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BUDG European Parliament
Follow its sittingsSpeaker 2
The core EPG that has high spillover, high scale, and aligned preferences in the sector like the research and innovation and the cross border infrastructure for energy, for example. Category B strategic EPG, high spillover and divergent preferences, like, for instance, the defense. And category C, the national or local public good. So we will use this criteria to assess later on where Europe should address prioritize their fundings.
Pauline Kenney
So then analyzing the Leta and Draghi reports, both published in 2024. Both reports identify substantial investment needs to revitalize the single market and to ensure European competitiveness. So the Draghi report sums up the investment needs to €800,000,000,000 per year between 2025 and 2030 on strategic sectors such as energy transition, digital technology, defense, and innovation and productivity, as we can read in the table on the right. So both reports are composed of recommendations declined into operational measures. Draghi's recommendations declined into 10 strategic sectors and 5 horizontal sectors.
So we classified the letter of recommendation with the same framework to compare them and analyze them. So in the letter reports on the left of the presentation, we can see that horizontal measures represent more than 65% of total measures, as the letter report aims at identifying mainly transversal actions to redefine and modernize the European single markets. On the other hand, on the right of the slide, we can see that in the Draghi reports, there are three key sectors that represent more than half of the total measures. And these sectors are energy, critical raw materials, and digitalization and advanced technologies. So these three sectors fall within the definition of EPG and are a prerequisite for the European competitiveness and sovereignty.
Then we instructed the measures that would have an impact on the MFF if they were applied. So on the left in the Draghi reports, we can read that 23% of the total measures identified would have an impact on the budget if applied. And these measures are mainly represented by horizontal measures. On the right of this slide in the Draghi reports, we can see that 28% of the total measures would have an impact on the budgets if applied, and 40% of them are represented by the three same key sectors, so energy, critical raw materials and digitalization and advanced technologies. So then, taking a step back, this investment need is massive, as described by reading the report.
And so the gap won't be filled by public investment only. And so one of the main instruments to attract private investments to support competitiveness cited is Invest EU, which relies on a budgetary guarantee on four targeted areas, which are sustainable infrastructure, innovation, SMEs and the social sectors. So on the graph on the right of the slide, we can see that from 2021 to 2023, EU guarantee of EUR 14,000,000,000 mobilized a total of 205 million investments.
Speaker 6
I will switch to French just to explain this point. I hope everyone can hear me well. So we're trying to show here, and what we're trying to underscore are two points. First of all, the fact that we're trying to pinpoint the guarantee amount in InvestEU and the provisions there that will help us mobilize appropriations within the MFF. We're looking at how much we can leverage.
Speaker 9
So how much extra investment will come about thanks to one euro public investment, and what the multiplier effect is. So we've got the additional private investment that will be mobilized by the investors. So how much total productive investment CapEx were we going to get, thanks to the multiplier effect? And when you mobilize appropriations, there can be two consequences. First of all, take offshore wind farms, a very mature market, very capital-oriented.
And therefore, the leverage there will be really strong. You've got €1 in public money. You can see what the average is, 15, in the total productive investment. So sometimes the goal isn't the multiplayer effect, but the leverage one. So it's really the impact on private investment, rather than total productive investment.
Speaker 8
I'll give you an example because we heard that there is a whole set of issues. And here it would be the European Social Fund. It's about de-risking. So derisking so that investors can shift towards a secondary market that maybe would have been less dynamic if there hadn't been guarantees, and if you or if we hadn't had this leverage effect in InvestEU. So we'll be talking about this later on, when we look at the different scenarios.
Speaker 7
And it's extremely important when we try and define how we can cover the investment need of €800,000,000,000, that was mentioned. Now this report dates back to 2024. So in fact, we could be talking about more money, maybe even €1,000,000,000,000 per year, what's happening, and the defense needs we have at the moment.
Speaker 2
Okay. Thank you, Lor. So we've seen how I'll switch to English. We've seen how these priorities and investment needs that were identified in both reports, they provide a very solid backdrop against which the European Commission has set up their proposal for the next MFF. And here, we are putting the focus on pillar two on competitiveness, prosperity, and security.
