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European Commission

José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso on the Multiannual Financial Framework: Debriefing from the European Council, 22-23 November 2012

European Parliament - Conference of Presidents/Brussels

27 November 2012

Mr. President,

President of the European Council,

Honourable Members,

The President of the European Council has just provided you with a fairly comprehensive overview of the debates at last week's European Council.

Only six days ago, I presented to you in Strasbourg the Commission's approach and thinking ahead of the European Council. I will therefore concentrate today on how I experienced this European Council and what conclusions I believe need to draw from it.

First of all, as you know, there was no agreement among member states even if, I believe, a huge majority would be ready to agree on the basis of the compromise proposal put forward by the European Council President. As you know unanimity is required.

We now have to deal with this situation. We have to cope with a delay in our proceedings but we can still catch up. We still have a bit of time until the start of the next MFF in 2014 but not so much time. That is why we should not lose further time.

I already said on Friday evening: at last week's summit we had the most difficult and complex MFF negotiations ever, for several reasons.

Never before, those negotiations took place in a climate of sharp economic downturn in large parts of our Union. The Commission's initial proposal was already a reflection of this climate of moderation. But it also introduced a dimension for much needed investments in times of crisis.

The final outcome of the negotiations, however, as far as the Member States are concerned, will most likely be an MFF smaller than its predecessor. This is another first time because in the past there was always an increase from one MFF to the next. So, this is the first time since the beginning of European integration that we are discussing cuts compared to the previous MFF and as you understand it is much more difficult to agree on cuts than to agree on a budget that could be expanded.

And what is difficult about the situation is the fact that it is precisely now when the European Union needs investment. And we see that, at least some governments, are less open to the idea of an investment for growth. And so there is, in my point of view, a problem of coherence. How can we on one side say that we need a programme for investment in growth and afterwards, when it comes to the moment of decision, we do not always follow collectively these principles.

Let me repeat very clearly: the proposal which Member States have on their tables already now represents a net reduction as compared to the current MFF.

At the same time and against the general background of moderation and consolidation, Member States, as a response to the crisis, have been giving ever more tasks and responsibilities to the European level over the past two to three years. I could mention the Six-Pack, the Fiscal Compact, the European Semester and many other areas where there are now more competences not only for the Commission, but for the European institutions. And of course I don't need to remind you about new competences that we have now at European level following the Lisbon Treaty in the field of justice and security, or in the field of external relations. But once again in this context we are discussing cuts.

The Commission has also said, regarding the new competences that we have now received, that in principle we are ready to assume new responsibilities when so requested. However, the Commission, and I believe all European institutions, must not be deprived of the means to fulfil the tasks that go along with these responsibilities.

So, this gives you an idea of the challenges with which this summit was confronted. The reality is that there are still important differences of opinion on a number of key issues, especially the overall size of the budget and the fairness of the distributions between the Member States.

At the same time, let's be fair with our Member States, nobody called into question the objective to reach a compromise at 27. But it is true that sometimes it takes more time and more efforts than planned before decisions are mature. What was achieved in this Summit, was that Heads of State or Government returned with a much better understanding of everyone else's positions, interests and constraints. You may say it's not a lot and I tend to agree, but I hope it has been useful enough to lay the basis for consensus in the coming weeks.

Some of you asked me last week how positions can be reconciled. This question remains to be answered. Only one thing for me is clear: we must all be ready for a compromise. The so-called net contributors, the Friends of Better Spending, the Friends of Cohesion, those with a big stake in agriculture, those who are much attached to other pro-growth parts in the proposal, like research, Connecting Europe Facility, like it is the case with the Commission and the Parliament, and also those who are much more concerned about rebates and corrections, and of course also the European institutions. Everyone has to make an effort.

I hope that everyone will now use this extra-time constructively. The first test whether such openness exists is the last chance to adopt the budget for 2013, because we are almost 2013 and we still don't have a budget.

The Commission has submitted its new proposal last Friday and we have no more than two weeks of time left to reach agreement between the two branches of the budgetary authority.

Honourable members, together with President van Rompuy I have been in bilateral meetings with all 28 Heads of State and Government. I say 28 because the Prime Minister of Croatia was also part of that exercise. We know perfectly well what everyone requests and what everyone rejects. But I tell you, we will only have success in the end if everyone reflects about where he and she can move further. And some additional moves are necessary.

Of course, this also holds true for the Commission. We want to maintain in the final outcome a critical mass of pro-growth investment in infrastructure across Europe, also to make the single market work.

And because sharing costs enables us to develop other projects too, such as the free movement of knowledge, this is how we will achieve better results in education and research, and also in culture, which are so vital for Europe's competitiveness in the future.

Of course we want to ensure that our cohesion policy is in tune with our economic and growth strategy and that it benefits our citizens and businesses across Europe. I made clear during the meeting that we need this spirit of cohesion to be translated in appropriate amounts, namely for the most vulnerable countries and regions of Europe.

We also want to ensure that the budget can act as a lever for continued reform of our common agriculture policy and everything this common policy gives to Europe. Not only to its farmers, but also in terms of food security and the possibility to develop the greening of Europe.

There should be no doubt that Europe also needs to have a social dimension. We therefore want to show solidarity with those most affected by the crisis in Europe and maintain our commitments to the poorest in the world.

Looking at the revenue side, we want the financing of the European budget to be fairer, more transparent and simpler, which is what the proposal on the table does. And we want of course to have efficiency gains. I think it is always possible to add efficiency gains. But by efficiency gains I mean reducing costs that are avoidable, I do not mean cutting the capacity to act of the European institutions.

If there was one aspect which I really did not like during this European Council it was the very active spinning and bashing by some, in the corridors and in the media, against the Community institutions, notably the Commission. And I say in the corridors because indeed, in the room, discussion was constructive and polite. And I also must say that it was indeed an encouragement to see how positively many leaders responded when I provided them with facts and figures about our institutions. Let us also in this debate respect the principle of fair play, which I have always been valuing always very high, also in moments of difficult negotiations.

The reality is that the EU budget is small, only around 2% of total public expenditure in the EU and 1% of EU GNI. The Commission has carried out and it's still performing more ambitious reforms of its administration than in particular some of those who are critical of the European institutions. I had the occasion, during the European Council, to make a strong plea for a strong, independent, competent, European public service, and I believe it is my duty to do that.

Present Honourable Members,

To conclude, the Commission keeps on fighting for a modernised budget that puts growth and jobs creation at its heart. We will continue to defend the rationale of our approach. We need a budget that will allow the EU to live up to its responsibilities at home and abroad for the next seven years.

I believe that in the coming weeks, progress can be achieved and of course we will work to build the bridges needed to get an agreement in time.

I thank you for your attention.

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