Committee on Budgets with MEP EUROPEAN PARLIAMENTARY WEEK 2026
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BUDG European Parliament
Follow its sittingsWe will try to give.
Speaker 2
The floor is open to everybody who wishes to speak, but please keep your interventions to the two minutes allotted in order to allow as many people or representatives as possible to take the floor. If time allows, you may be given an extra slot for possible follow-up and questions. If you wish to speak, you need to fill in the speaking card, which is the green one for this session, please. They are available in the meeting room and are to be filled in by both national parliamentarians and MEPs, members of the European Parliament, willing to take the floor. Please indicate very clearly your name and your country.
The ushers and staff will help distribute the cards and then collect the cards with your name on them. Time will be divided according to the following formula: three national parliamentarians followed by one MEP. If necessary, we can reschedule as we go along. After these organizational remarks, let's now turn to the substance. And our first panel will allow us to reflect on the important issue of financing the budget.
How can the revenue side of the budget and the system of own resources contribute to the EU's objectives and priorities? I first of all give the floor to Mr. to touch upon the many aspects of this broad subject. Seraphin, and afterwards, Mr. Saint Thomas. Mr.
Seraphin, please.
Thank you, Mr. Chair. Honorable.
Alright.
Speaker 6
Invitation to this interparliamentary session. I really appreciate the topic because I know it's not a very popular one. People normally prefer to talk about how to spend money. There are a lot of creative ideas. There are high expectations.
Speaker 7
But if we want to finance new priorities like competitiveness and defense, and at the same time fund our traditional policies like the common agricultural policy or cohesion policy, we need to have a serious conversation about how to finance the EU budget. So, how do you answer that question? It is not that complicated. There are two ways to finance the EU budget. Member states can agree to increase their national contributions based on the GNI.
This is one way. Another way is to look for new sources of financing for the EU budget, what we call new own resource resources. I have visited almost all the member states by now. Based on that, I can say that counting on an appetite for higher national contributions would not be a credible plan for many reasons. There is fiscal consolidation ongoing in many of our member states.
There are new financial commitments, in particular related to defense. So that's why this avenue might not bring the expected results and might not allow us to finance all the priorities that we would like to fund collectively. And when it comes to the new own resources, the Commission, as you know, put on the table a package on July 16, a package of five proposals. A resource based on the ETS one, a resource based on CBAM, a resource derived from non-collected EU waste, electric waste, tobacco excise duty-owned resource, and finally, CORE, a corporate resource for Europe. The commission has also proposed some changes to the existing owned resources, such as what we call here traditional owned resources.
For example, a handling fee for small parcels that come to Europe. But also, we have proposed to end all debates and corrections. So, the debate is ongoing. I have to say that, whilst I have heard a lot of supportive voices in the European Parliament, it is fair to say that the reaction in the Council has been less positive so far. I can say it's quite normal, given how sensitive these matters are, and also because there is no perfect own resource.
Each individual resource comes with its own trade-offs and shortcomings, and that is why we propose a package. And we firmly believe that the package we have put on the table is solid, workable, and balanced. Let me stress three points about this package. First, together, the new owned resources and the changes to the current owned resources system are expected to generate around €65,000,000,000 per year at current prices. A lot of this would be fresh money.
We are not just rerouting national revenues. Fresh money will come from CORE, from CBAM, from e-commerce handling fees, and also from the customs duties for small parcels. The tobacco-owned resource can be based on fresh money if the council approves the recast directive, which we also put on the table. The idea of this directive is to extend the scope of taxation to new types of tobacco products. Second, the package will support our common policies.
It was already mentioned. For instance, the e-commerce handling fee will support fair and sustainable trades. The electric waste-owned resource will incentivize member states to collect e-waste and recycle critical raw materials, which is crucial for our strategic autonomy. CORE will ensure that foreign companies that benefit from the European market also contribute to the EU budget. And the third reflection: the package will spread the burden across sectors and economic actors.
We minimize the impact on our own households by ensuring a proper contribution from the corporate sector and foreign sectors. So, I cannot stress the package dimensions enough. Rather than assessing each resource in isolation, it is important to look at the basket as a whole and keep in mind the bigger picture, including what we propose on the expenditure side. Because if everyone blocks their own resource they don't like, we risk ending up with no resources at all, and everyone will be worse off. Without our balance package, no one gains everything they want.
We are aware of it. But ultimately, everyone gains from a bigger union budget. Ladies and gentlemen, in view of the strains placed on national public finances, own resources are the way to achieve an ambitious EU budget. I didn't say it was the only way, but I'm afraid it could be the only way. I hope to be able to continue to count on the European Parliament as an ally in this debate, but I also hope to count on the national parliament.
I hope to cooperate with the national parliaments. Ultimately, it will be for you, the national parliaments, to decide as well because the own resources decision is a legal act which requires ratification in the national parliaments. Thank you for your attention.
Speaker 8
Thank you very much, Chair. Good afternoon to you all. Thanks for the invitation. I think the commission has started by saying that talking about resources and taxes is not the most enjoyable part of your life, and that may explain why this conversation is difficult. I think this conversation is even more difficult because the words we are using are misleading.
We are here to talk about the own resources of the European Union. Own resources would mean that the European Union owns some resources that belong to it, but actually, this is not the case. This is what you find in the legal terms of the treaty, but own resources are just contributions by your countries to the European Union. This is what it is about, with one exception, which is what we call genuine own resources. And the word "genuine" is here to adjust the misleading term "own resources."
The genuine own resources are, for instance, the customs duties. Tariffs, translated into customs duties, really belong to the European Union as its own resources. The rest is a statistically based resource, which is a contribution from the member states. And the main one, which is the adjusted one, is the GNI contribution. So, the way the budget is decided may be obvious, but I think it's always good to go back to basics and remind you of this fact.
You decide on the level. You have genuine resources or not, not so much. It's the customs duties. And then everything is adjusted: VAT adjustment, and then the GNI contribution. So three key messages there, just to set up the scene.
The first message is that new own resources don't necessarily increase the budget. They will just adjust downward the GNI contribution by the member states. The second key thing to keep in mind is that the own resources are not genuine. Some of them only are, which triggers a logic and a culture of net balances. Countries will reflect how much I contribute and how much I get, which is contrary to the logic of building the European Union.
And the third message is: if you try to find genuine own resources, you may organize a competition between the European Union and the member states. Because if you find new taxes or new areas of levies that the member countries of the European Union could collect, that's where you have some form of competition. So, how do you sort this out? And the key message for you, members of parliament, national parliaments, and members of the European Parliament, is that given the challenges of the European Union, the potential existential crisis, and the need to have European public goods, defense is one of them. Putting the emphasis, as the Commission has done, on genuine own resources with an ambitious package is probably existential for the European Union.
And focusing on genuine resources is the way to get away from the net balances approach. So, some comments now that the scene is set regarding the proposal by the commission. First, there is some history. Right? The history is that following Next Generation EU, there was an agreement by the Council to vote starting in 2021 on some new own resources and genuine own resources.
And this happened only in one aspect, which is the non-recycled plastic waste, which is now generating some money. I think it was EUR 7,000,000,000 last year, which is still extremely small compared to the G and I contribution, which is almost three quarters of the total resources. But since then, no progress has been made. And as the commissioner said at the council, the conversation is pretty stiff and kind of blocked. While in the European Parliament, there are more ideas.
There was a proposal on December 21. There was a commission proposal in 2023. And now we have this July 5 proposal, which I will quickly comment upon. The first part of it is, and that's the good news, there are new genuine own resources which correspond to EU-wide policy and public goods. ETS, Emission Trading System, and CBAM, Carbon Border Adjustment Mechanism.
And this is a genuine one resource, which is not based on any statistical base and which corresponds to an EU policy and the public good, fighting climate change and global warming by putting a price on carbon with a carbon border adjustment mechanism, which is the way to make sure that other countries do take into account our policies and try to align with our policies. So, 30% of the ETS would go to the budget of the European Union, and 75% of CBAM. And this is a genuine own resource and moves in the right direction. In the new package, we have three main new own resources that are proposed. One on e-waste, the second one a levy on tobacco, and the third one, which is called CORE for Corporate Europe.
The first one, e-waste, echoes plastic waste and could indeed correspond to an objective of the European Union. The plastic waste has demonstrated that it can work. It's still statistically based. You look at the statistics or the outcome of the recycling of this waste, and then you take a levy. But it's a move in the right direction.
The tobacco may prove a difficult conversation, as we've seen with the change of the excise directive. But also, it corresponds to a public good, which is health, the same within the European Union, and moves in the right direction, even though it may prove difficult. The core contribution, corporate resource for Europe, in our sense at Bruggeld, in my sense, raises a number of difficulties. The logic is to say there is an internal market, and there should be a levy to have the right to operate in that market. And that makes some sense.
The difficulty of the measure is that it's a levy based on the turnover of companies. It's not a levy based on the profit of the company. And that is highly distortive because a small company, which is not profitable, will have to pay something very large in proportion to its profit compared to a very large company with high profitability, which will pay nothing. And this distortion is not good. And that's why, actually, corporate income tax is usually based on net profit and not on global revenue.
An earlier proposal by the Commission was not completely a genuine non-resource but was a contribution based on a proxy of corporate profits in the country, which could have readjusted the way corporate income tax is shared within the European Union. Now, I think it was more promising than this one. So, there is probably some room for maneuver, even though the member states in the council are probably more opposed to the earlier proposal than to this proposal. Very last words to conclude. Are there other ideas around?
I believe they are, which could be explored in the conversation. One is about exit taxes. You may have heard of a global minimum tax, which was agreed upon at the OECD back in 2021, and is now translated into a directive and implemented by most countries. Maybe some resources linked to this Pillar Two, to this global minimum tax of 15%, could be shared. In particular, there are different mechanisms. I don't get into the details of them, but there may be room to share this at the EU level because it should belong to the EU as a public good.