So we have the MFF deliver a major scale-up of a few investments that can boost innovation and also reinforce a European technological leadership. So we have in some a sharp increase in some strategic investment priorities as set up also by the Dragonetta report. The digital investment increased 5fold. The clean technology industrial decarbonization sixfold. And that also confirms a solid shift towards a clean and smart growth.
The European Competitiveness Fund is at the core of the strategy. We have key resources in key areas, such €165,000,000,000 for Horizon Europe, 131,000,000,000 for the resilience, security and defense. And by combining the grants, the equity, the guarantees, DCF aims to reduce the risk and also to accelerate investment in line with the Latam Drego report, and we will see in the scenario how it fits within the ambition of the two reports.
Speaker 8
We concluded that the two reports do not provide quantitative measures. The recommendations, the key actions, the recommendations aren't linked to specific amounts in order to break down the analysis where we would break down by key sector. So it means that we have to come up with scenarios to analyze these. So yes, perfect. Next slide.
Because we're running out of time. There are three scenarios. So we're looking at the EPG financial resources and the leverage effect. I know you can't see this very clearly on the slide, but the whole point boils down to three remarks. We tried to determine the necessary contribution, in other words, how much of the budget had to be mobilized per year on the basis of what we thought was necessary to cover the EPG.
So our three different scenarios here. So a cautious or prudent scenario, 17,000,000,000. So approximately 50% is the provision percentage. That's the goal of the MFF. And two alternative scenarios: an intermediate one with €40,000,000,000, and an optimistic or ambitious scenario with 70,000 billion euros. So we've got the annual contribution on the basis of what we thought was necessary for the ECF and CEF.
So we're looking at the annual amounts to combine a leverage effect and a multiplier effect. So we chose different leverage ratios in the different scenarios to try to find two things. Depending on the total amount of InvestEU and related provisions, we wanted to see how we could bridge the investment gap. So you'll see that when you look at all scenarios together, you got a range of 10 to 30%. 30% was the most ambitious, with the highest leverage effect, the highest Invest EU total amount, and the 40% provision.
So we felt it was important to make this distinction to show that in a so-called intermediate scenario, we cannot get to the 20% that was in the Draghi report because we're actually at 18%. We're just below 20%. And we felt it was important to mention that, and we'd be very happy to talk about it under Q&A.
Speaker 3
With respect to the choreography, we now go to the political groups. We're two minutes each for the speakers of the groups. Unfortunately, I don't see anybody from EPP, so we immediately switched to S and D. And I guess, Monsieur Germain Vapandre Laparro.
Jean-Marc Germain
Mr. Germain, I think it's you for the S and D. I'll be speaking French. First of all, thank you very much for all your work. I'm not sure I understood everything, but I'll be going through the documents in more detail later.
But you talked about the leverage effect. The leverage effect that goes from 1% to 15% to me, it seems extremely high. So at that rate of return, we're wondering why private funds aren't replacing public funds. So everything seems to hinge on that. If I look at the difficulties we have and that I mentioned in the Draghi report and that you mentioned, it's the following.
You just said this. This amount of €800,000,000,000 isn't really backed anywhere. If I remember the explanation, you're comparing investment in the United States of America and in Europe, and you're saying that there is an investment gap, an investment gap of €800,000,000,000 per year. Of course, if you look at the MFF and the 400,000,000,000 divided by seven, that's 60,000,000,000 per year, approximately. So if the leverage effect is 10, then you're basically saying that the MFF corresponds with this investment gap.
So it all is linked to the leverage effect. So my question is, you give us a little bit more detail on the assumptions and the mechanisms that mean that when you have borrowing guarantees and you have 1,000,000 of public investment, then you have an x amount of investment that came about. How can you compare that scenario with a scenario where there wouldn't have been public investment, and it would have been business as usual? So what would be the difference between these two scenarios, with public investment and without? And what would be the real leverage effect of the public money?
And how would you be able to increase that investment of €800,000,000,000 per year? And do you have any economic models in mind that could be used to simulate the €400,000,000,000 with a different effect? And then we have InvestEU, we have provisions, we have a whole arsenal of measures. So how exactly could we look at it from a macroeconomic point of view?
Julien Sanchez
For PFE. Thank.
Thank you very much. Thank you very much for presenting this study. I really want to understand the specifications that were given to you. If I were, I don't want to criticize the study. I want to perhaps criticize the technical specifications that you were given.
