“After 2020, the EU bud­get will get smaller fol­low­ing the de­par­ture of the United King­dom, al­though, who knows, maybe other EU Mem­ber States will con­trib­ute more. It is mostly up to Ger­many,” said Lithua­nian Fi­nance Deputy Min­is­ter Loreta Maskalioviene, w

The Baltic Times - - FRONT PAGE - The Baltic Times.

Dur­ing the EU’S sev­enyear fi­nan­cial pe­riod after 2020, the Co­he­sion Pol­icy will re­main the ma­jor bond of the EU, de­spite Brexit and in­creased EU spend­ing on se­cu­rity is­sues, while the mul­ti­speed EU, due to fur­ther deep in­te­gra­tion of the Eu­ro­zone coun­tries is in­evitable, and some EU sanctions against Poland and Hun­gary are pos­si­ble – those were the main talk­ing points at the 7th Co­he­sion Fo­rum of the high­estlevel EU of­fi­cials in Brus­sels on June 26-27. The Co­he­sion Fo­rum is held ev­ery three years to out­line the strate­gic goals tack­ling re­gional eco­nomic dis­par­i­ties in the EU.

“The EU bud­get, and in­deed the Euro­pean Union as a whole, will change after 2020. This is cer­tain – the sta­tus quo is not an op­tion for our Union,” reads The Re­flec­tion Pa­per on the Fu­ture of EU Fi­nances, which was is­sued by the Euro­pean Com­mis­sion on June 28, on the very next day after the Co­he­sion Fo­rum.

“After 2020, the EU bud­get will get smaller fol­low­ing the de­par­ture of the United King­dom, al­though, who knows, maybe other EU Mem­ber States will con­trib­ute more. It is mostly up to Ger­many,” said Lithua­nian Fi­nance Deputy Min­is­ter Loreta Maskalioviene, who took part in the Co­he­sion Fo­rum, to The Baltic Times. Now, Ger­many is the big­gest con­trib­u­tor to the EU bud­get, while the UK is the sec­ond big­gest.

“I’m sure that our Es­to­nian col­leagues will reach an agree­ment about more flex­i­ble and sim­ple rules of the Co­he­sion Pol­icy,” said Joseph Mus­cat, Prime Min­is­ter of Malta, ad­dress­ing the Co­he­sion Fo­rum on June 27. He spoke there be­cause, dur­ing the first half of 2017, his coun­try presided over the EU Coun­cil. Start­ing from July 1, 2017, Es­to­nia took the ro­tat­ing pres­i­dency of the EU Coun­cil.

“The Baltic States are do­ing a very good job. I’m look­ing for­ward to the Es­to­nian pres­i­dency. I hope Es­to­nia will put Co­he­sion Pol­icy on the agenda of its pres­i­dency. The Baltic States are the model for other coun­tries. I was im­pressed by the re­sults of the EU Co­he­sion Pol­icy there when I, re­cently, to­gether with EU Commissioner Vyte­nis An­driukaitis, vis­ited Vil­nius. They have won­der­ful projects. The Baltic States are the model for other coun­tries. You should not un­der­es­ti­mate your­self,” Co­rina Cretu, EU Commissioner for Re­gional Pol­icy, said talk­ing to The Baltic Times be­fore her press con­fer­ence at the Co­he­sion Fo­rum. More than half of the Co­he­sion Pol­icy bud­get in the cur­rent pe­riod of 2014-2020 has been set aside for less de­vel­oped re­gions, which have a GDP of less than 75 per cent of all the EU Mem­ber States’ av­er­age, while after 2020, Lithua­nia, Es­to­nia and, maybe, Latvia will reach the level above 75 per cent of the en­tire EU av­er­age. Lithua­nia con­sid­ers plans to split its ter­ri­tory into two EU re­gions in the con­text of the EU’S Co­he­sion Pol­icy: the rich Vil­nius re­gion and the rest of Lithua­nia. The lat­ter might still have a GDP of less than 75 per cent of the EU av­er­age and more EU co­fund­ing could be avail­able for it. Cretu, when asked by The Baltic Times about this idea, said: “It is a nice idea. It is the right of ev­ery coun­try to make ar­range­ments of its ter­ri­tory. Let’s see how it will go on. My pre­oc­cu­pa­tion is to en­sure that the poor part of Lithua­nia will con­tinue to get ap­pro­pri­ate fund­ing.”

