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Speech by EC President Barroso on the EU budget framework 2014-2020(European Parliament, 21 November)
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Published on 22-11-12

Tomorrow and the day after, the European Council will meet in Brussels to discuss the future budgetary framework of the European Union for the period 2014-2020.
The stakes could not be higher: the prosperity and stability of Europe, its economic competitiveness and social cohesion.
The goal is sustainable, job-creating growth, but as we all know, we cannot legislate for growth or create jobs by waving a magic wand.

    EC President José Manuel Durão Barroso

    EC President José Manuel Durão Barroso

    From the Europe 2020 strategy to the conclusions of the European Council of June 2012, declarations calling for job-creating, sustainable development have come thick and fast.
    Now it is a question of how the governments intend to match their deeds to their words.
    The decisions on the European Union’s future budgetary framework are a key test of our credibility, because the European budget is our main instrument for investing in growth and job creation.
    We have plenty of other ways to promote growth, through the internal market and international trade, for example, but in terms of investment the main tool is the European budget.
    The European budget alone can ensure the funding for a European dynamic that national budgets individually could not support.
    This dynamic is crucial for growth and jobs in Europe, because it creates a genuine European area of economic, social and territorial cohesion, an area of education, research and innovation and infrastructure.
    Let us be perfectly clear, the governments will defend first and foremost what they see as their national interest, and it is for the Community institutions – the Commission and Parliament – to present the truly European dimension of the issues at stake.
    The Commission is still convinced that its proposals represent the general European interest and the interests of all the Member States.
    The European budget is not, as is sometimes claimed, a budget for Brussels or Strasbourg. More than 94% of the budget is spent entirely on European citizens.
    It is a budget for investing in the economy of all Member States, our regions, towns and countryside. It is a budget for achieving the objectives of the Europe 2020 strategy and for strengthening convergence and European solidarity.
    It is thus essentially what enables improvements to be made at European level to the lives of our fellow citizens. It does this above all through the cohesion policy, which is the ultimate policy of solidarity, but equally a policy of growth, economic convergence and job creation.
    Cohesion policy has been able to adapt to the circumstances and has proved more necessary than ever in these times of austerity. It is a policy that serves both the beneficiary countries and the contributors.
    In a third of the Member States more than 50% of public investment is co-financed with cohesion policy funds and in some countries the rate is as high as 75%, or even 97%.
    These figures show just how important these policies are. Without structural funds, these countries - and we are talking here about most of the new Member States - will not be able to guarantee jobs or press ahead with their fiscal consolidation or structural reforms.    
    But these policies also benefit the contributing countries, and specifically the largest contributors to the budget, whose companies in turn benefit from considerable investment opportunities.
    In many cases, there is clear evidence that more than 50% of the structural funds allocated to cohesion countries flow back to the economies of the major contributing countries, because it is the companies in these countries that are able to carry out large infrastructure projects and provide the necessary technology. This really is a win-win policy.
    Cohesion policy is not just a policy for the poorest Members: according to the Treaties, it is a policy of economic, social and territorial cohesion for the entire European Union. It is a goal for the European Union as a whole.
    The budget of the European Union allows us to have genuinely common policies. As a result of the synergies achieved in this way, we can make savings while safeguarding the integrity of the single market. This is true of agriculture, for example, where 27 different national policies would be a lot more expensive than one common agriculture policy.
    Have we really thought about what would happen if there were no common agriculture policy - if we had market fragmentation in Europe as a result of 27 different national agricultural policies?
    The CAP has always proved adaptable to new socioeconomic challenges, and is even now undergoing further reform. Europe needs a strong, up-to-date, competitive, innovative and green CAP more than ever, to meet the European public’s demands for food supplies and a healthy lifestyle, but also to help combat climate change and contribute to the sustainable management of our natural resources.
    To those who say that we must scale down our proposal because the Community budget must contribute to the vast fiscal consolidation effort under way in Europe, I say: this is exactly what we are doing. Because pooling expenditure in our common policies represents added value and hence real savings, which benefit first and foremost the European taxpayer.
    To be quite clear, opposing this budget will not advance the cause of fiscal consolidation but hamper it, By sacrificing expenditure that brings greater synergies and efficiency and promises greater returns.
    The European budget allows us to create a real European space that is much more than the sum of its parts.
    Sharing costs enables us to develop other projects too, such as the free movement of knowledge - the ‘fifth freedom’, as we call it. This is how we will achieve better results in the key areas of education and research which are vital to a competitive Europe that can maintain or establish its leadership in the sectors of the future.
    This is exactly what we are proposing in our programme ‘Erasmus for All’, which will cost less than 2% of the total budget but will make a huge difference to millions of young Europeans who will be able to study, train and work in another country.
