We, the representatives of the peoples of Europe, are categorically opposed to the freezing of the EU budget, let alone to cuts in that budget. The reason is simple: we know that the EU budget is the most powerful force for growth in Europe. Even more so at this time of crisis, Europe needs the EU budget in order to invest in growth. In order to create jobs. In order to support the Member States in their efforts to make the structural adjustments which are now essential to address the problems of declining competitiveness and rising unemployment and poverty in particular. We need a properly funded EU budget to supplement national efforts, because an EU budget which is specifically designed to complement national budgets - by channelling EU funding to precisely those areas where the Member States are making cuts - generates tangible added value for ordinary people.
I share the view that money alone is not the solution to structural problems. However, we must acknowledge the consequences of the austerity policies implemented over the last two years: Europe is sliding into recession. Today, 25.8 million people in Europe are unemployed. There is no escaping one simple fact: the focus on austerity to the exclusion of all else is not working. Now, at long last, Europe needs growth, not least because growth is the best way to reduce debt.
Much of the opposition to a realistic EU budget stems from three misconceptions.
First misconception: the EU budget is not money for Brussels, the EU budget is money for ordinary people in Europe. As much as 94 per cent of our budget is channelled directly back to the EU Member States or invested in measures to help us achieve our foreign policy priorities. Cuts in EU funding - for example in the areas of regional policy, rural development, transport policy, infrastructure policy or the Erasmus Programme - would not be made up elsewhere, for example by increases in national funding. Let us be clear about this: these are real cuts which will affect EU citizens!...
Second misconception: the EU budget is not too big. On the contrary: it amounts to only 2 per cent of total government spending in the EU. In other words, taken together the Member State budgets are 50 times larger than the EU budget. Nevertheless, the EU budget has an enormous leverage effect: every euro invested by the EU attracts an average of between two and four euros in additional investment.
Third misconception: the EU budget has not grown too much. Between 2000 and 2010, Member State budgets increased by 62 per cent, but the EU budget rose by only 37 per cent. Even since 2008, when the crisis started, total government spending in the Member States has increased by an average of more than 2 per cent. The EU budget can in no way be said to have exploded; over the last 15 years, it has in fact diminished in size by comparison with national budgets.
High-quality, effective administration is impossible without proper funding. The proposals currently doing the rounds for a drastic cut in administrative expenditure can no longer be described as an adjustment - they are quite simply punitive. Is this really the way we want to go? You should understand that freezing or cutting the EU budget means abandoning the Europe 2020 Strategy. Not every 'compromise' is necessarily a satisfactory result. The European Parliament will not approve just any agreement, therefore. The further your compromise proposal departs from the Commission proposal, the likelier it is to be rejected by the European Parliament.
Like you, the European Parliament has called for a 'better spending' policy, sounder budget management on the basis of the principles of efficiency, effectiveness and economy, in particular in order to maximise synergies between EU aid programmes and national investment. We are also in favour of better spending because we want to see each and every euro that we do spend generate as much added value as possible.
We also take the view that - for the moment - the retention of a seven-year MFF makes sense, because this period coincides with the timetable for the Europe 2020 Strategy and will provide the continuity of funding we need.
We are also calling for mechanisms which offer the highest possible degree of flexibility, both between expenditure categories and from one financial year to the next. Only in this way can the budget be adapted to take account of changing political and economic circumstances. None of your governments would be able to work without the possibility of transferring surplus funds from one budget item to another - but you want to deprive us of precisely that flexibility.
The philosophy behind Europe is that States and peoples should create joint institutions to overcome joint challenges. All of us here in this room share that philosophy. If you deprive those institutions of the resources they need, however, you will be damaging Europe.
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