There are potentially exit taxes when you have profit shifting outside the European Union. Sometimes, in some countries, you don't have external borders, but there could be external borders. And, like tariffs, they could be shared by the European Union. And finally, there may be a question at some point regarding the taxation of the digital economy. It was initially a proposal by the Commission to take 15% of an OECD solution on how to tax the digital economy, which was called Pillar One.
The U.S. S. Declared Pillar One dead a few days ago. And as a result, the commission may want to look at how we can make sure that Europe gets its fair share of taxation on the net profit of tech companies, whether American or from other regions of the world. To summarize, this is a tricky debate.
This is a difficult one. The European Commission has made an ambitious proposal. There are some comments on it, but it's a good basis for discussion. And what matters is to keep the level of ambition and not to duck the problem by saying it doesn't change anything at the end of the day because the GNI contribution, which belongs to our logic of net contribution, will sort it out. No.
The right approach is to think European and try to build Europe with genuine own resources to develop European public goods. Thank you.
Speaker 4
Thank you both, Mr. Seraphine and Mr. Saint Amand, for these introductory comments.
Speaker 2
We now go to the floor for the interventions of the parliamentarians. I first of all pass the floor to Monsieur Renal of the French Senate.
Director, chairman.
Claude Raynal
With a bit of humor, I think I can say that France has developed a certain expertise in the issue of budget and taxation matters. Now, we need an own resources system that corresponds with the priorities of the EU without duplicating the member states' tax systems, which have their own goals that are often very similar to those of the EU. Let us take the example of the new own resources proposal for 2027 put forward by the Commission, more specifically the tobacco excise duty. When it comes to the principle, of course, we agree with the public health goal. And we're talking about €13,000,000,000 per year.
But if 15% of tobacco excise duties from the member states are collected by the EU, the EU will be collecting from those member states that have considerable tax revenue. And this will be covered by the member states without any real EU added value. And therefore, like a smoker, the EU might become addicted to the excise duties it collects from tobacco. When it comes to taxation, the principle of subsidiarity is very important. And the Commission's proposals will only work if they focus on EU-wide issues such as CBAM and other carbon issues.
Therefore, the commission should take this path, pinpointing those issues where it can really pull its weight, such as a digital tax. Countries such as France have adopted a similar tax, but having an EU digital tax would help it be at a higher, more uniform level. We're talking about 38,000,000,000 a year, bearing in mind, though, that there could be reprisals from the United States. Thank you.
Thank you.
Speaker 10
Thank you for the floor, Mister Chairman. Thank you. I will use my mother tongue. Ladies and gentlemen, Slovakia considers the discussion about the future financing of the EU budget as a crucial one. A stable and predictable system of contributions is absolutely necessary for us to ensure system sustainability and trust in the financial framework of the EU.
We believe that any reform of the own resources system should be based on fairness, and we should avoid an unfair burden on member states. The balanced approach is crucial to ensure solidarity and fairness among member states. Slovakia is open to discussions about various proposals on resources. We positively view the new proposal based on the amount of e-waste, which corresponds to the environmental aims and is also in line with the circular economy proposals. We should also focus on other measures that involve more robust member states.
So, we believe that the new system of own resources would increase the reliability of the EU's budgetary framework. In the upcoming discussions about the multi-annual financial framework for 2027. We should also consider the consolidation measures that are being taken in many Member States. The overall balance between ambitions and accessibility of budgetary measures will be crucial for us to ensure a truly sustainable system for our economy. Thank you.
Victor Negrescu
Thank you, Chair. Thank you, Commissioner, and everyone involved. We are really happy, of course, to help so many members of the parliament joining this debate, which is ongoing here in this house, also when it comes to their own resources. And I think this was also mentioned earlier. The commission came up with an ambitious proposal of €2,000,000,000,000 for next year's budget.
And you also presented the numbers for the member states, which puts big pressure on the members of the Parliament, but also on the members of the European Parliament. Because, for instance, for my country, the commission suggests that we'll get 50 billion, so we won the 50 billion. But, nevertheless, there is no agreement, it seems, on the own resources. So, my question to the commission is: what are the alternatives? And I liked what you said.
Reflecting on those resources that could come from the actors who take advantage of the common market of the European Union. We already had this discussion, and there is also an amendment that was registered and cosigned by several members of the South on the MFF report of the European Parliament to test, for instance, the possibility of having a levy on the digital, gambling, and betting industry that takes advantage of the common market and for which we have a fragmented system and no directive tackling illegal gambling. This could be an option, but it is just a starting point. There are so many, and we identified in this house activities that make use of the common market. They don't pay anything to the European Union for the single market, and many of the profits also fly away outside Europe.
So, my question to the commissioner is whether, after you finish this first discussion with the member states, you are willing to evaluate other potential own resources. And when is this going to happen? Because the time is short. We have already started a negotiation on the MFF. And if we don't have the 2,000,000,000,000, I think everyone loses in the end.
Thank you.
Speaker 13
Thank you very much. The next MFF shall reflect a degree of ambition and match the economic and geopolitical challenges we are facing. In particular, a united and comprehensive approach is needed. So, concerning the core, this new contribution should be structured in such a way that it does not penalize small and medium-sized enterprises, which are widespread in many European countries and economic structures. Regarding the CBAM, in order not to damage the competitiveness of energy-intensive businesses, starting with those in the steel and chemical industries, which are strategic for the European economy, it is important to continue its review.
For example, exemption mechanisms for small importers or defined thresholds for emissions exempt from the levy could be envisaged. Many countries, including Italy, support the requests and have called for the immediate suspension of the CBM for fertilizers, as it contributes to the severe economic pressure affecting arable farmers. We must recognize that even if all current commission proposals for new own resources were approved, they would only have a limited impact on the overall budget size, particularly compared to the estimated needs for meeting the identified priorities. The following actionable policy proposals should be considered. Mobilizing private capital is a key complement to the efforts of the EU and national budgets.
Moreover, the MFF can stimulate private investments, especially in small and medium enterprises, encouraging greater risk-taking from implementing partners of EU programs. The proposal to eliminate exemptions from duties for low-value shipments is a good example of a politically feasible proposal. This example is also to highlight that, with regard to new own resources, we are open to discussing proposals provided that they do not place additional burdens on EU households and businesses. Thank you.
Speaker 14
Thank you very much, Commissioner, ladies and gentlemen. Greece's position has always been that the EU must have enough resources to finance its basic policy priorities and to deal with challenges, crises, and new challenges. Therefore, we are in favor of increasing the revenue side of the budget. But our own resources have to be designed properly. They have to be in line with the priorities and the economic needs of the EU.
They also have to be straightforward, transparent, and fair. On the basis of these principles, our position on the Commission proposal on own resources is the following. First of all, the CBAM and the contribution that member states pay for electronic waste that hasn't been recycled are two types of own resources that we agree with in principle. But we have to look at what method we're going to use to implement them and what kind of revenue we're going to have. Now, for the tobacco excise duty, we have to look at the coefficient and see what we're going to do there.
If the tobacco excise duty goes up too much, then people will turn to smuggled and counterfeit goods. And the impact of that, the consequences could be catastrophic. First of all, the emissions trading system. Greece is in favor of maintaining the solidarity mechanism in order to make sure that it's fair and just because otherwise, if it's changed, it could have an impact on Greece's 4.7% of the member state contributions compared to the current contribution. And now, on the whole issue of the partnership-owned resource, we have doubts because of the issue of competitiveness.
Last but not least, let me say that overall, we have to ensure that those member states with lower GNIs shouldn't have a disproportionate burden to bear. We have to strike a balance between their contributions and their ability to contribute. Thank you.
Speaker 2
Thank you. Next is the second MEP, Mr. Moresano, who is also co-rapporteur for the MFF file. Please.
Speaker 15
Thank you very much, Chairman. Good afternoon. Of course, also from my side, to colleagues. Look, obviously, this is one of the more important files that the governments of EU member states, the Council, the European Commission, and the European Parliament will work on in these five years. And it is clear that we have to ensure a transparent and inclusive process.
This is why I really believe that the dialogue we are having this week with colleagues from national parliaments is important. It's clear that the budget of the Union is limited, slightly above 1% of the GNI of all member states. And it is clear that we have to manage it with care, in a way in which people trust the way we manage the budget. We have to tackle irregularities, tackle fraud, and ensure that whoever receives European funds respects European values and the rule of law. And, of course, we have to take into account the fact that the fiscal stance of many member states right now is tight at the national level.
So, the budget will be limited. But on the other side, of course, if we expect Europe to do more, it's clear that this also has to be reflected in the budget. We cannot do more with less. I'm saying all this to underline the fact that transparency in everything related to the budget will be essential to keep the trust of citizens: transparency in the decision-making process, how we decide upon it, transparency in the expenditures, what we fund—that has to be clear. It has to be easily recognizable by the citizens.
It has to be in line with the priorities of the Union, and it's clear that citizens expect us to do more to keep Europe safe and to make our economy more competitive, not, of course, ignoring what has been important for decades: supporting the least developed regions and supporting farmers. So, transparency in what we are funding, but also transparency in how we are funding the budget. And I think we have to be honest: the way in which we are funding the budget right now, with contributions of member states, primarily leads to a process which is divisive, a process which is rather a sum of 27 national agendas. It's not a European process. And, as I said, we have to be honest.
Every prime minister now, when he speaks publicly, is very happy when he can announce that his country contributes less to Europe or that his country benefits more from Europe. Each head of government right now thinks primarily in terms of the net positions of his country. My objective as Prime Minister is to contribute as little as possible, to diminish the contribution of my country, and to benefit as much as possible, and that doesn't necessarily make Europe stronger. And the only way to have a budget that is in line with the needs is to change the way in which we fund the budget. And this is why we, as a parliament, believe that only reliable sources are essential.