    It is also what we are proposing in the Horizon 2020 programme, to ensure that Europe remains a place of innovation and spectacular scientific breakthroughs.
    A group of Nobel Prize laureates in the sciences and winners of the Fields medal for mathematics have signed a joint petition which they presented to me recently in Brussels. This petition, which was launched by 44 European Nobel laureates and six Fields medallists and has already collected the signatures of over 130 000 European scientists, predominantly young researchers, reminds us that a euro invested in research and innovation which brings together the very best talent at European level will often have a greater impact than a euro spent at national level.
    These researchers and scientists applaud the globally recognised success of the European Research Council set up by the European Union. At a time when the European Union is starting to attract the best researchers in the world and young European researchers are deciding to stay in Europe, the worst thing that Europe could do would be to cut off the fuel to the jet engine of European research and innovation just as the plane is taking off.
    The European budget also allows the Member States to finance projects that they would not be able to fund themselves, such as the large pan-European networks needed to connect Europe.
    You are all familiar with our proposal for the Connecting Europe Facility to promote interconnected trans-European networks in transport, energy and digital technology.
    Several of Europe’s leading CEOs, whose vision is European and global, not parochial and mean-spirited, have signed a letter calling for the budget to support this Facility. Why? Because they know perfectly well that without the European budget there would be no lever to carry out this investment in the infrastructure that is essential to the Europe we envisage.
    There are also areas where, by pooling our powers, we can achieve better results, for example in justice and security; in the smooth running of the Schengen area, and the fight against illegal immigration.
    Things cannot go on as they are now. Whenever there is a very serious problem of illegal immigration people look to Europe and ask what Europe is doing about it. But as we all very well know, Europe does not have the resources to tackle this problem unless we share national powers in this area.
    What we are proposing, therefore, is better spending to achieve targeted results in our main priority areas.
    Some people are calling for cuts on all sides, on the grounds that it won’t really make any difference to Europe.  But I can assure you that what might be a small amount for Europe as a whole can make an enormous difference to some of our policies and some of our countries.
    I have listened to the preparatory discussions, which all focus on how to make cuts. There is no real debate on the quality of investment, it is just cuts, cuts, cuts.
    Each billion cut from the Horizon 2020 programme means 4000 SMEs deprived of financing for innovation to create jobs and growth; 600 top researchers and their teams who will no longer be able to carry out their work - work that our future prosperity depends upon. It also means the end of the Innovative Medicines Initiative in the health sector.
    A small percentage cut for "Connecting Europe" spells the end of European leadership in transport. It means abandoning our CO2 reduction projects, such as Carbon Capture Storage, and dropping our plans to develop connections re-linking Eastern Europe with Western Europe.
    If we make cuts, even small ones, to the already relatively modest culture budget, we will forfeit job creation in a key sector and stifle European creativity at a time when this is more vital than ever.
    Making cuts to the Commission's proposal to create a Fund for European Aid to the Most Deprived might not have a major impact on the overall amount, but it will make a dramatic difference to the 116 million Europeans, including 25 million children, facing poverty and social exclusion.
    And quite frankly, how do you explain to the people of Europe that when there are summits in Brussels to find hundreds of billions of euros to save the banks we reach an agreement, but when it comes to a few million to help the poor the negative voices outnumber the positive ones? What are they to make of that?
    If we call into question the European Union Globalisation Adjustment Fund when there are unacceptable levels of unemployment in Europe, we will deprive millions of unemployed people of the chance to train and find work.
    We will also do away with one of the most innovative instruments for providing social support when companies relocate to other countries.
    To put it simply, a few thousandths of a percentage cut to European funds for development and humanitarian aid is a matter of life and death for the world's most vulnerable people, because these are not just figures, but real people’s lives. Such a move would go against our values - but also our interests. And let me repeat, I am not just talking generally about values and interests here, I am talking about real people.
    For example, I recently visited a Syrian refugee camp in Jordan where the UNICEF’s Executive Director told me that without European Union aid none of these young girls and boys would have access to education at all. The girls I saw there were studying in tents. Their towns had been destroyed by the Assad regime. They are pouring across the borders in their hundreds of thousands. And Europe is there to help. Are we going to cut back our efforts now, in the face of such tragedies?
    Yesterday, Mr President, you hosted the President of Haiti here in Strasbourg. I also had the opportunity to receive him in Brussels. On behalf of the Haitian people, he thanked Europe which, in spite of its economic difficulties, has not forgotten Haiti, a country completely devastated by the earthquake which killed over 300 000 of its people. He thanked Europe for giving Haiti’s children hope for the future.
    In Africa, where we Europeans have a special responsibility, and in many other countries of the world, too, Europe cannot renege on its commitments to achieve the Millennium Development Goals.
    This is the Europe I believe in, we all believe in; an open, caring Europe, a Europe which is not about to turn its back on the rest of the world!