You talk about the Draghi report, the letter report, and then the MFF. But it would be interesting to take a critical approach to these reports. First of all, what is your opinion on the Draghi report? What is your opinion on the letter report? Which one do you think is the most relevant if one were to choose between the two?
I'd be interested in knowing your opinion because there's mention of a financial envelope and that's trying to be included, there are attempts to include that under the MFF. Now before we become more ambitious in budgetary terms, let us monitor and control the money that is being spent nowadays in a better way. There are structural flaws and weaknesses when it comes to monitoring, assessing performance. And we haven't sorted out these problems yet. So we're trying to boost expenditure, but we haven't solved the budget management issues.
Now you talked about these limited sectors that account for 50% of actions, and I think this shows that it's not just the level of investment that's important, but what our priorities are or should be. And I'd like to hear what your opinion is on the priorities. The report says that the EU budget falls short of what we need to cover the bridge to the bridge the investment gap. It would only cover 10% to 30%. So we are being more ambitious, but we haven't put our money where our mouth is.
We know full well that the budget isn't financed by just vague and abstract mechanisms. It's the European taxpayer who pays for every decision taken here. We hear a lot being said about own resources, new taxes, new levies. And I think the taxpayer deserves more rigor and transparency. But we also have to make sure that each and every euro is spent properly and usefully.
So thank you very much for the work that you've done in the different areas you were asked to look at. But I would have preferred a report that was a little more critical. It depends on the specifications you were given. You just take you're just taking for granted the fact that these reports are wonderful, but I would have preferred you to be a bit more critical.
Stine Bosse
Thank you very much, and thank you for the report. I have not read it in depth yet, but a couple of comments and perhaps one question. It is very obvious that we do need to spend more money together. We have so many investments ahead of us. Just look at what's going on right now with our energy prices.
And if we really want to make sure that we are supplying ourselves, that needs investments. And look at the defense side. So I'm not questioning at all the need for spending more. What I would like to hear is your opinion on the balance between Draghi and Letter. If we are going to spend more time together, we also have to make sure that we do better together.
And that means probably also stopping things going on at nation levels. I want to quote our Commissioner, Sao Fan. Within the first, I think it was half a year of his mandate, he said, What we can do better and cheaper together, we must. So I would like to hear your reflections on that. Is there any indication in the report where we can actually stop doing things and then do it together and save money on the national levels to actually spend money more cleverly together.
Thank you.
Speaker 17
Yes. Thank you very much. I have one question a bit because we talk about the investment a bit like it's a silo of its own, but it's very much linked as well to legislation and regulation, especially I think about where we talk about the clean transition and under this also the circular economy, where we know there is a real investment need and where especially also, I mean, investment from MSTU and other EU investment can really gear and mobilize the private investment. But how much is that linked also to having the right regulation? Because one thing is having the money without regulation, as well as setting the course and the direction for the industries.
Stine Bosse
I mean, how much is it worth then? And that would be a bit my question about your presentation. Thank you.
Speaker 3
Thank you. Any other MEP present in the room wanting to take the floor? If not, I may add to the comments already made one item. Unless I'm wrong, there is no mention in your report of the role that EIB, the European Investment Bank, could play in the whole process. And linking to the remarks of Monsieur Germain concerning the leverage ratio, I think the EIB, which is one of the biggest banks in the world, by the way, could play a very interesting role, not only in financial terms, but also in terms of adding know-how to the whole process of investment, judging investment projects and the like.
So please comment a bit on whether you see a role for the EIB and what that could eventually mean for the 14 leverage factor, also seems quite high to me. But if you factor in EIB, that might become a little bit more, how should I say, achievable. So please, can I give you ten minutes instead of five to react to the different questions and comments. Please.
Speaker 8
Thank you very much for your questions and comments. I will link what you said to what Mr. Germain said about the leverage effect. Now just to clarify what was on the screen, but you couldn't really read it. Now this leverage ratio between 10-14% that we applied, we only applied it to the Invest EU setup on the basis of the principle that with this guarantee and on the basis of past experience, we could then that could lead to a multiplier effect.
Now the EPG part of the budget, we used a lower ratio because we know that when you have grants and purchases that protect the company's top lines, then you're not going to have such a strong leverage effect. So in the scenarios, we're talking about 1.5 and 3.5 just to make sure that when there is a grant, you have an extra effect there. There's a kind of reinsurance, which means that the whole process backs the companies. There's de-risking, if you understand what I mean. So that's the approach taken.
