Going for growth without breaking the bank

Date: 03/03/05

The EU must have the resources to respond to the challenges of enlargement, says Josep Borrell

As President of the European Parliament and chairman of the ad hoc temporary committee established to define its priorities, it would be inappropriate for me to indicate to the press my priorities while such a debate is not concluded in the Parliament.

But let me give some general points on the overall issue of the future spending of the EU over the coming years. In a limited budgetary framework, the European Union must be able to respond to the challenges of enlargement without restricting social and economic cohesion and the development of further policies.

We have a clear responsibility: the choices we are called to make will have a significant impact on the future of the EU and will affect future generations.

First, I would like to recall the central role of the Parliament in this process: without its agreement there will be no financial framework. After the constitution enters into force Parliament has to give its approval to the European law containing the multiannual financial framework. The European Council will be aware that the Parliament will not rubber-stamp any compromise reached. The Luxembourg presidency is fully aware of our role and is making concrete efforts to maintain positive contacts with the Parliament.

Second, a point on the overall amount: while the Parliament is still analysing the Commission's proposals, it is already emerging from the ongoing debates that there does not seem to be a majority in favour of going beyond the Commission proposals for maximum spending commitments of 1.26% of gross national income (GNI). Nor has there been any significant support in the temporary committee for the position of the 'group of six' (1% of GNI). Overall, the Commission's proposals have been well received, although a number of MEPs have clearly indicated their openness to discussing possible reductions in relation to the proposals.

On a personal level, I strongly believe that we have to match our actions to our words. We have immense challenges ahead of us: we cannot have more Europe, with more Europeans, but less money.

The financial framework should reflect the EU's agreed priorities, but with the strict limit of between 1%-1.26% of GNI, the margin for manoeuvre is limited. Agriculture still absorbs more than 40%; other expenditure not linked to economic growth (for instance, external actions, citizenship, culture, decentralised agencies and administrative expenditure) makes up close to 25%. We can conclude that expenditure linked to economic growth is around 35% of the framework (inter alia: structural funds, networks, environment and research). In the Parliament a large majority is determined to maintain, and possibly increase, expenditure linked to the Lisbon process. I am personally convinced that this expenditure, at a European level can have a positive effect on employment, economic reform, social cohesion and environmental protection as engines of a sustainable growth-oriented economy.

I would also like to point out that competitiveness and economic growth will be achieved only with the coherence of a joint effort at national and European level. I am confident that the spring EU summit will set clear tasks and deadlines for Europe and member states. The Parliament is not inactive on this point. The revitalisation of the Lisbon Agenda for growth and employment is at the centre of our concerns. On 16-17 March we have called a meeting of all national parliaments. The aim of this meeting is to co-ordinate initiatives at a parliamentary level and to convey a strong message to the heads of state and government of the EU on the eve of the spring European Council.

I am personally convinced that Europe must make the necessary financial commitment. I am equally convinced that the European dimension can complement and add value to the national dimension - notably in research. It will be necessary both to increase and concentrate resources. The discussions over the coming weeks and months will be focussed on these two issues. We should remain confident that the sense of responsibility of the institutions will allow us to achieve a positive result.

• Spanish Socialist Josep Borrell is president of the European Parliament.

Community spending on social and employment policies remains crucial, says Reimer Böge

As rapporteur of the European Parliament's temporary committee, my aim is to make proposals which the Parliament can endorse in the negotiations with the European Council for the next financial perpectives.

Without prejudicing the final decisions and after having made an analysis of almost all the proposals presented by the European Commission, the temporary committee is looking for the definition of political priorities, which may also entail the identification of negative priorities.

On growth and competitiveness, I am convinced that the temporary committee will accompany, with realistic decisions, the clear and strong commitment of Parliament in favour of achieving the Lisbon Agenda objectives, which has been presented as a major priority by the Commission in its proposal for the next financial framework.

After five months of work, the debate in the temporary committee identified the following four areas as particular priorities to contribute to the Lisbon objectives of increased competitiveness:

• Research and development.

This is one of the key elements for the competitiveness of European industry. The current level of research and development (R&D) spending in Europe of 2% of the Union's gross domestic product (GDP) is not satisfactory. (The US spends 2.7%, Japan 3%.) The aim of increasing research funding to 3% of the Union's GDP by 2010 has broad support in the Parliament. It will be difficult for the Parliament to accept any cuts in the proposed R&D expenditure for the new financial perspectives.

• Trans-European networks.

Trans-European networks are one of the Parliament's priorities aiming at transforming the EU into a dynamic economy geared to growth. The period covered by the new financial perspectives (2007-13) is crucial to complete several ongoing projects and to integrate networks of all ten new member states into the existing ones.

Co-financing from the EU budget, national public spending and the private sector leads to a considerable leverage effect and stimulates investment. The temporary committee has expressed some support for the proposals of the Commission although it had some doubts about the absorption capacities of the member states and debated possible alternatives.

• Education, training and youth.

Human capital is one of the major determinants of growth in Europe. The EU provides exchange schemes supporting mobility for students and teachers as well as promotion of academic expertise in the Union's countries. The main instruments in this area are the new Lifelong Learning Programme and the Youth Programme. Despite the proposed budget increase for the new programmes, the amounts proposed for education and training remain marginal. Yet the added value of European programmes is significant. Education and training should be one of the priorities for the new financial perspectives. It is unlikely that the Parliament will accept any reductions in the amounts proposed by the Commission.

• Social policy and employment.

The Lisbon European Council (2000) set as a goal for the Union the building of a competitive economy based on sustaining economic growth with more and better jobs and greater social cohesion. Community funding in the social and employment area needs to continue to accompany labour market and social policy reforms in the member states. In this context, special attention needs to be given to the challenges of the recent enlargement round. The discussion in the temporary committee showed that an adequate level of community expenditure in the social and employment area remains crucial, as the Lisbon objectives, in particular those for employment and social protection, have not been reached.

• Reimer Böge is rapporteur of the temporary committee for the political challenges and budgetary means for the enlarged Union, 2007-2013.

Two MEPs set out their views on the EU's priorities for the next budgetary period, 2007-2013.