We support the Commission in being ambitious and making progress in this area. We have to look into whether the proposals which the European Commission made last year are the right ones for own resources; maybe new ones, like a digital levy, deserve consideration. And last sentence, Chairman: we agreed in 2020 that we would create a unique instrument for a unique crisis, Next Generation EU, the Recovery and Resilience Facility. And we agreed then that we are going to repay it through the EU budget by introducing own resources. And that was the whole package.
And now, we have to follow suit on that. Because of the need to repay Next Generation EU from 2028, €25,000,000,000 per year, it is clear that we need these own resources now more than ever. Otherwise, either member states contribute more to the EU budget, which is not realistic, or a cut of the budget by 15% will happen, which would be a mistake as well. Thank you very much.
Speaker 17
Thank you for the floor. Chairman, I'll speak in Slovak. Dear Commissioner, colleagues, let me briefly comment and contribute to the discussion on behalf of the Slovak citizens of the Stoix National Council. Negotiations of the new European budget are demanding, but today, we are not speaking only about the numbers and tables, but about who will pay for the priorities. For Slovakia, I would like to underline three things.
First of all, we need to think about regions. A new source of income cannot mean an increased cost of living for citizens or extreme pressure on national budgets. We need to analyze everything with a view to the impact on citizens in regions. Second, we need a clear system of financing. A rule must be fair and equal to everybody, regardless of their economic strength, size, or political opinions.
Speaker 16
And thirdly, we need to become more rational in political decision-making, including the ETS system. We are to protect the climate, but the measures must be affordable for the citizens. Also, the German and Austrian prime ministers are speaking about the need to review this. We cannot do this at the expense of households or the industry. Slovakia wants Europe to bring stability, investments, and jobs.
At the same time, we want decisions taken at the European level to be for the benefit of our citizens and not the other way around. Thank you for your attention.
Thank you very much, Chairman.
Speaker 18
I think these attempts to come up with our own resources and include them in the budget are valid, but I don't think this is enough. It falls short of what we need. First of all, the amount of the budget falls short of what we need to tackle the challenges that we face. We believe, and we all know, that the EU was born out of the need for a community and that we have to help each other as member states. And there was enormous integration a few years ago when we got Next Generation EU, and we had the issuance of joint debt.
Speaker 19
Giuseppe Conte, the Italian Prime Minister, pushed for this. And then we managed to go for this kind of burden-sharing among member states. We think that the Next Generation EU has to become structural and permanent because this is the only way we can manage to be competitive and compete against the US, China, and others on the global stage. It's only if we stand united and help each other that we'll be able to have technical sovereignty, technological sovereignty, and that we'll be able to deal with the digital transition, the green transition, and a whole set of problems and challenges where we currently lack efficiency. Giorgia Meloni, the Italian prime minister, has already said that she is open to considering permanent next-generation Eurobonds.
There might be other countries, such as Germany, in the EU that don't agree, but we think that this is the path to take. This is the only way that we can become global players on the international stage and that we will not be crushed by competition from other rivals who are much more prepared and much stronger than us. So, let us move forward with European bonds and a common support system. Thank you. Thank you very much, sir.
Speaker 20
Nikos Papas from Greece, from the Hellenic Parliament. Thank you very much. We're talking about new own resources and budgetary rules, but I think we're not really hitting the nail on the head. How much of Europe can we take? How much of Europe do we need?
Because the European budget is 1%. Our grand goals and objectives, our overarching aims, are to compete on a global scale. And we have countries such as the U.S. S. Who has the equivalent of 20% when it comes to the budget.
Speaker 21
So, how can we manage with the budget that we have? How can we talk about these overarching goals that we have? Now, when it comes to own resources, of course, we have to find them. But will this actually deal with the overall amount of the budget? No.
Speaker 20
Piotr Serafin showed us some figures, and that clearly illustrates what I've just said. Will the design of this have an impact on cohesion? Yes. According to the initial calculations, Greece will have to shell out 4% of its budget, whereas it was 1.32%. We had two reports that were published one year ago: the Draghi report and the Leta report.
And they really hit the nail on the head and looked at where the problem is. And I think that we really have to talk about these reports. Mr. Draghi talked about a need for €6,000,000,000,000 in investment. And what we have is 15 times less than the amount he called for in his report.
So, therefore, to those of you who don't believe that we can increase the EU budget, I say to you, colleagues, that just a few years ago, the idea of a Eurobond joint debt was inconceivable. And now we're talking about how much debt we could have and how we could harness this tool. But please, let us not wait for a new crisis to do what, at that point, we will think was glaringly obvious. Thank you. Thank you very much, Mr.
Speaker 23
Thank you very much. Now, the discussion on the MFF is absolutely crucial for Portugal, as 90% of our public investment is tied up with the financial framework. Therefore, when we talk about our priorities, we have to choose among the different options. We have to look for the amounts available and our priorities. And we are very far from reaching an agreement on this.
We're far from ending our discussions. Now, as to the sums and faults, and I share a number of the points that have been made, our priorities are set, and we cannot completely rip up those which are important for our national territory and national policies in order to invest in issues such as defense or whether our European plans are underway. We need an integrated approach from the EU. Therefore, we talk about value when we talk about resources, when we talk about these sums of money. It's essential to look at what we actually have available and to look at what we are trying to achieve. Now, this is very closely related to our priorities.
Of course, the discussion on a cross-cutting approach will not work because different member states have different priorities. But I think we do have a lot in common as well, and we have to identify the priorities we share for this current MFF. There have been changes. Negotiations have meant that the document is very different from what it was originally. But Portugal is absolutely crucial to continue along this path.
There were two aspects here. Firstly, there is clearly not enough money available for the MFF in light of the priorities that have been identified and what we need. We want to speak with a common voice on the central shared policies. And then we have to look at the priorities, which are different depending on each member state, and everyone should be able to invest according to their needs.
Speaker 22
Thank you very much. Mister Jorge Miguel Cera is from the Portuguese parliament as well.
Mike.
You do not wish to take the floor?
Is one of your neighbors Mike?
It's okay. The
Then.
Speaker 26
We can move on with the list of speakers. Mister Onofrius Kullar is from the Cypriot House of Representatives. Thank you very much, Chairman. We have new priorities in the EU. And in Cyprus, we fully agree with these priorities.
But at the same time, we fully acknowledge the fact that if we want to achieve these goals, the role of the member states is extremely important. Member states have to play a role in carrying out reforms in order to become competitive. And we have carried out reforms in Cyprus. But it is obvious that we do need a new budget. And this budget has to dovetail with the new priorities that we have set for ourselves in the EU.
And yes, we might need a bigger budget. In order to fund this new budget and the new priorities, it is an extremely important point. How exactly are we going to fund it? In any case, it is European citizens who are going to foot the bill, and we have to explain to them that it is extremely important for us to achieve these goals. It doesn't matter whether it's going to come through the GNI contribution or through what we call the own resources.
The resources, at the end of the day, belong to European citizens. I think that this is the reality. We have to make sure that justice is a factor and that the GNI-based contribution is also the fairest. We have to increase our own resources in order to have a more generous budget, and that means that the contribution has to go up so that we have the same kind of ratio. We're not against new resources coming in.
But I don't know whether this has an impact on the European Commission's and European Union's lending capacity. And this is a question: what kind of impact will it have on what the commission can borrow? So, we have new priorities. We have new funding sources. So, how can we bolster solidarity?
Let me give you an example. Cyprus is a small country. It's a far-flung country. It's far from continental Europe. It does not have a strong industrial base.
We don't have industrial innovation, but we can contribute much more than we do or than we get back. And then, of course, there are other countries that have a strong industry and an electric grid as well. Thank you very much. Thank you. Mrs. Ziotia Chernoff from Poland.
Speaker 27
Colleagues, Commissioner, I believe this debate is extremely important: the whole debate on new resources for the European budget. But it's also a very complex debate because I think, at this stage, we have run out of easy options for new own resources. Everything that we decide upon will have to be preceded by a very in-depth analysis and debates, also in our home countries. There are two own resources that have been mentioned here, which I would like to draw your attention to. First of all, e-waste contribution.
Speaker 28
In Poland, we have made many efforts to ensure that e-waste management is mainstreamed. Companies have been encouraged to invest more, and they have been encouraged to rationally manage e-waste to limit the amount of electronic waste. When it comes to payments and fees in this regard, it is a complex issue. So, if we were to go ahead with this, we would have to be really well prepared, and designated companies that deal with that would probably have a lot of trouble adapting to this new system and might potentially be reluctant. And then another issue, the issue of this additional minimum levy, says the speaker.
Speaker 27
We have to make sure that we stick to priorities and just solutions. We might be in a situation where the tax or levy in question can be coupled with the e-waste contribution. Well, when it comes to new taxes, you can imagine that the business world and businesses would always be reluctant and would always say no. Whenever we meet them and talk to them, this is the reaction we get. So, if a decision was to be taken to introduce them, a lot of campaigning would probably have to be done, and a lot of thinking would have to be done in advance because the overall approach is rather negative.
Thank you.
Speaker 1
Thank you very much. The next speaker is Mr. Nitra is from the Czech Republic.
Speaker 30
Thank you very much. The Czech Senate is aware that when talking about new EU goals and objectives mentioned here, there must be sufficient financing. Obviously, the proposal of the Council was also discussed in our Senate last November. We have already sent our position to the European Commission. So, I would like to mention just a few points.
Speaker 31
The system of own resources has to be as simple as possible, transparent, predictable, and new own resources should not just shift resources from national budgets to the EU budget. And that is why we are convinced in our tech center that when talking about the ETS system, it could have a negative impact on member states and limit their resources for decarbonization, which is extremely important. As for the corporate resources, which basically means taxing businesses at the EU level, it could have a negative impact on our businesses and, paradoxically, even decrease the competitiveness of the EU industry and have an adverse impact on the resource size of the EU budget. And when talking about e-waste, tobacco excise tax, or the CBAM mechanism, all of them, apart from having a positive impact, could also mean a very big administrative as well as budgetary burden for individual member states. Thank you.