So you have a higher leverage effect only on InvestEU, but not on the total amount. Now and to pick up on what you said and the €800,000,000,000, and in order to tie this to what Mr. Sanchez said we didn't take a critical approach to the report. But it maybe falls short of what we need, and the whole issue of space and defense. And if you want to compare with The United States, there are more than 10 companies that had more than €1,000,000,000 in debt and others €15,000,000,000. So in The United States, there's another approach.
And it makes us think that we need to increase the amount of money invested here. Now on the role of the EIB, the EIB already actually runs these mechanisms. So the whole issue of provisioning is here. So if the provisioning rate goes up in Invest EU, then you could go for more risky projects. And when I talk about more risky projects, I'm talking about projects on less mature markets where we have no track record, where there could be a risk of the company closing.
So in this kind of scenario, you could take that approach. But this could be a role to take to try and increase the de-risking through the EIB. So this is being done. But if you're provisioning, maybe your provisioning rate could be a little bit higher. And then the whole issue of engineering that was mentioned and the structure of funding to try and get additional private investment with this whole engineering business model.
And that would reduce the financing rate. We talked a lot about the leverage effect and leverage ratios. But at the end of the day, it is about how much money costs when you borrow it as a private person. And it's about bringing down those costs. So both in the public and private sector, when we talk about infrastructure projects, when the EIB steps in, the way the financing plan is structured, then the financing capacity goes up because you have more public and private investors, institutional or not.
And generally speaking, the borrowing rate goes down two fifty basis points, is what it says in the Draghi report. So, therefore, the cost of borrowing goes down. We think that this rate is quite high because the overall project cost isn't really that. At least that's how we see it. But the ratio between the debt that you leverage and your equity that you have to put in a project is linked to the risk rate. When you have institutional players that act as guarantors, then you'll need less own resources.
You'll need less equity. So how can we tie up everything that was mentioned? The basic principle is that if you focus on where the biggest spillover effect is going to be, and if you also focus on cross-border projects, I'm thinking about transport, mobility projects, where it's going to be very difficult to tap into national capital because cross-border projects are the EIB projects par excellence. I think that's the perfect one to target. I don't know if you wanted to talk about the dragging letter report.
Speaker 2
Regarding the EPG that was mentioned, where should you focus its intervention? That's why we built our framework using different criteria. And the main category, we have the core EPG and the strategic one. So we know that for cross-border, is it essential? But also, the strategic ones like defense and security are also important.
They have an intermediate high multiplier, but they are strategic for Europe. So that's why we use a definition during our study to address European public good debt. And maybe to answer also to your question regarding, so the TMFF is strategic, but it's not sufficient. So we need to combine different items. So we need to select, to have a strategic allocation, to mobilize also grant and private funding, but also to use the complementary with national investment strategies and reform.
And as highlighted by Leta, mostly, but also by Draghi, the need to complete the market union, the Capital Market Union, and also to achieve the saving and investment union. So to further capitalize on the to redirect private funding into long lasting investment that are aligned with the common EU policies.
And.
Speaker 8
Just to wrap up. Now we have this €800,000,000,000. And to cover that, the idea was that the figure is in the Draghi report. It isn't really broken down in detail, but it's mentioned. But the report's idea was to say that 20% was going to be covered by the public sector, and the rest, private sector.
So if you use blended instruments at your disposal, and this ties into the study and how we could go into more detail on this. So the reasoning behind this is how we can harness the 20%. And if we have the ambitious scenario, and I agree that the leverage ratios were very high in some of the scenarios. The ECA actually challenged some of them. So how do you deal with the 30%?
So you've got 20% of public money. That's the target. How could we go beyond that? How could we increase that? The alternative fuel is a blended instrument. And that, as I said, is a blended instrument that brings together lots of different types of funding.
Jean-Marc Germain
You didn't really answer my question on the leverage effect, or at least I didn't, or maybe I didn't understand your answer. So if we believe in this 800,000,000,000, and the only thing that backs this figure is the comparison between the EU and the U. S. And that we have this €800,000,000,000 investment gap. But as you said, there hasn't been any sectoral study to back that.
