Austerity lovers and ‘relaxationists’ fight over the EU budget

European Parliament President Martin Schulz (second from right) meets with Commissioner Janusz Lewandowski (third from right), (European Parliament audiovisual services).

European Parliament President Martin Schulz (second from right) meets with Commissioner Janusz Lewandowski (third from right), (European Parliament audiovisual services).

The efforts to reach an agreement between the three most important EU bodies, the Council, the European Parliament and the Commission over the Multiannual Financial Framework 2014-2020, for the Union’s proper spending power, will test not only the cohesion of the EU but also the abilities of the ‘austerity lovers’ to wreak their policy options. Up to now those who support the severe fiscal consolidation have won the first round, by imposing an austerity MFF providing less financial means than during the previous period 2007-2013.

The proposal of an MFF 2014-2020 of €960 billion, which is currently on the table, was approved after lengthy negotiations by the Council of the 27 leaders and constitutes a major victory for the fiscal consolidation supporting countries, including Germany and Britain. This budget proposal was rejected however by the European Parliament in an unseen before unanimity between the four major Parliamentary groups. The main reason for which the legislators rejected unanimously this Council budget proposal was that it contained borrowing for the first time in the history of the EU, a step which is forbidden by the Treaties of the European Union.

In any case this agreement of the 27 EU leaders over a €960 billion ceiling for the 2014-2020 EU expenditure was the outcome of the political mood prevailing some months ago in the entire Union, favouring the consolidation policies. What changed during the last months in the Eurozone and more so in the entire Union is that everybody understood that severe austerity and economic recession are feeding each other. It has become also clear that the 18 month-long recession in the European Economy is now predicted to extend all along this year and only the very optimists expect growth before the end of 2014.

Restricting the scope

Yesterday the representatives of the European Parliament, the Council and the European Commission had their first meeting to reach a compromise on this gigantic 2014-2020 multiannual financial tool. “The Council and the Parliament agreed on both the scope and calendar of the negotiations; this shows the will from both sides to reach a swift agreement on the next financial period, which is what Europe’s regions, businesses, scientists, NGOs and students call for. Therefore our common target to complete the negotiations by the end of the Irish presidency is definitely reachable”, stated the EU Commissioner for financial programming and budget Janusz Lewandowski.

With this statement, however, Lewandowski in trying to preempt the arguments of the other side, the ‘relaxationists’, by restricting ex ante the interested parties to the above mentioned five categories. There is in no reference to the unemployed, the consumer and health policies, the young, the exclusion and many more policy areas and people who depend to some extend on EU spending. This ‘construction’ by the Commissioner is obviously aimed at restricting the scope and the content of the EU spending.

The confrontation

There is more in this though. Given that lately, there is a lot of talk about mutualisation of member states obligations and the emerging need for fiscal transfers from the rich countries to the poor EU member states, Commissioner Lewandowski probably tries to immunise the EU budget from this discussion. If the proposal for fiscal transfers between member states gains momentum, the EU budget is the first obvious tool to start realising this revolutionary change in the European Union. Obviously the Commissioner tries to block such ideas before they gain momentum.

Despite the fact that the European Treaties forbid the direct financial aid between member states, there are ways that the EU budget can overcome this obstacle. Evidently all those discussions for more and tangible solidarity between the EU member states are idealistic plans supported by some European federalists. Seemingly the other side is getting ready from this early stage, to block such prospects. On top of that there are member states like Britain and Sweden which reject anything that could lead to a closer Union. Actually the British Prime Minister David Cameron has promised to hold a referendum over his country’s position in or out from the EU, if he is re-elected in the 2015 elections. There is the Eurozone however, where a more federalist EU may start taking shape.

Undoubtedly the compromise which is going to be achieved over the MFF 2014-2020 will give a clear indication on the power game in today’s Union. The problem is however that such an agreement will bound the EU for the next seven years, despite the provisions for flexibility and revision. Of course there are ways and means to change the basic provisions of the EU budget after some years, but presently the compromise to be reached will be a good indication of what is to follow in the short-term, as far as the confrontation between the austerity lovers and the ‘relaxationists’ is concerned.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Barriers to healthcare: are they real?