Thank you.
Speaker 33
Chairman, I'm speaking Finnish. The general guideline is that the total level of the MFF must not exceed the specified levels. We should release the pressures from the G and I contributions. All new income items must have an annual ceiling. The EU must not weaken its own competitiveness by creating a new administrative or financial burden or accompanying costs.
Speaker 32
For tobacco, Finland has already taken action, and this falls under national competence. Smuggling would increase if this were changed. The ETS-one or similar trading mechanisms are approved, but the price spikes should be cut, or there should be an annual ceiling on these. The ton of carbon dioxide, that price could be, for example, 30 euros per annum. A potential income could be income from e-waste.
This would require a uniform calculation basis, clear audit guidelines, and the CBAM mechanism could complement as an income source, but a ceiling should be placed on that as well. Legitimacy requires the ability to forecast and permanent automation, so we shouldn't create an endless extension of these resources. We should treat all member states fairly. Thank you.
Speaker 22
Thank you very much. Missus Inge Grasse from the German Parliament. Thank you. Thank you.
Speaker 34
Thank you very much. Of course, you can trust the Germans to get to the important topics, but I wasn't fully convinced by what I heard. Nor is it the case that when you think only of yourself, can we manage to think about everybody? So, I wanted to ask the question: what will the EU need money for over the next few years? And Commissioner, I think we have to do things somewhat radically different.
Speaker 36
We are faced with a number of challenges, for example, the defense of Europe. And this will mean that we are going to have to adjust the EU's competence. And this is fully the right way to go. So, I think we can't just talk about this theoretically or about where we get our money from. We have to look at it practically.
Speaker 34
For us, as a national parliament, it is going to be very hard indeed to look at this in any other way. Then, looking at cohesion, the cohesion policies over the last few years and fifteen years ago, I was a member of the budget here, and we saw what the commission for cohesion funds was used for: streets, hospitals. I mean, all of these things, which are national competencies, are important. And I think I would say these need to be paid for, but let's look at where the money can come from to do this. Then, I am not a revolutionary.
I'm not willing to contribute to funding a system that will damage our societies or create more bureaucracy for European businesses. So, keep a close eye on this. It's not going to be rocket science. We have to. I'm sure in a year's time, we're still going to be talking about this, but it'd be a shame if we're not closer to finding a solution by then. Let's listen.
Speaker 35
Let's try to avoid finding complicated rules to regulate our business. Let's look at what we've got and move forward with that, rather than trying to dream up new instruments and increasing the debt for Germany.
Thank you.
Thank you.
Speaker 25
Thank you very much. Thank you, Chair, and it's good to see you all here, members of national parliaments from many different countries. This meeting is very important. It's good to have these conversations, but they're very complicated discussions trying to find solutions around the system of own resources in such a way that the EU's priorities can be achieved. Now, our objectives and new goals have been identified in the new MFF.
Speaker 37
We're looking at a complete paradigm shift. We will have additional own resources. That's true. But part of these comes from national resources. If you look at tobacco duty, for example, or environmental issues as well, these interfere with the system of subsidiarity and proportionality that we have in place.
I do believe that we shouldn't try to separate ourselves and the member states into different groups. We do have to keep a close eye on where our share priorities lie. I hope that the new goals and objectives we have will allow us to find new solutions. Now, against the backdrop of this new paradigm, I hope we can find new financial solutions. Now, I come from a country that hopes to see great financial fairness and equity along the traditional lines of the EU, its values, and the challenges that we face.
Thank you.
Thank you.
Speaker 1
Thank you very much. The last speaker is Mr. Lamont Tom from the Belgian Parliament.
Speaker 39
Thank you very much indeed for this initiative bringing us here today. I see things a little differently from the chair of the budget committee. If we've learned nothing from history, it is clear that one flood may follow another, but taxes are never going anywhere. Now, when we look at competitiveness in Europe compared to elsewhere, it's very clear that many of our SMEs or businesses are choosing to invest outside the borders of the EU. And that's very worrying indeed.
That's why I would like to ask you to be cautious. Very often, authorities increase spending, saying, "Well, the resources are always there." And we heard from Commissioner Serfin a short while ago saying that the commission will be delighted to talk about expenditure, but we're not talking about expenditure here. We're talking about resources and income. And I think that's good.
I think it's important to increase efficiency at the EU level and in national parliaments. Thank you.
Speaker 1
Thank you very much. I'd like to thank all the speakers for their comments and remarks. I'm going to give the floor to the commissioner to comment and reply. Commissioner Seraphim, you have 5 minutes.
Speaker 7
Thank you, Mr. Chair. Many thanks for your comments and questions. As was stressed by one of the MEPs, it's really important that we have this dialogue in a transparent manner. Because, as I said at the beginning, the question of the owned resources is ultimately also decided by the national parliaments through the owned resources decision. Well, I think that what I would like to say before I comment on specific own resources candidates is that I do believe that the proposal put on the table by the commission when it comes to the size of the budget is a responsible one.
It's not excessive. It's not basically; what we propose is to preserve more or less the current level of spending, plus have some extra resources to pay back the NGEU-related debt. So, and that is despite the challenges. So I also understand the criticism from some of you that the commission should have put on the table a big proposal. But, as I said, responsibility was a driving principle.
And even more, it's not only responsible when it comes to the size, but it also looks very seriously into the challenges that we have and with which our continent is confronted right now. This was, I think, the question from Germany. This is the budget, the proposal of the commission, which is much larger than before and concentrated on European public goods. If you want, what are the increases? The increases are in research and development, doubling the resources allocated to research and development.
The increases are on competitiveness, including in the area of the defense industry, where we have a massive increase by a factor of five. So, that's what I wanted to say. Now, when it comes to the overall picture. When it comes to the specific points, I noticed that there were many positive comments on electronic waste. I do believe it is one of the extremely important proposals, also in view of the question of strategic autonomy.
We are, as Europeans, dependent on critical raw materials and rare earths from outside of Europe. We don't have many assets in that area, but we have waste. We have to recycle it. And the levy will incentivize the recycling of that strategic asset that we have: our waste. Absolutely crucial for the digital and green transformation.
Tobacco excise duty: I've heard a number of comments. I want to clarify one thing. We need to have a harmonized approach if we want to move forward with the new tobacco products. The directive in place right now is concentrated on tobacco products we knew fifteen years ago. Since then, we have had a lot of new products that are taxed or not taxed, depending on the member state.
And mind you, an element of harmonization is also needed to avoid cross-border tax evasion. And this is also, I travel, we all travel, yes, to Strasbourg from Brussels now and then. And we know that, on the way, there are different taxes in different member states when it comes to tobacco products. So this is the cross-border dimension that we need to take into account, and I should add even more that if the member states go that way and agree to extend the scope of excise duty also on new tobacco products, then there will also be extra benefits for the national budgets, even if part of it, 15% of the revenues, will stay in the EU budget. On corporate income tax, corporate resources for Europe, what I would like is not an income tax.
On core, what I would like to say is indeed, I confirm it's not an income tax, but I would truly like to have some elements of a fair assessment of what is there in the table. First of all, small and medium-sized enterprises are excluded from the scope. So, companies that have a turnover below €100,000,000 per year are not covered by CORE. And the companies in the first bracket that have a revenue of €100,000,000 up until a revenue of €250,000,000, then the levy is €100,000. So I understand comments also from our colleague from Brokl that it's a turnout. Yes.
But I think we have to be frank: it does not cover smaller and medium-sized companies. 98%, if not 95%, of companies in Europe are excluded from the scope. We are concentrating on the biggest companies. And to be frank, this is the only way. We are looking into digital companies in the financial sector. And I believe that we need to have an element of the corporate sector if we want to have a balanced package.
Even though I also understand that nobody is keen to contribute. But if we want to have a balanced package, we also need to have the corporate sector on board. And my last comment will be on the CBAM. In terms of the revenues for the EU budget, it is not going to generate a lot of revenue. But what I believe is important is also to think about the level playing field within the internal market.
Companies producing in Europe are paying carbon tax. Companies producing outside of Europe are not paying carbon tax. CBAM is a way to bring back a level playing field. And that's why we also believe that it is a proposal that should get your support. Last sentence.
I know they have, I spoke a bit too much. But this is also my appeal to the representatives of the national parliaments. Please look at the package as a package. And that's the only way forward in those negotiations because I know that there is not a single candidate who would be supported by everyone. So, either we build a positive scenario when we are trying to find a common landing zone, which is not the elimination of everything, or indeed, the next question will be where exactly we shall cut.
Thank you.
Speaker 22
Thank you very much, Commissioner. Mister Saint Thomas, you have 5 minutes for your concluding remarks.
Speaker 8
I'm Karis Topolie. Thank you very much. Just a few comments. A number of you mentioned digital service taxation. And I believe, given recent developments regarding the international conversation on how to tax digital companies, there is a real question there.
So, I try to address that. And the second aspect is maybe something that is missing, which would be a way to get own resources by putting external borders of the European Union to protect the market while taking into account competitiveness. So, the first element is the taxation of digital companies. You may remember, it's been more than 15 years now that the question of where and who taxes digital companies has arisen. Large American companies operate in Europe, but existing international tax rules result in their profit being taxable initially in tax havens and now mostly in the U.S.
S, but not where the revenue is generated. We're talking about the profit. And this is due to tax treaties, which prevent European countries from taxing these profits. There is an issue which is universally recognized, and there were efforts at the OECD and globally to find a multilateral solution to better share taxing rights on semiconductor companies, pharmaceutical companies, but mostly digital companies. A number of countries refrain from enacting digital service taxes, which are taxes on turnover, while waiting for a global solution.
The U. S. Declared the global solution dead last week. So, there is an issue for Europe to decide what to do. Digital service taxis are not good taxis because they are taxes on the revenue and not on the net profit.