Later, dur­ing her press con­fer­ence, Cretu said that the EU in­sti­tu­tions ad­ver­tised too lit­tle the EU’S Co­he­sion Pol­icy. “I, as a for­mer jour­nal­ist, know that good news is no news for me­dia,” Cretu said sadly. She em­pha­sised that the peace in North­ern Ire­land, which is the UK’S poor re­gion re­ceiv­ing a lot of co­fi­nanc­ing from the EU struc­tural funds-re­lated Co­he­sion Pol­icy, was largely pre­served not due to ac­tiv­i­ties of Dublin or Lon­don – it was achieved due to the EU’S Co­he­sion Pol­icy, ac­cord­ing to her. “It is a pity that we didn’t en­gage in dis­cus­sions be­fore the Brexit ref­er­en­dum. We just thought that we can­not go down to the level of Brexit pro­mot­ers and it was a mis­take,” Cretu said. She added that the EU bud­get will prob­a­bly face a tough chal­lenge to fund more with less, and spoke in favour of less bu­reau­cratic rules for get­ting Co­he­sion Pol­icy-re­lated co-fund­ing from EU funds.

Marku Markkula, Pres­i­dent of the Euro­pean Com­mit­tee of the Re­gions (or the COR – it is the EU’S as­sem­bly of re­gional and lo­cal rep­re­sen­ta­tives), who took part in the same press con­fer­ence, em­pha­sised that, thanks to the Co­he­sion Pol­icy, the EU has in­vested 454 bil­lion Eu­ros in 2014-2020 to re­duce dis­par­i­ties and sup­port sus­tain­able growth in all its re­gions.

“It worked in the past, it con­tin­ues to work and it will work in the fu­ture,” Markkula said about Co­he­sion Pol­icy adding that the Co­he­sion Pol­icy rules should be more flex­i­ble be­cause, of­ten, real life re­quires mak­ing ad­just­ments in EU co-spon­sored projects dur­ing their im­ple­men­ta­tion process.

“In 2004, when Latvia joined the EU, my coun­try’s GDP was 47 per cent of all the EU av­er­age. It was 64 per cent in 2016,” Lat­vian Fi­nance Min­is­ter Dana Reizniece-ozola said at a de­bate panel of the Co­he­sion Fo­rum adding that her coun­try’s achieve­ments would be not so rapid with­out the EU’S Co­he­sion Pol­icy.

French­man Pierre Moscovici, a po­lit­i­cal heavy­weight EU commissioner for eco­nomic and fi­nan­cial af­fairs, who took part in the same de­bate, spoke mostly about the up­com­ing deeper in­te­gra­tion of the Eu­ro­zone coun­tries, which will shape the fu­ture of the Baltic States. Un­like sev­eral EU coun­tries of Cen­tral and Eastern Eu­rope (Poland, Hun­gary, Czech Repub­lic, Croatia, Ro­ma­nia, and Bul­garia) or Swe­den and Den­mark (Fin­land is the only Scan­di­na­vian coun­try, which in­tro­duced the Euro), the Baltic States are mem­bers of the Eu­ro­zone. Moscovici said that the Eu­ro­zone should have its own bud­get as well as its fi­nance and econ­omy min­is­ters. “In case you have such tools, you need also the par­lia­ment [of Eu­ro­zone] to en­sure the demo­cratic process,” Moscovici said speak­ing in favour of multi-speed EU. He said that the EU’S in­ter­nal mar­ket and the com­mon de­fence pol­icy will re­main the ben­e­fits for all the EU Mem­ber States.

EU Mem­ber States, which are not mem­bers of the Eu­ro­zone, will be able to join this deeply in­te­grated Eu­ro­zone when they in­tro­duce Euro cur­rency in their coun­tries. The fur­ther in­te­gra­tion of the Eu­ro­zone is in­evitable, be­cause it is pushed for­ward by French Pres­i­dent Em­manuel Macron and Ger­man Chan­cel­lor An­gela Merkel (the Ger­man-french duet re­mains the EU’S driv­ing force as usual: it was Merkozy and, later, Merkol­lande in the past – now the EU got Me­cron). It pro­vokes some cries of worry from Poland and other non-eu­ro­zone EU coun­tries, which are afraid to be too marginal­ized po­lit­i­cally in the EU. The Poles are also afraid that the Eu­ro­zone coun­tries may have some kind of Co­he­sion Pol­icy of their own. Moscovici told Poland’s daily Rzecz­pospolita that the deeply in­te­grated Eu­ro­zone will en­cour­age noneu­ro­zone EU States to join in. “We want to in­tro­duce such a sys­tem, which will be so at­trac­tive that – as they say in movies [in The God­fa­ther] – it would be an of­fer they can’t refuse,” reads the text of in­ter­view with Moscovici in the Pol­ish daily Rzecz­pospolita of May 29.

“After 2020, the EU bud­get will get smaller fol­low­ing the de­par­ture of the United King­dom, al­though, who knows, maybe other EU Mem­ber States will con­trib­ute more. It is mostly up to Ger­many,” said Lithua­nian Fi­nance Deputy Min­is­ter Loreta Maskalioviene, who took part in the Co­he­sion Fo­rum, to The Baltic Times.”

