On Wednesday 14 November, in Strasbourg, our plenary assembly largely voted in favour of an “ambitious” budget proposal for the years 2021 to 2027. This next multiannual financial framework (MFF) would bring the annual envelope of appropriations from 1% of the global GDP of the 28 Member States to 1.3% of the remaining 27. Let’s be honest, we are still far away from what a global power’s budget should be.

The budget of the United States is higher than 20%. Against the Parliament, the Council, namely the representation of national governments, will probably be opposed to this increase. However, by raising the MFF’s expenditures global cap up to 1.3% of the GDP the Parliament is reasonable. To undertake new priorities:

  • Fix the budget of the research programme Horizon Europe at 120 billion of euros (Commission: 83.5 billion of euros);
  • Increase the funding for infrastructures, transports and SMEs;
  • Continue and reinforce the investment plan for Europe through the guarantee fund “InvestEU”;
  • Double the resources for the fight against youth unemployment (YEI), triple the resources for Erasmus+;
  • Fix the EU contribution to the climate objectives at minimum 25% of the MFF expenditures until reaching 30% at the end of the MFF and the introduction of a fund dedicated to energy transition;

without cutting the funding of agricultural and cohesion policies down.

In this ritual exercise, I am pleased that the principle of significantly increasing the budget without raising the public expenditure in Europe has been accepted. It calls for the identification of actions that States finance at the national level without a real efficiency due to the challenges triggered by globalisation. Let’s ask to Europe to take care of what the States cannot assume alone anymore: Defence, as we finally dare to talk about a “European army”, climate, migrations, digital and artificial intelligence, space. Therefore, if those expenditure were more efficient by putting them in the European budget, we can imagine to slightly increase the budget up to more than 1.3% of the GDP. In parallel, the national budgets would be reduced by the same level.

For instance, is it necessary, as Europe just decided, to buy a building in Tokyo, another in Beijing in order to welcome the staff of the European External Action Service (EEAS), a kind of Foreign Affairs ministry, while the European Union does not have any competence in this area? There are 29 embassies in Japan and China. Isn’t there a source of savings here if we gather under the same roof all the national diplomatic representations? We see therefore what the European added-value should be.

But the budget is also an issue of funding. Concerning EU’s own resources, we have to admit that the current system is “extremely complex, unfair, not transparent and totally incomprehensible for European citizens”. The new system should lead to a substantial reduction of Member States’ direct contributions. The objective is to get out of the « fair return » tyranny so contrary to the principle of solidarity, so contrary to the community spirit. It is clear that new own resources cannot mean an increase of the tax burden for European taxpayers in any way. While the United Kingdom is getting ready to leave the EU, let’s take advantage of this circumstance to break up the rebates and other advantages offered in conditions as much clandestine as questionable.

It is time to tax the activities of digital giants for the profits they make in Europe, and tax financial transactions. The budget is the expression of a vision and an ambition. In a Union risking dislocation, it is urgent to consolidate the structure. Let’s give to Europe the means to meet citizens’ expectations, to ensure them that it shapes their future and protects them.

Jean Arthuis
Strasbourg, 15 November 2018