And they may trigger difficulties and tensions with the U.S. S said that they will retaliate from a tariff perspective. That said, they retaliate in a very unclear legal manner. So, there is a question there. Is Core a substitute for that?
I'm not so sure, even though it may cover some situations there. But that's something that Europe cannot avoid discussing in the context of its own resources. I'm sorry to bring that up. It's geopolitically sensitive, but Europe has to react to it. It's not a recommendation to implement a European digital service tax, but an invitation for Europe to reflect on that.
There is no global solution. There must be a European solution. The challenges resulting from artificial intelligence and the profit shifting to the main providers of artificial intelligence will only emphasize and magnify this issue. The second aspect, which is not included in the commission's proposal, is a way to protect the European market by securing the external border of the European Union. A number of countries today do not have withholding taxes on flows of revenue leaving the European Union to other countries, while many others do.
But as you have the freedom of circulation within the European Union, it's easy to leave one country that has an external border to go to another EU country which does not have external borders, allowing third-party investors to avoid paying taxation within the European Union. And I believe this could be addressed, as well as sharing the revenue resulting from the global minimum tax in a purely European manner. Finally, all that needs to be taken into account, as the commissioner and a few of you said, is the need to ensure competitiveness in Europe. We badly need to improve competitiveness, and we need to be careful not to increase corporate taxation without keeping this in mind. Finally, I believe, as the commissioner said, that it has to be a package, and you collectively have to move away from the net balance logic if you want Europe to face the current, existential challenges.
And in that sense, the proposal made by the Commission really moves in the right direction. Thank you.
Speaker 2
Thank you. Thank you all. This closes off the first part of the session. I propose to take a break for 5 minutes and resume at 05:00. Thank you.
Speaker 22
Dear colleagues, shall we take our seats in order to proceed to the second part of our meeting? And once again, allow me to speak in Greek. So, I will give you a couple of seconds to put on your headphones, for those of you who need them.
Speaker 1
Ladies and gentlemen, for the second session, we'll be discussing the next multi-annual financial framework (MFF), and more specifically, the new national and regional partnership plans. The commission has put forward major novel features in the structure of the EU budgets, especially when it comes to the shared management funds, which are managed together with member states. The national plans now include the CAP, the cohesion policy, and the migration funds, among many others. Now, this concerns us all, and I look forward to the debate that we will have. We will kick off our discussion with two distinguished guests: the honorable president of the Committee of the Regions. Excuse me.
The President of the European Economic and Social Committee, Mr. Seamus Boland, and the Honorable President of the Committee of the Regions, Mrs. Katta Tóth. Presidents, I will give you the floor, and we will start with President Boland. You have the floor for your introduction for approximately 10 minutes each. Thank you.
Speaker 40
Dear Chair Obertwelt and dear Co-Chair Pantelides, honorable members of the budget committee, members of the national parliaments, and dear Katha. It's a pleasure to address all of you today on this very important topic. Allow me to thank you all for your central role in shaping the European Union's financial architecture. In today's geopolitical climate, budgetary choices are strategic choices. But the fast pace at which we have to make decisions cannot come at the expense of accountability towards our citizens.
And let's not be mistaken, we live in extraordinarily turbulent times where the news and the atmosphere change almost every hour. So, we are debating the next multi-annual financial framework at this very defining moment. Europe must strengthen its strategic autonomy economically, technologically, and in terms of security. We know all of that. But that, in itself, means we decide on budgets at the most extraordinary times.
We must do so while preserving our social model and territorial cohesion. A competitive Europe cannot leave popular regions behind. It cannot leave any regions behind, and it certainly cannot leave people behind. This is why the next MFF is not simply a financial framework. It is Europe's investment for autonomy, competitiveness, and cohesion, and it sets out our agenda probably for the next 8 to 10 years.
In fact, Europe still faces significant investment gaps in the energy transition, agriculture, fisheries, defense, innovation, and digital infrastructure. To meet these challenges while ensuring social justice and territorial cohesion are preserved, we must go beyond symbolic adjustments and secure budget increases in real terms, especially in terms of the EU's gross national income. It is not an act of extravagance. It is a precondition for resilience, competitiveness, and, most of all, credibility, especially among the citizens of Europe, where they are probably at the highest level of doubt in terms of Europe that they have been for many years. Every euro invested in cohesion, in research, in sustainable food production, in our people, and in our regions is an investment in Europe's collective security, prosperity, and resilience.
We support new EU-owned resources, including revenues linked to climate goals, provided they are coherent with the EU's overall goals. However, new resources must not undermine European competitiveness, and they must not increase inequalities between member states or regions. Coming from a rural perspective, I completely understand the continuous tension between rural and urban regions. This is a massive challenge in normal times, but in these abnormal times, that challenge is tenfold. New resources are important.
Revenues should support the decarbonization of energy-intensive sectors and protect workers and vulnerable regions. Strategic autonomy requires financial autonomy, but it also requires fairness. Turning to the new national and regional partnership program, let me say this. We welcome the Commission's intention to simplify and introduce greater flexibility. However, we need to be careful.
Simplification must not come at the expense of identity, predictability, and long-term objectives. Cohesion policy, the common agricultural policy, fisheries, and other treaty-based policies, and may I underline this, are not interchangeable budget lines because they are so immersed in the treaty. They embody commitments enshrined in these treaties, notably Article 174 and 175 of the TFEU and Article 3 in the TEU, which are territorial cohesion and solidarity. Grouping diverse priorities such as agricultural cohesion, migration, and security under one umbrella risks creating structural competition between them. Absolutely dangerous in the worst possible way.
In times of crisis, short-term security pressures may and do crowd out long-term investments in social inclusion, rural development, and regional convergence. Again, I stress the care we must take in managing the short-term security requirements with the possible sacrifice of these other areas. That would weaken ownership and undermine trust, which is a major asset in the future of the EU, and it would seriously affect disadvantaged groups. So, we are equally concerned about the shift in responsibility from the regional to the national level. We can see the financial reasoning behind it.
But as we know, these things have a habit of merging and disappearing, and suddenly the priority in regional areas is lost. It's just a matter of evolution, and it is dangerous. So, be very careful about that. The principle of subsidiarity and multilevel governance must not be weakened, and I am sure, not taking words out of her mouth, the Committee of the Regions president, Cattu, will agree with me. These are extremely important.
Partnership is not just a formality. It is a condition for success. National and regional partnership plans must ensure the effective and meaningful involvement of local and regional authorities, social partners, civil society organizations, and sectoral representatives. I will make this point. We were criticized as Europe by a certain vice president not far on the other side of the water, who said Europe is all jaw, jaw.
And I remember thinking, I'm very proud of that because we do talk to each other. We do talk to civil society organizations and social partners. We have to. We're 27 members. If we do not talk to each other, we get nothing done.
We also make sure, by talking to people, that we leave nobody behind. So I'm very proud that we exercise a lot, Jojo, because that is the secret of Europe's success. In all phases—programming, implementation, monitoring, and evaluation—this is why ESC is proposing to have social partners and civil society organizations check along with the regional check. The ESC calls for a revision of the code of conduct on partnership and for minimum standards of consultation where the partnership is ineffective. Without accountability, partnership risks becoming simply symbolic.
Funding must remain available to all territories in line with the treaty, and remember, we have the treaty. Regions must not be penalized for national-level failures. Subnational actors should not differ or suffer in cases of rule-of-law disputes. So, we also propose stronger thematic concentrations, particularly on food security, inequality, and ensuring that we do not deny civic engagement. Attention must be paid to the eastern border regions bordering Russia and Belarus, strengthening their economic situation. Finally, I have to say this.
We need to be careful that we do not lose out on the leader program. It is a valuable program from a bottom-up basis. We are particularly critical of the absence of a dedicated Just Transition Fund. Again, we need that to happen. The disbursement of EU funds must not become a tool for unrelated policy pressure.
So, honorable members, dear chairs, may I say this: let us ensure that what we are looking for is the strengthening of partnership, consolidating cohesion, and safeguarding the social dimension. I hope and wish that you have a really good discussion on this matter today and in the coming days, and I thank you sincerely for the honor of addressing you all. Thank you for listening.
Microphone, please.
Speaker 42
Thank you very much for the floor, dear colleagues. I'm the President of the European Committee of the Regions. Who are we? We are the voice of the local politicians in the European sphere. We have altogether more than 700 locally elected politicians from the islands to the metropolitan areas, from agricultural and rural areas, from small towns to big cities.
Speaker 41
We represent local realities here. All of our members are elected in their own member states, in their own cities, and they work at home, trying to implement and digest European legislation. Our role as the Committee of the Regions is to give constant feedback on our realities. What is digestible? What is nondigestible when implementing all the goals we have?
Okay. I am the more pragmatic one here on the budget. How I see the budget and our focus, our main focus within the national envelopes or NRPPs, however you call it, is cohesion policy. I was listening to the last discussion. What is quite clear, and I think it's always important to clarify, is that the European Union's budget is not the sum of the budgets of the member states.
It is a relatively small budget, although it seems big from Budapest, from where I come, but it's not a big budget. The agreement is that we spend together around 1% of the GDP. That is the agreement, and there is no change to that. As I understand, there is no clear agreement on our own resources, so this budget will probably stay as it is. So when you add new priorities, it means you will take money away from one place to another place.
You will take money away from some territories, and you will give it to other territories. This is the reality. What is cohesion policy in reality? It is not a charity fund. It's not a solidarity fund.
Cohesion policy exists because it is part of the single market mechanism. What we agreed on together, our member states, is that the single market, the functioning of the single market, provides benefits for all. Because there is a single market, there is an extra GDP in general on the European level, 7, 8, 9% extra GDP. But because the benefits and the costs are not distributed evenly in time and space, there is a reinvesting mechanism, a redistribution mechanism. This is called the cohesion policy.