Moscovici, speak­ing at the Co­he­sion Fo­rum on June 27, also made some sug­ges­tions re­gard­ing Poland and Hun­gary. Both coun­tries are crit­i­cised by the Euro­pean Com­mis­sion and the Euro­pean Par­lia­ment due to democ­racy prob­lems in those coun­tries and re­fusal to im­ple­ment the EU’S de­ci­sion re­gard­ing the pan-eu re­lo­ca­tion of asy­lum seek­ers, which are now based in Italy and Greece. “I, per­son­ally, would be rather sup­port­ive to the idea to use EU funds as a tool to im­ple­ment hu­man rights,” Moscovici said. Poland is the first big­gest ben­e­fi­ciary of the EU’S Co­he­sion Pol­icy, ac­cord­ing to to­tal fig­ures, while the EU Co­he­sion Pol­icy fund­ing made up 57.1 per cent of gov­ern­ment cap­i­tal in­vest­ment in Hun­gary – ac­cord­ing to these Euro­pean Com­mis­sion’s sta­tis­tics of 2007-2013, Hun­gary was the EU’S No. 1 in terms of the EU’S co-fund­ing share in gov­ern­ment cap­i­tal in­vest­ment (Lithua­nia was No. 2 with 52.1 per cent). There­fore, the EU sanctions would be very painful for Poland and Hun­gary.

Jo­hannes Bahrke, spokesman of the Euro­pean Com­mis­sion, was more diplo­matic when The Baltic Times asked him about pos­si­ble us­age of Co­he­sion Pol­icy-re­lated funds as a sanc­tion tool against Poland and Hun­gary. “Co­he­sion Pol­icy is for build­ing bridges, not pun­ish­ment. How­ever, Co­he­sion Pol­icy is a two-way street and we are in favour of di­a­logue,” Bahrke told The Baltic Times at the Co­he­sion Fo­rum.

“No­body in Poland be­lieves that those EU of­fi­cials’ threats about cut­ting of EU fund­ing for Poland could be im­ple­mented in the com­ing two years,” Krzysztof Kaszub­ski, jour­nal­ist of the Pol­skie Ra­dio, Poland’s state-owned ra­dio, told The Baltic Times at the Co­he­sion Fo­rum.

Ear­lier, Arunas Brazauskas, Deputy Edi­tor-in-chief of the Lithua­nian magazine Vei­das, talk­ing in the tele­vised dis­cus­sion in the Na­tional Li­brary of Lithua­nia, said that “less EU money spent on paving the streets of Bu­dapest could mean more money for Didzi­asalis [one of the poor­est Lithua­nian towns].”

Ger­man Guen­ther Oet­tinger, EU Commissioner for Bud­get (the Euro­pean Com­mis­sion’s po­lit­i­cal heavy­weight, like Moscovici), ad­dress­ing the Co­he­sion Fo­rum on June 27, echoed Moscovici by say­ing that he would also rather sup­port sanctions against EU Mem­bers, which do not share Euro­pean val­ues. In­ter­est­ingly, he also said that Ger­many, con­tribut­ing to Co­he­sion Pol­icy, re­ceives a large part of the money back, be­cause Ger­man com­pa­nies are in­volved and Ger­man in­dus­try prod­ucts are used in the Co­he­sion Pol­icy-spon­sored projects through­out the EU. “Seventy per cent of the Ger­man money spent on Co­he­sion Pol­icy comes back to Ger­man in­dus­try,” Oet­tinger said.

Euro­pean Com­mis­sion Pres­i­dent Jean-claude Juncker, ad­dress­ing the Co­he­sion Fo­rum, out­lined the main guide­lines for the EU’S near­est fu­ture: he spoke in favour of “so­cial Eu­rope”; em­pha­sised the need for deeper in­te­gra­tion of the Eu­ro­zone coun­tries; spoke in favour of de­fend­ing glob­al­iza­tion; ac­cented the need to boost the EU’S de­fence pol­icy, which “is the re­nais­sance of an old idea of the 1950s.” Juncker also said some words, which would be use­ful for the cur­rent Lithua­nian gov­ern­ment to lis­ten to: “It is time to stop in­ter­fer­ing in all as­pects of our cit­i­zens’ lives – we should con­cen­trate on the ma­jor is­sues.” He also spoke in favour of con­tin­u­a­tion of the Co­he­sion Pol­icy. “Sol­i­dar­ity is the foun­da­tion of our EU,” Juncker said adding that “re­spon­si­bil­ity to ap­ply our com­mon val­ues” is im­por­tant as well.

Co­rina Cretu, eu Commissioner for re­gional pol­icy, said that the balts are smart users of eu funds.

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