    Honourable Members,

    Giving the European Union the budget it deserves means giving ourselves the possibility of rebuilding the economy on new foundations.
    It also means keeping our promise that spending will be mobilised for growth and jobs, competitiveness and convergence.
    This is why the Commission remains committed to its initial proposal. The Union budget must genuinely support our growth agenda. And I am pleased to see that in general our proposals are backed by this Parliament and by a majority of the Member States.
    On 13 November I joined Parliament’s President at a summit of the Friends of Cohesion in the European Parliament in Brussels. It was organised jointly by the Prime Minister of Poland and the Prime Minister of Portugal and was attended by representatives of 16 governments and the social partners, BUSINESSEUROPE and the European Trade Union Confederation. Management and unions, which do not always agree, are in agreement on this. They are pushing for the EU budget not to be cut as it is essential for growth. The message from them was clear and unanimous. 
    This is why I called on the ‘friends of cohesion’ and the friends of ‘better spending’ to unite in a grand European coalition of the ‘friends of growth’. Because the greatest risk I see today is that the cuts will damage those forward-looking areas that are essential for growth. There is a paradox here: it is precisely because of certain demands by the ‘better spending’ group that we are busy cutting the overall budget, which in all likelihood will most jeopardise those policies that look to the future and enhance competitiveness.
    I do not deny that the better spending agenda is crucial, and I have said as much to the cohesion countries too. I am a fan of cohesion, but I am also a fan of better spending. But let us be frank, we must also be critical of some types of European spending that have not always brought added value as far as competitiveness is concerned.
    This is why we want to align cohesion policy with the Europe 2020 objectives for sustainable, intelligent growth, not just any form of growth. For this reason – and I know this is not very popular in certain quarters, but I have to say it - we are in favour of macroeconomic conditionalities in this area. We must align our various policies within the framework of the efforts being made for better economic governance.  It is thus essential that our investment is efficient. The added value of every single euro is essential.
    I do wonder whether those who would also like to make deep cuts in administrative expenditure are really concerned about efficiency, in the sense of wanting to make the best possible use of the resources available, or whether their real aim is to weaken the institutions like the Commission and the Parliament. 
    Because a swingeing cut in expenditure that represents less than 6% of the budget would have only a minimal effect on the overall savings being sought.
    We need an independent public service in Europe, a high-calibre public service to draft laws and develop projects to serve Europe as a whole.
    Before I conclude, let me add two further points. First, the Commission is fighting for flexibility. It must be possible to adapt the budget, over the years, to changes in the economic situation. The contributions must therefore be real money, not virtual resources, particularly when we are currently facing a crisis in certain Member States who need to be able to make investment not in 2020 but in 2014, under the new European budget and even before that under the budgets for 2012 and 2013.  
    And secondly, the Commission reiterates its proposal for a system of own resources that is closer to the rules of the Treaty, which state that the Union budget should be financed from own resources. It is important that in the next few days the European Council indicate its willingness to proceed in that direction.
    The main thing, finally, is that we all work together towards these objectives, in the spirit of loyal cooperation.
    Of course, negotiation is all about making compromises. The Commission will go to the meeting of the European Council with this in mind, but we must remember that we need constructive compromises - compromises that strengthen Europe, not help to destroy it. Everyone has a role to play in this. What is important is that we have a budget that acts as a real catalyst for growth and job creation.
    I would therefore ask the Heads of State and Government meeting in Brussels to listen to the voices of the Nobel Prize Winners for Science, who remind us that the future of Europe depends on research and innovation.
    Listen to the voices of Erasmus students, who want the best possible education.
    Listen to the voices of the regions, business organisations and trade unions, who tell us how essential investment is for recovery and growth.
    Listen to the voices of entrepreneurs, who are waiting for investment in infrastructure to connect Europe by means of transport, energy and digital technology.
    Listen to the voices of the people queuing at food banks, who cannot understand why, in this current social crisis, so many countries offer so little hope to the poor.
    Listen to the voices of the unemployed, who look to Europe to offer better prospects for the future.
    Listen to the voices of our international partners, humanitarian organisations, NGOs, all of whom are asking that Europe remain engaged in the world, committed to development aid and to providing leadership in the fight against climate change and for sustainable development.
    Listen to the voices of children throughout the world, who say that without the European Union they would be without hope.
    And I urge the European governments to listen to the voice of this democratically elected Parliament which represents Europe’s citizens.
    I urge them to listen so that we can build a stronger Europe, a Europe of growth and jobs.

    Thank you.

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