It's not a charity fund. Because cohesion policy is an investment policy, it invests in every single European region. It helps the transition of every region because cohesion policy is not only about less developed regions. Every single region, from Germany to Cyprus, is in transition in demography, industry, digital, and climate. And through cohesion policy, which is one of the most important mainstreaming tools of the European Union, by spending European money, you have to consider all the policies, everything from gender equality to energy transition, climate neutrality, accessibility, and water resilience.
It's a very important mainstreaming tool. From small money, you can reach very far. And why do I say small? Because if I compare it to the competitiveness debate, if I were to use all cohesion funds in a year, every single euro cent would help the transition of thousands of municipalities and hundreds of regions. From all of the cohesion funds, I can build one gigawatt of computing capacity from the whole budget.
It means three supercomputer centers, or, if it's smaller, it means about 10 large AI centers. That is the equivalent. I think it's very important to understand. So, what is happening in the European budget? The idea is that there is no new money, just the same money, so we are reshuffling it.
And there was an agreement because cohesion policy is a European policy, and the European Commission is detaching itself from two important basic policies. One is the agricultural policy. One is the cohesion policy. The proposal puts these two policies in a national envelope, lets them compete with each other, and puts all the complexity and conflicts on the shoulders of national governments. That is the national envelope.
National envelopes, the NRPPs means here is an envelope of money with all the problems listed. That's your problem, member state, from now on. And the other part of the budget is dedicated to defense and competitiveness, and we all agree on these priorities. What we do not agree on is where the money is coming from and whose responsibility it is. And I will leave you here with just one number, and I think there are some member states that will be interested in this number.
If I look at the distribution of the centrally managed funds today, the Horizon Fund, which will be doubled in the next budget, the first region, the top beneficiary of Horizon Funds, on its own, gets more funds than the bottom 130 regions altogether. The top 20 regions get more than half of the Horizon Fund, and this logic is expanded. So what is happening in reality is that a policy that was serving and helping the transition of many small and medium-sized companies in a very decentralized way, because cohesion policy is not just about renovating hospitals. So, helping small and midsized companies, cities, towns, and regions in the transition will be redistributed and highly concentrated in a few places. And this is a point, I think, where this discussion is not yet closed.
Thank you very much for your attention.
Speaker 1
Thank you very much, Mrs. Catacuto, thank you for your remarks. I'm now going to open the floor. The rules remain the same. Same rules as in the previous session.
I already have names on the list. If anyone else wants to take the floor, let me remind you that you have to fill in the yellow sheet that you have been given to indicate that you would like to take the floor. Let me also remind you that I would really appreciate it if you could stick to the two minutes you've been given, because that will give everyone a chance to speak. So, we're going to start with Ms. Silke Schneider from the German Parliament.
Speaker 43
Thank you very much. I'm going to speak German. Mr. Chairman, ladies and gentlemen, as a member of the German Bundesrat, I'm speaking on behalf of the lender in Germany, and I'd like to recall the importance of European money for promoting regional development. The European Fund for Regional Development is the key instrument to achieve that, by which means the lender can help small and medium-sized companies and regional research undertakings.
And these funds make an important contribution to progress in climate and environmental protection, regional development, and other important areas. So, this is funding which must be sufficient and be money that we can plan for and count on, taking into account the different structural requirements of the different regions. Now, I'm very worried that with the 14 different objectives and objective groups, and the different funds from the agricultural policy to the European Social Fund, these are going to be put into a single fund. I think, at a national level, this is going to lead to massive conflicts of distribution based on very limited, reduced European funds. So, we need to have these structures coordinated, and this may be possible. But there is a risk that things get terribly held up.
There's also the risk that the particular peculiarities and the diversity, which are the core of our European identity, are not given sufficient credence and are not sufficiently heeded. The other problem is that by bundling these programs and placing emphasis on competitiveness and defense, particularly when it comes to social, environmental, climate, and local issues, they will fall short. I think it's extremely dangerous in the European Social Fund and the structural funds in particular, which promote cohesion, agriculture, and regional rural development projects, especially at a time when there are antidemocratic forces trying to throttle European forces and lead to polarization. This is all going to be at risk. And I say that on behalf of the regions in Germany, the German lender.
So, ladies and gentlemen, we have to ensure that European diversity, sustainability, and regional development in the future are not left behind by the website. It's certainly in that way that Europe will remain strong for its citizens. I would plead, in the case of the German Bundesländer, to ensure that the regions have a clear voice and can adequately have the rural development budget properly defended both there and in the European Parliament. Thank you.
Thank you very much.
Speaker 45
Colleagues, the proposed multi-annual financial framework of the European Union for the period 2028-2034 is expected to enable the development of the European economy, its greater competitiveness and independence in a global framework, as well as a safer place to live for EU citizens. It will be beneficial for the Republic of North Macedonia, as well as other candidate countries for EU membership, to align with this multi-annual financial framework and invest in the same sectors as envisioned at the EU level in the coming period. Although each candidate country has its own national priorities, investing through its national budgets into sectors and programs proposed in the multi-annual financial framework will enable faster alignment of their economies and societies with future EU membership. Among the sectors that the multi-annual financial framework focuses on are investing in education and creating the necessary skills among the youth, investing in clean energy and decarbonization, health, agriculture, new technologies, and innovation. As a representative of a candidate country for EU membership, I particularly welcome the part of the multi-annual financial framework 2834 concerning the support of candidate countries for EU membership through the Global Europe instrument, which represents a continuation of the decades-long support that we have received from the EU.
Speaker 50
It will be beneficial for a portion of this support to be directed towards cross-border cooperation between EU member states and candidate countries, with particularly significant support needed for the area of environmental protection. This would also benefit EU member states, as environmental issues now have no borders. The Republic of North Macedonia has adopted the law on balanced regional development, which aims to ensure balanced and sustainable development across the entire territory, reduce disparities between planning regions, increase the competitiveness of these regions, and support inter-municipal and cross-border cooperation.
Thank you.
Speaker 44
Just one sentence. Please. Finally, I would like to express my hope that, for the period of validity of the multi-annual financial framework 2028-2034, the Republic of North Macedonia and the other candidate countries will become member states of the European Union. Thank you.
Speaker 22
Thank you very much. I remind you that we should stick to the two-minute frame in order for all of us to speak. We will continue with Mr. Carlo Ressler from the European Parliament, please.
Speaker 46
Thank you, dear members of the National Parliament. So, welcome here to the European Parliament. Thank you also to the two presidents for setting the scene. And I think that their reflection, but also the first two interventions, highlight a shared understanding across different institutions, and this is that the national and regional partnership plans will determine whether Europe can really maintain strategic investment capacity at a time of profound geopolitical and economic pressure. So, I can tell you immediately at the beginning that as three rapporteurs for the file, which is handled jointly between the budget committee, AGRE committee, and the committee for cohesion and regional policies, we have started real legislative work on this regulation.
And I think that it is quite evident that the proposal marks a significant shift from the traditional use of EU funds. And this is mostly because of the attempt to merge policy areas from agriculture and fisheries on one side to border management, defense, and social policy into a single national plan. This can theoretically create opportunities for greater coherence. But at the same time, it also represents, obviously, a very delicate and politically sensitive make-or-break moment for the next MFF. We will have a presentation of ECA's report on the NRPPs tomorrow at the joint meeting of the three committees.
Speaker 49
And I think that one of the main questions will be about the simplification because it's quite evident, as ECA also says, that this new concept is trying to merge very different policies with very different objectives, time horizons, and delivery logics into one instrument, and this is definitely going to be one of the biggest problems or challenges in terms of these national plans. The question of flexibility is another crucial dimension since it should not undermine predictability or long-term planning, and that's why we propose to decrease the flexibility from 25% to 5%. Finally, I think it is quite clear that we need three main dimensions: a European dimension with a clear European added value, but also the success of the architecture will ultimately depend on the level of national ownership. National parliaments are especially important here. And then, at the third level, I think that the representative from the Bundesrat has spoken mainly about this: regional involvement.
Speaker 48
As reporters, we are going to fight for this, and we are starting with the real legislative work, but we are happy to hear the opinions from the national parliaments as well.
Speaker 22
Thank you very much. We will continue with Mr. Filippo Serra from the Italian Chamber.
Speaker 18
Chairman, we're very worried about this approach and this attempt, and the fact that we're going to have one single budget for this CEF, cohesion fund, and other expenditure linked to security. We're extremely worried about lumping all of this together because Italy is a southern European country, but there are also other less-developed regions in Europe. And for us and these other countries, cohesion is a vital policy. It's one of the founding policies of the European Union. And the fact that you're going to put all of this in a single fund means that this harmonious development that we've had up to now will not continue.
Speaker 19
Yes, okay, we have had a problem with expenditure. I'm not saying that we haven't, but cohesion policy has meant that less developed regions have had the prospect of development. But now that we're going to have only one single fund, that's going to weaken cohesion policy. And this will affect the regions. There's an attempt to renationalize these policies.
If everything hinges on the availability of national governance, then the fact that the regions are less involved means that expenditure isn't implemented as efficiently. You will not be able to focus investment on regional development. I can see in this assembly that there are other colleagues who have doubts about it. So, I think we're still in time to halt this and really change the setup. The Five Star Movement believes that a budget focusing on weapons and arms instead of cohesion and providing support to less developed regions is a budget going down the wrong track.
And we have to do something about this. So that is why I'd like to repeat what I said before. We're still in time to stop this, so let's do that.
Speaker 22
Thank you very much. We will continue with Mrs. Lipovac Pekar is from the Croatian parliament. Here. Please.
Thank you.
Speaker 51
Thank you very much, colleagues, members of national parliaments. I'm here on behalf of the Committee for Regional Developments and the European Funds of the Croatian Parliament. What we would like to achieve in the next MMF is to put the emphasis on equal regional development. I'm going to share an experience in Croatia. Croatia is very successful in using the Resilience Fund, and the system that we set up enables transparent management of funds and monitoring of reforms and investments.
