“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
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.