Greferendum: the biggest political gaffe in western modern history to tear Europe apart? #Grexit #Graccident

Germany is the world’s most innovative economy

New seat projections for the next European Parliament

Latin America is a mass-transit powerhouse. But it needs fine-tuning

UN health experts warn ‘dramatic resurgence’ of measles continues to threaten the European region

EU approves disbursement of €500 million in Macro-Financial Assistance to Ukraine

How cultural understanding can help in the cultural shock

Reflections on the the biggest refugee crisis since World War II

Libya stands at a ‘critical juncture’, UN mission head tells Security Council

China by numbers: 10 facts to help you understand the superpower today

Northern Ireland: Parliament wants to secure post-Brexit regional funding

A new generation of women leaders is making waves in the Arab world

Ongoing insecurity in Darfur, despite ‘remarkable developments’ in Sudan: UN peacekeeping chief

EU Directive makes haircut on uncovered deposits a standard in bank bail-ins

Let us keep ‘their spirit of service alive’: Guterres leads tributes to UN workers who died in Ethiopia crash

UN chief welcomes possibility of resumed talks between US and North Korea

New VAT rules in the EU: how a digital sea could have become an ocean

Work Together to Build a New Type of International Relations and a Community with a Shared Future for Humanity

Killing of aid worker in Syria part of ‘disturbing trend’

MWC 2016 LIVE: 5G to embrace unlicensed bands and Wi-Fi

‘Bicycle Kingdom’ makes a comeback, as China seeks solutions to tackle air pollution crisis

G20 starts to tackle inequality

Minority governments ‘à la mode’ in Europe but can they last long?

UN food agency appeals for access to key storage facility amid fight for Hudaydah

Eating less beef and more beans would cut deaths by 5-7%

Afghanistan extends ceasefire with Taliban; UN urges both sides to work towards lasting peace

Further reforms needed for a stronger and more inclusive Argentine economy

UN chief praises impact of Palestine refugee agency as ‘our common success’, at key pledging conference

The ‘abuse of food relief in Yemen’ must end now

Onagawa’s spirit of togetherness: lessons from the 2011 tsunami

China dazzles the world with her Silk Road plan to connect, Asia, Europe and Africa

Drone regulation is necessary to democratize the sky for humanity

European Commission and four online marketplaces sign a Product Safety Pledge to remove dangerous products

Who will secure Lithuania?

Parliament pushes for cleaner cars on EU roads by 2030

Is Data Privacy really safe seen through Commissioner’s PRISM?

3 ways to rebuild trust in how we regulate technology

Refugee crisis update: EU fails to relocate immigrants from Greece and Italy

GSMA Mobile 360 – MENA Dubai on 26-27 November 2019, in association with The European Sting

Sri Lankan authorities must work ‘vigorously’ to ease simmering ethno-religious tensions, urges UN rights expert

Cybersecurity: agreement reached on better protection for citizens and companies

Which EU countries have to correct their economic policies?

Despite falling attacks, ISIL terrorists remain ‘global threat’: UN report

4 radical shifts required to achieve universal health coverage worldwide

Senior UN adviser sees ‘rare’ victory for humanitarian diplomacy as aid convoy reaches desert camp in Syria

‘Much more’ can be done to raise awareness about the plight of persons with albinism: UN chief

EU Commission closer to imposing anti-dumping duties on Chinese solar panel imports?

This project in India helps people and tigers co-exist peacefully

Microplastics have been found in Rocky Mountain rainwater

Constitutional Committee breakthrough offers ‘sign of hope’ for long-suffering Syrians

The decline of our oceans is accelerating, but it’s not too late to stop it

US migrant children policy reversal, still ‘fails’ thousands of detained youngsters: UN rights experts

South Sudan: UN condemns ‘brutal’ sexual assaults on roads to Bentiu

Menu for change: why we have to go towards a Common Food Policy

EU-US trade war? EU calls for logic while Trump’s administration is a loose cannon in a dangerous lose-lose situation for global prosperity

Eurozone: New data show recession and debt closer to explosion

A Sting Exclusive: “Paris and beyond: EU action and what COP21 should deliver”, Green MEP Keith Taylor discusses from Brussels 

‘Health is a right, not a privilege’ says WHO chief on World Health Day

‘A trusted voice’ for social justice: Guterres celebrates 100 years of the International Labour Organization

More Stings?

Comments

  1. It is true that any indebted person, society or economy who’s survival is dependent on reducing the value of money to a negative real number must be consigning themselves to an unending period of stagnation. The evidence for this is all around us, Japan has ‘survived’ with very high levels of debt (up to 200% of GDP) because interest rates have been negative for years. In ‘surviving’ they have avoided some pain but they are still terminally ill and have no prospect for recovery. Some say that monetarist are sadistic and that they just want to inflict pain for the sake of it is to misconstrue the nature of things. Humans contest and compete (read Darwin) and its clear that without the natural clearing out of the unproductive and noncompetitive parts of our economy (public and private) the whole is doomed to a slow but quite painless decline. http://getwd50.blogspot.co.uk/2013/05/reinhart-and-rogoff-knocked-out-in-last.html

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s