But on the basis of this experience, we can see some challenges related to the next MMF. This mechanism was great at the moment when the European Union was supposed to exert a quick response to a crisis. But the model that is based on national plans is related to results, and it has some benefits: flexibility, fast mobilization of resources, and a stronger connection with the reforms. But this model cannot be reflected in the next MMF. We need to take into account the different purposes of this mechanism related to the MMF of the union.
The union MMF needs to be an instrument to realize common goals and policies, especially the cohesion policy and the common agricultural policy, because these are key to the development of social and territorial cohesion. And in this sense, the future model should be based more on the results achieved and real impacts, and not only on the implemented steps. We need to see what is really being achieved. One of the key challenges ahead of us is simplification. The reduction in the number of national plans is usually presented as a simplification, but the simplification needs to be directed at end beneficiaries, especially those who need to implement projects.
Thank you very much.
Speaker 22
Thank you very much. Let's continue with Mr. Peter Kalivota is from Slovakia. Thank you.
Speaker 17
For the floor, Chairman. I'll be speaking Slovak. Discussion on national and regional partnership plans and the new form of European budget. I would like to say that our experience with the plan has shown us the importance of milestones and objectives. We know that municipalities need to specify the milestones and objectives, not experts without contact with citizens.
Many regions are missing basic infrastructure, and we now need to plan other things. It is like having a designer sofa in a house without water, but we welcome the intentions of the commission to support countries neighboring Ukraine. Increased socio-economic costs need to be reflected in the new budget. This is correct, but it is a good example of going the right way. Colleagues, I'll be sincere.
Speaker 16
If the new budget is to be successful, it needs to be a real partnership between Brussels and the regions, and not an instrument of the Commission to exert pressure on national governments and regions. This is the only way to make it a real instrument that brings specific added value to our citizens in our cities and villages. Thank you.
Speaker 22
Thank you very much. Let's continue with Mr. Jean-Marie Maison from the French Senate.
Jean-Marie Mizzon
Thank you, colleagues. The prospect of there being a merger onto the next financial planning period for less money to put into a single envelope for the whole continent, and then the reactions to it, I would agree with. The Common Agricultural Policy is really the cement that holds our Union together, and it, at the moment, plays a critical role in providing food security for our continent. This is a key moment when, internationally, things are breaking up and regional blocs are hardening. Now, the Committee of the Regions has put this in very clear terms.
Agriculture and cohesion policies are essential for guaranteeing life in our towns and rural areas, and they can only work if we have an alignment of the different levels of wealth throughout Europe. Now, for the next FFP, we must not unpick the strength behind our union, and we must make sure that we do not end up with too little money. Let me just say a few words about the national and regional partnership plans proposal. This plan is for simplification. The commission is hoping to move from a logic of financing by cost to financing by performance.
And in order to have these plans come into place, we need to answer some questions. How are we going to be able to audit these funds to prevent fraud? How are we going to come up with sufficiently robust, precise, and homogeneous performance indicators for the whole European continent? How are members of the National and European Parliament going to be able to carry out their scrutiny role in the face of this new proposal for the centralization of certain powers of the executive? Thank you very much.
Good.
Speaker 25
Good afternoon. Once again, I'll now be speaking about the NRP. This is a very important topic for us. We're talking about regional matters and more diversified sources of funding, funds which come not just from the COP but from occasional plans and elsewhere as well. And it is possible that the next MFF for 2028 to 2034 will also cover the needs of a more competitive Europe with greater added value, involving the issues of territorial cohesion that are problems for all of our countries.
We have overseas territories, outside most regions. There's a lot of diversity across the EU, and we need to ensure that the NRPs are fit for purpose and can work well with the currently existing European funds. This is, or will be, quite a challenge, something with which all of us are concerned, but also given the different speeds at which the EU is now functioning to track Europe, there may be some countries which are no longer protected and are more vulnerable. And we need to focus on the needs identified by each member state. And hopefully, the next MFF will lead to greater strategic integration through multilevel governance.
Speaker 37
We need to focus on the most appropriate level of government for each policy throughout our regions and territories. Thank you very much, once again.
Speaker 55
Thank you, sir. Dear colleagues, the Republic of Serbia closely follows the development of the new model of integrated planning of investment and reforms. We see the partnership plans as an important step toward a more strategic, coordinated, and results-oriented use of European funds. We especially welcome the strong emphasis on partnership, territorial cohesion, and the increased role of regional regions in defining development priorities, as well as the clear link between investment, reform, and measurable outcomes. Last week, in the Serbian parliament, we had a public hearing about the law of cohesion, and next month, we will adopt it in the plenum.
Although Serbia is not yet a member of the states, this approach is highly relevant for the candidate's country. This is imperative for priority government policy and for our Serbian president. We are working to allow national development plans with the medium-term budgeting framework and to strengthen regional cooperation within the Berlin Process and European fund for the implementation of infrastructure projects, energy transitions, innovations, digital transformers, and the implementation of artificial intelligence. Financial support from the EU EPA for the last six years is required, along with sound planning, effective coordination, and transparent reporting. And for that, we have the active measures.
We also believe that partnership plans could support the gradual and merit-based integration of the Western Balkans into selected EU policy and investment mechanisms. Serbia remains a reliable and constructive partner of the European Union and attaches great importance to the dialogue with the European Parliament. Thank you for your attention.
Speaker 13
Thank you. The cohesion policy in the next MFF must continue to benefit from a well-defined, dedicated budget. Negotiations must always preserve the intergovernmental balance, as defined by the conferral principle, to avoid the risk of a centralizing drift. Italy has expressed a political reservation on the single fund approach, believing above all that the CAP and cohesion should be clearly identified and have dedicated and ring-fenced resources. The same should apply to policies related to the management of migration and enlargement.
Fair distribution of CAP support must take into account production costs, the cost of the land factor, the differences between agricultural income and income from other productive sectors, as well as the differences between member states in terms of purchasing power parity. When deciding on the criteria for allocating funds among the least developed regions, the commission should consider a weighting mechanism that takes into account specific factors that aggravate the conditions of these regions, such as the cost of living, costs related to migration flows, the incidence of needs among the younger population, and the incidence of working poor in the labor force. The latter factor has already been taken into account in the criteria for allocating funds under React EU and the Just Transition Fund. The commission should identify funding instruments specifically aimed at supporting the most disadvantaged areas of Western Europe, such as those falling within the so-called Objective One areas, which are severely affected by international competition in traditional industrial sectors. With regard to heading two, there is appreciation for the new European Competitiveness Fund, but a call for a balanced approach to support not only the technologically advanced sectors, but also traditional industries.
For what concerns the delivery mode, we shall reflect on the experience gained from the implementation of investments and reforms promoted by the RRF, building on the lessons learned in terms of good practices while also identifying and addressing critical issues. In conclusion, I believe it's worth reiterating the importance of simplifying the administrative and management burdens of European businesses for competitiveness and economic growth. I therefore call on the European Commission to be even more ambitious in this direction, with the ultimate aim of promoting the development of European businesses, with a particular focus on small and medium-sized enterprises, which characterize the productive fabric of Italy and all member states.
Thank you.
Speaker 14
Thank you very much, Chairman. I'd like.
To start off, I want to say that we're very proud when we hear the Greek language from up at the top table. So, we had Mr. Pandalides, the deputy chair of budgets. He was speaking Greek in both sessions. But let me say that when it comes to drawing up the budget for 2028 to 2034, the most important aspect is the national and regional partnership plans. The new multiannual financial framework, or multiannual budget, sets new priorities that include, among other things, enhancing European competitiveness, defense, security, and crisis management.
Greece supports these priorities. After all, we have been at the helm of the adoption of the RRF both for European defense and to manage migration. But at the same time, for the Greek government, cohesion policy and the CAP are also top priorities. It is the European treaties that enshrine this as well. Given the problems in the primary sector, I don't think we should reduce the money allocated to the first pillar of the CAP.
In other words, direct payments to farmers. All the political parties in the Hellenic Parliament agree that the EU budget has to serve the purpose of the CAP and common cohesion policy. So that is why we have to look at the overall amount allocated to the budget and the MFF, but also the structure, so that we're very clear as to where resources are allocated. We have to make sure that the distribution is predictable. In other words, each and every member state needs to know how much money it is going to get from the get-go.
As I said in my previous speech, Greece supports increasing the EU's revenue, but national contributions have to be proportionate to the GNI. We think that the Commission's proposal is a solid basis for dialogue, but we're going to have to carefully reexamine certain specific issues. We have to look at the structure and the priorities. Thank you.
Speaker 57
Thank you very much. Thank you very much for the introductory notes. So, in 2020, I was also Minister of Regional Development and EU Funds, finishing the CPR package. And I fully agree with the President of the Committee of the Regions that cohesion funds are not charity. Croatia has used our funds so far to increase its GDP from 61% to 78% of the average EU.
Speaker 56
That's the convergence. That's what we want to do. We also use RF recovery and resilience, and I'll talk to Mr. Ressler and the other part of the European Parliament delegation that was last week in the Croatian Parliament. We are very proud of how we use RF to recover in New Zealand. We got 13% of GDP, and our national debt is only 56% of GDP.
And we have growth of two to three times more than the Eurozone. So the national and regional partnership plan of €16,800,000,000, we are satisfied with the number. But what we want to see are three pillars: competitiveness, social inclusion, and common agricultural policy. And within competitiveness, we really like to look deep into niches where Croatia can be competitive and contribute to the global market. One of the examples is the Center for Excellence for Semiconductors, where Mr. Ressler was also a rapporteur on chipsets.
Speaker 58
Regarding social cohesion, I fully agree with Mr. Boland on the topic that we need to have social dialogue and a strong civil society. We managed to decrease the number of people who are in social exclusion by 350,000 in the last 10 years. And we are very proud of our vivid civil society, especially of a program called Zajeli, where 20,000 unemployed women provide their care for 100,000 of our citizens, and, of course, the common agriculture policy. I would agree with ECA that the next MFF shouldn't be used to address the budget holes in national budgets. We need to see how to respond to all three of these issues.
