable and unprecedented. We are ready to examine this issue closely, and I am sure we will find a common approach. Finally, ladies and gentlemen, some words on heading seven, administrative expenditure. I am very happy that the revised calculations of the automatic salary increase have created limited margins under this heading and that we do not have to use the little flexibility we have in the budget for this heading. At the same time, I will not hide from you that, after the significant increase of the establishment plan of the European Parliament in the Budget for 2022, the Council deeply regrets that your House proposes to increase the European Parliament’s establishment plan again in the budget for 2023, now with 150 posts. I am afraid this will complicate our discussions during the conciliation in the coming months. To sum up, I think we have some work to do in the coming months. In the contacts I have had so far with the rapporteurs and several members of the Committee on Budgets, I have perceived an understanding for the Council’s position. Several of the proposals the European Parliament will vote on tomorrow show that we share the same priorities. However, we need to find a balanced compromise to bridge the huge difference between the figures proposed by the Parliament and by the Council. Moreover, I have a strong confidence in the Commission, which will act – I am sure – as an honest broker in the conciliation. Thank you very much for your attention.