A green EU budget – or no EU budget

6 November 2012, European Voice

On the eve of Angela Merkel’s address to the European Parliament, Markus Trilling sketches out how the German chancellor might like to propose a way out of the deepening EU budget impasse.

Ahead of a crucial meeting of national leaders on 22-23 November, member states of the European Union are hardening their positions on the future EU budget, the multi-annual financial framework for 2014-20 (MFF). Last week, the British parliament, albeit in a non-binding vote, made it crystal clear to the British prime minister, David Cameron, that anything less than a real-terms cut in the MFF will not be tolerated domestically.

Sweden and the Netherlands have also been banging the drum for substantial, €100+ billion reductions in the budget. France is aggrieved at the marginal proposed cuts to the Common Agricultural Policy announced last week by the Cypriot presidency of the Council of Ministers. Meanwhile, the new member states in the east are surely seething at the hacks aimed at Cohesion Policy spending (€12.5bn, or a 3.7% reduction), again part of the revised, Cyprus-sponsored MFF ‘negotiating box’.

So what of Germany, a member of the grouping that wants reductions in the Commission’s €1,033bn MFF proposal? If Angela Merkel’s unusual visit to the European Parliament tomorrow (7 November) to talk all things MFF can be interpreted in any way, it is that Germany sees itself as the EU budget conciliator. Whether the German chancellor has a cunning plan up her sleeve is unclear. But here is a text of a speech that I would love to see Merkel give to MEPs, offering a ready-made solution that has so far gone largely unspoken amidst all the gathering MFF storm clouds.

Friends, fellow Europeans,

If I refer to it as the ‘€1 trillion question’ now facing Europe, you will immediately know to what I refer – though by describing the MFF as such, I trust this will not be instantly seized upon and interpreted as Germany laying down its final bid on the size of our future collective budget.

Yes, I am keenly aware of the – understandable – sensitivities surrounding the scale of the MFF, what each member state puts into it, and what each member state gets out. I am not here today to lay down a final, or even opening, MFF bid on behalf of Germany. My belief, though, is that in all the cacophony over MFF cuts, increases, freezes, rebates and – sadly – vetoes, we are plunging ourselves faster and faster down a dangerous cul-de-sac.

It is the great English playwright Shakespeare who instructs us that: ‘The quality of mercy is not strained’. In the MFF debate thus far, however, the quality of the future EU budget is being severely strained. This has to change.

We are all aware that EU budgetary spending has to be spent better. Various provisions within the evolving negotiating texts are intended to ensure much improved oversight of the EU funds for the next budgetary period. These will enhance the delivery of beneficial outcomes for Europe’s economy and our people, notably through increased concentration on fewer objectives in line with Europe’s 2020 development strategies, plus a greater emphasis on results (for example, targets for reducing greenhouse-gas emissions).

Germany recognises, as do I hope all other member states, that tightened control over EU spending can only result in a widening of the gains for all.

The potential for really enhancing the MFF, though, lies most obviously with spending geared to tackle climate change. A shared threat for sure, in Europe and globally, as Superstorm Sandy in the US has again painfully reminded us. Yet, by mobilising significant funding to address climate change, we can also realise a range of other rewards.

The European Commission’s proposal to earmark 20% of future EU funds for climate-action goals is still on the negotiating table. Regrettably it has been rather overlooked by member states due to the focus on gross MFF figures. Thankfully, though, via the European Parliament’s budget committee, just last month MEPs resoundingly backed this 20% figure.

The benefits for all member states of focusing wholeheartedly on a ‘green EU budget’ are clear. Major green-job creation, large reductions in fuel poverty via targeted energy-efficiency measures and urgent support for cutting carbon emissions in order to achieve our collective and binding EU 2020 climate targets – I will ask my colleagues later this month at the EU summit which of them can afford to pass up these and other economic and environmental gains that the MFF can help achieve.

I remain a realist, yet increased funding for environmental, sustainable European initiatives can provide a way out of the MFF cul-de-sac. It is something we can all sign up to, and share the benefits. Guaranteed green EU spending would give much-needed definition to the calls for better spending that we have heard in the MFF debate so far. More importantly, it could do a great deal of practical good for Europeans across the continent.

With tough negotiations to come later this month, I remind my colleagues around Europe of the words of one of our community’s architects, and the founder of my party.

“All parts of the human body get tired eventually – except the tongue”, said Konrad Adenauer. We need to start talking now, and seriously, about the potential green dividends of our future budget – and not leave such a vital issue hostage to fortune in the final pre-dawn moments in another Brussels building not far from here.