Speaker 59
But from Croatia's stance, I would say competitiveness, social inclusion, and the old tradition policies. And I would agree and conclude that cohesion is not a charity fund; we need to use it properly as the treaties require us. Thank you very much.
Speaker 23
Thank you very much indeed, Chair. This new MFF is the first opportunity we have had to discuss it, and we do have some concerns regarding the priorities, objectives, and changes introduced compared to the current MFF. The idea of having a common fund, of course, has to cover a number of new priorities, especially for certain member states. But it's important for us to ensure that other member states do not lose out. The COP is absolutely crucial for Portugal.
Agricultural issues are central, and this will have a direct impact on economic and territorial cohesion, which is absolutely crucial for the economic development that our country needs. We have seen impacts over the last few years as a result of policy changes in the EU. We believe that this new common fund, this centralization of funds, and the national centralization of decision-making without keeping a close eye on the regional aspect and the diversity that exists across the EU is very concerning. We believe that this means there has been a shift in objectives and a shift in the goals designed for the EU's funds. We believe that this is worrying because, if it is true that the document we were looking at today is not the same as the text we looked at in June, it is still not fit for purpose.
A number of issues have been removed from the MFF, including concrete policies that have been simply removed. They are not covered by the common fund. So, we just wanted to flag this up to the Commission. We hope that our views will be taken into account, and we will call upon the European Parliament to ensure that the cohesion policy is not completely abandoned, because the economic and social development of a land such as Portugal needs to be supported.
Thank you.
Speaker 20
Thank you very much, Chairman. I'd like.
To thank President Boland and President Tutu for their excellent speeches. I think you've all realized that there isn't much enthusiasm for the new MFF plans and for this huge change. If I'm reading the room properly, I think it's extremely important to give a voice to the national parliaments. We cannot have the European Commission, responsible for implementing the European budget from beginning to end, without any involvement of the national parliaments. Because before, I think the change was not just administrative.
It's the spirit that is different. It's a huge change from before. Cohesion policy was very clear. It was all based on how developed the country was. There was multi-annual predictability.
And it was the regions that ran independent programs. Disbursements were made depending on the take-up rate of the money and on the convergence rate. But now we have a new national plan, which is absorbing the CAP and the cohesion policy. And with milestones similar to the RRF in Greece, we did not have a very good experience with the RRF because there were no consultations whatsoever, unfortunately. So, we wouldn't want the MFF to have a similar approach.
We don't want the same kind of symptoms. So, we have to protect the roles of the regions. And therefore, the question is pretty straightforward: Do we want cohesion policy to become a national policy, or do we want it to be a European structural promise? Do we want cohesion to be a European responsibility or just a national responsibility? That is the question.
Sir, President.
Speaker 60
Chair, colleagues, the debate on the next MFF for 2028 to 2034 is, more than anything else, a political debate on the future of the EU. We are not just talking about figures or financial instruments. We are talking about choices and development models for post-2027 Europe. The next MFF is being negotiated against a particularly demanding backdrop. The union has been faced with new pressures: competitiveness, digital and environmental changes, and strategic changes to the EU policy.
Now, the European budget is subject to considerable limitations. This means we need to focus our resources and maximize their impact. It is crucial to keep a close eye on what has always been one of our strengths: cohesion policy and multilevel governance. Economic, social, cultural, and territorial diversity of the EU is not one of our weaknesses. It just means we need different responses across the EU.
No one is better placed to know this than the regional and national authorities. We all know that achieving this delegate balance will be particularly tricky in the next MF effort. It is right to be ambitious and strengthen competitiveness across the EU, but we cannot do this by increasing territorial inequalities. Quite the opposite. Without social, territorial, and economic cohesion, we will not be able to move forward with the correct European choices.
We need simplification and predictability. These are crucial to ensure that the funds have a real impact on European businesses. This is especially important for those regions with a proliferation of SMEs and outermost regions, as is the case for my region in Madeira. Now, bearing in mind the national objectives and the Union's objectives, the risk of renationalizing cohesion policy could mean that member states do not have the economic, social, and territorial cohesion they need in the next MFF.
Thank you.
Speaker 32
You, Chairman. I use Finnish once again. The national regional partnership plans seem very interesting. I'd like to pick up the Eastern and Northern Finland subsidy. In the accession treaty, the cohesion objective considered the northern areas where the population is very sparse. And we had an additional allocation in the cohesion policy for these areas.
If we look at these national and regional partnership plans, this northern dimension must be considered with a supplementary allocation, which would be between 2021 and 2027. This is one of the core parts of the cohesion policy in Finland. If we want genuine partnerships, we have to have the regional and local communities involved in the implementation, not only the central government. In Eastern and Northern Finland, regional support must be maintained. It's not only regional policy; it's also a question of security and defense policy that protects the whole European Union.
We should have a supplementary allocation of €50 per inhabitant. That would mean €227,000,000 in Eastern Finland and €192,000,000 in Northern Finland. And just an observation in closing: the impact of this supplementary allocation has been half of the expected results. It must belong as an integral part of this cohesion policy in Finland.
Speaker 5
After having heard all of you, or at least a lot of you, we go back to our two distinguished speakers, President Boland and President Tutto. First, Mr. Boland, please comment on what has been said for five minutes.
Speaker 40
Thank you very much, and thank you again to all of you for the fascinating and interesting questions. And clearly, I am hearing very loudly that there are concerns, especially about the mixing or the merging of various national and regional funding. And I think we and the ESC have certainly made it very clear that we are concerned that the long-term outcome of such a convergence will effectively eradicate or reduce their effectiveness in certain areas. And I think some of the speakers have said merging policies with different difficult objectives is often a recipe for disaster, and it's my words because, really, the objectives don't change. But if you keep saying that all these different objectives must answer to one particular fund, then you find that some of them will lose out.
So that is a concern, and it also threatens the subsidiarity principle, which, you know, we hold in high value in this Parliament and indeed in the Commission generally, or at least that's what I would have thought. In terms of key funds like the Common Agricultural Policy and others, we talk a great deal about why they're in existence. And one of the myths that I love to dispel, especially with the common agriculture policy, is the myth that it's some kind of subsidy just for farmers. No. It's not.
It's a subsidy for the consumers. Consumers benefit hugely from the Common Agricultural Policy because if you were to take the full price of production and pass it on to consumers, I think you would find food, in particular, would be an extremely expensive commodity. So, I really need us to understand that the Common Agricultural Policy is as much a favorable policy towards consumers as it is towards farmers and rural areas. I'd like to pay attention and answer specifically to a number of speakers from the EU candidate countries. Just to note that in the ESC, we have a specific file on encouraging the EU candidate countries to participate from a civil society perspective.
And I have to say that it is extremely successful because I think there are situations where the candidate countries are also coming from areas of pretty low, in some cases, very low expenditure and low indicators, which show that there is massive equality in terms of building their financial ability level with the rest of the European Union. That is a major challenge that we face. And even this morning, talking about candidate countries, I have to say that we have quite a distance to go. So we really need to be careful to make sure the equality principle is actually adhered to. Finally, just to say this, and I go back to the point that was made by a number of speakers, which is that we are in this different and new Europe that we keep talking about, the new geopolitical reality that we are now facing and have to try to, on the one hand, maintain the funding that we have invested over a number of years into the various regions and the various countries.
If we really mean that, then we need to be careful not to weaken it by concentrating on the new reality of the new Europe, particularly defense. We have to be really careful. We do need a strong Europe. Let me reiterate that because we can no longer depend on other places that we thought we could. So we do have to become more resilient, stronger, more independent, more competitive, while at the same time not losing the weaknesses or the values, which are strong in terms of the EU and the reason we exist. So finally, to say, I hope we will certainly work with you in this parliament, the ESC that is.
We will work strongly to ensure that those values are protected, while at the same time strengthening the EU. Without the EU, we would have a fragmented continent, like we had after World War II, which we must never fall back into again. Because if we do, then we have a lot of populations oppressed and governed by people over whom they have no control. Thank you.
Thank you. Miss Tutto, please.
Speaker 41
Yes. Thank you very much, and thank you for all the contributions. Look. The room for maneuver is very small, and the time window is even smaller. If this architecture stays, it means that the cohesion policy is totally dissolving.
It's totally dissolving. It will be partly eaten up by agricultural policy needs, which are justified, and by emergency interactions due to the flexibility part. This is what will happen. It will first be reduced in this budget to the solidarity fund for less developed regions, and it will completely disappear. And it is not coming back.
I have been gathering local politicians and regional representatives. I have all the Polish presidents of regions, all the Spanish presidents of regions, all the Italian presidents of regions, and most of the German leaders together signing a letter for cohesion policy, a standalone cohesion policy that is a European policy that helps the transition of all regions. Look. The only thing is we don't really have time to change the architecture. The only way to change it at this moment is in your hands, in the national parliaments, because it is now up to the member state governments in the European Council.
And the only way you can help them with this decision is because life is complicated and a lot of things are going on: recovery and resiliency, facility negotiations, midterm review, and safe facility allocations. There are a lot of negotiations going on in your governments with the European Commission. You can help your governments, as national parliaments, by partly tying their hands to challenge the architecture and to separate cohesion policy to remain as a standalone policy, so that governance is not nationalized but regional in the future. But it is, in reality, in your hands, and the time window is closing for that. This is what I'm asking for here today.
Speaker 5
Thank you. Thank you all, especially the members of the national parliaments, for joining the discussion that I think was quite fruitful and interesting. Of course, since we're talking about the MFF for 2834, the last word on this MFF—what should be in it and what should not be in it—is, of course, not yet set, and it will take very long further negotiations and discussions. Thank you all. I kindly remind you to join the dinner in the members' salon on the Ground Floor of Spinelli, and of course, also to join the plenary session tomorrow.
Enjoy your evening. Thank you.
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