Should the European Union follow the Members States example and take a dose of harsh austerity medicine, or as many MEPs are demanding, increase its budget to help relaunch the European economy and competiveness? How should the EU budget be financed and how can we avoid a two-speed Europe between the Eurozone and non-eurozone members? These are just some of the questions which Toute l’Europe put to Janusz Lewandowski, Budget Commissioner. Find out what his views on these topics and more in our video interview.
Watch the video of the interview (08'18) :
Touteleurope.eu : The European Commission will present its proposal for the 2012 budget at the end of April. You recommend a saving of 40 billion euros. What kind of propositions do you make to cut that budget?
Janusz Lewandowski : We are in the middle of the annual procedure which is quite a routine now for the second time under the Lisbon Treaty already. However the economic context, beyond the Berlaymont, is that the Member States are in trouble. They are telling us that we should be very modest in our proposal to be presented on the 20 April, and especially modest with regard to administrative costs, because this is the easiest way to criticize not only the budget, but also the European project.
This is why I sent a letter within the Commission and also to the other institutions reminding them to be extremely restrained when planning for administrative costs. I think this is matter for our credibility.
Touteleurope.eu : How is the Commission negotiating with the Member States?
Janusz Lewandowski : Now we are under the Lisbon treaty which creates, what we call in our jargon, "two arms" of a budgetary power: on one hand, the Council, therefore for the governments, on the other hand the European Parliament, as equal partners. What is new under the Lisbon Treaty is that we have only one reading on both sides. This means both sides have to be particularly responsible and then we have in November the conciliation procedure.
I have to say that in 2010, it is the first time since 1984 that the conciliation procedure failed. This was a measure of tension between the Parliaments and governments, but it's also the sign that these were difficult financial negotiations. Hopefully this year it will be less politicized. Therefore conciliation will give us the results without calls for the new draft budget because we were under the pressure last time.
Touteleurope.eu : Some MEPs consider that austerity measures reduce competitiveness. Do you think that the EU needs to increase its budget in order to boost competitiveness?
Janusz Lewandowski : Of course we need budgetary lines to support political declarations. The budget is about politics in numbers. Political declarations without budgetary lines would be empty promises. What I think we should know is that we cannot transfer automatically the logic of a national budget to the level of European budget.
The European budget is a budget without a deficit. The EU not indebted. We cannot be blamed for mismanagement at the national level. There are some countries, I'm not going to name and shame them, with a budgetary deficit that is bigger than 140 billion euros which is the volume of European budget! But what is even more important about the logic of the European budget is that it's gaining maturity with time. In 2007 and 2008, the first years of the ongoing financial perspectives, were practically lost and the results were difficult to see this early on. Now the projects are gaining maturity and the bills are coming from 27 countries from the West and East, North and South. So we cannot simply default, we wouldn't be credible any longer. These payments will grow in 2011, 2012 and 2013 as the projects reach maturity. But this is not quite understood among the governments.
Touteleurope.eu : What do you think of the Franco-German "competitiveness pact" ? How could we avoid a two-speed Europe?
Janusz Lewandowski : It's a paradox. I'm also coming from behind the iron curtain so I know how difficult the road towards membership was for Poland, or the Czech Republic, or Hungary. The Eurozone has to establish its own rules that will be much more rigid than before in order to avoid the sort of crisis we are experiencing now.
This is a lesson from the crisis and it is important for European Union to draw the lessons. The crisis could be a catalyst for change. But that means that non-euro countries that we are somehow "behind the door", that the decision-making process of the European Union might risk being among only the 17 Member States. Therefore my advice to Prague or Budapest is to be a part of this decision-making machinery, to contribute voluntarily to the anti-crisis mechanism in order to be involved, and to prevent a two-speed Europe emerging.
Touteleurope.eu : What kind of new resources could finance the EU budget?
Janusz Lewandowski : I have been visiting the capitals of Europe to gain knowledge of the sensibilities of the major players and smaller players. We know that in times of austerity there is a desperate need to reduce the direct contribution from the national budgets to the European budget. This is not always possible as there are new competences created by the Lisbon Treaty.
Administrative costs account for only 6% of the budget so the remaining 94% of the European budget is spent outside of Brussels in the 27 countries to fund small and medium size companies, to beneficiaries of Erasmus grants and life-long learning programmes for example.
It is important to open up the issue of financing about how we can find new resources for the European budget that would be closer to the spirit of the treaties and also the vision of founding fathers.
I'm fully conscious that this is very controversial. I know that the Parliament would like the Commission to present the proposal. We are now at the level of very technical analysis. Technical analysis of about 200 pages on taxation, on own resources, on trade, CO2 emissions schemes and on VAT. In June, as a part of proposal for the future, for the post -2013 Europe, we have to present ideas for possible new resources. I do anticipate that this is going to be controversial, but I am in favour open discussions, without any taboos. We are coming with proposals including new resources, which of course will not fully replace the national contributions. National contributions are the stabilizing part of the budget, that's also a lesson for the past, but new resources can supplement and relieve the national finance ministers in times of consolidation. This is the story about new resources.
Touteleurope.eu : What will be the main priorities of next year’s budget?
Janusz Lewandowski : Europe now should be about competitiveness, growth and jobs. Fortunately, this is also the nature of the European budget. The national budgets are more about social welfare transfers. This is the nature of national budgets. They are conceived in an annual cycle. European budgets, and the multi-annual perspective, are more about investment in order to promote growth and jobs.
We need investment. We need the multiplier effect of European project. We need cooperation. I think that should be absolutely the focus of the coming years.