But if we take this amount, if we take this goal, then the leverage effect is key. It's not about how much European money will leverage private money. It's by how much the public money is going to increase the total investment in the EU? And if we want an answer to that, we need to compare a situation where you have public money and one where we don't. So if you've got €1 of public money, especially through InvestEU, how much money are we going to get from the private sector?
But you cannot prove exactly what triggered that. So for me, this is the key issue. If we don't answer this question, for as long as we don't delve into this kind of analysis, then I'm not sure how we're going to really answer the question at hand. The second point I want to make is if we say the Draghi report says that we need 20% public money, 20% of €800,000,000,000. Then we're talking about 1,000 billion euros in public money, and the commission is only putting forward 500,000,000,000. So I would say that half the problem of not covering that 20% is actually covered by the budget. So could we not take this approach?
Speaker 3
Any other MEP before I go back to the authors of the research? So, no other questions. I go back to our guests to respond to the remarks made by Monsieur Germain, please.
Speaker 8
Yes. I think that if we take this approach from the top down way, then how do we get up to this figure? We took an approach that seeks to be based on the project logic as we try to say that sector by sector, the lever effect will be different. But we are all looking for this objective you mentioned, to mobilize public money where it's needed to support innovation or the development of our sovereignty. I'll give you an example on the RRF to do with the AI mega factory.
Is there really a gap in private investment for this project? We see that there are just private projects with no public support emerging, which are developing, and which are profitable. So the issue is that if we have to mobilize 20,000,000,000 to set up various jig effect the various factories like this in Europe, and at the same time support the emergence of alternative champions in Europe, and to achieve our sovereignty eventually. The issue, though, is about whether when we say, if we only invest public money where there's a private investment gap. In terms of public initiatives and sovereignty in these examples I've mentioned, it's necessary to have public money to enable champions to emerge.
Otherwise, they wouldn't develop or give them the opportunity to present another alternative. So the approach has been to use this leverage effect on windows like the transition defense and so on. But we also have to say that a part of the budget will have a weaker leverage effect. So we won't have this top down approach you mentioned, but it is necessary to support this innovation and to support as well the emergence of alternatives, which are necessary for competitiveness. I'm not sure if I have entirely answered your question there.
Speaker 3
This is or this will be an ongoing discussion, I think, which shows the importance of the subject. If no further comments are to be made, then I thank very much the three authors of this interesting study for being here and for presenting them, and for replying to the remarks made by the MEPs. Thank you very much. We can continue with point number 4 of our agenda on the European Competitiveness Fund. And this is, of course, an item closely linked to the previous discussion.
And with this, we are resuming the consideration of our budgetary assessments related to the MFF package. Since we have many such funds to consider, I will be strict on speaking time. And when we get to vote on this budgetary assessment in a few weeks' time, I will also be strict on the admissibility of amendments in order to make sure that the Budget Committee stays within its remit, which then, of course, also means that the other committee should respect the tariff of the budget committee, which is limited. Ms. Tina Bosser, the floor is yours for three minutes to present.
Thank you
Stine Bosse
budgetary so much. Chairman. Dear colleagues, as we just talked about, we live in increasingly uncertain times. Rising geopolitical tensions, as well as trade and energy disruptions, put pressure on our independence, our competitiveness, and our security. In this regard, the European Competitiveness Fund is an important step forward.
It reflects a clear ambition to strengthen Europe's strategic autonomy, resilience, and leadership in key sectors while advancing the clean and digital transitions. Compared to the current multilateral financial framework, the increase in strategic investments is welcome. However, we must also be clear about shortcomings. The proposal consolidates existing programs, which risks reducing transparency and accountability and limits parliament's ability to ensure funding for specific policy objectives. Flexibility matters, but so does democratic oversight.
Moving on. To unlock the scale of investment needed in Europe, we must make greater use of risk-sharing instruments that can mobilize private capital and maximize the impact of the EU budget. In this context, InvestEU has proven its value. With a multiplier of up to 14, and this is not Mickey Mouse money, it's actually proven that this has happened. It is one of our most effective tools to leverage limited public resources.
Yet the commission proposed a very low budget for Invest EU. We therefore call for a strengthened ECF investment instrument, including on the minimum and maximum budget, and for the InvestEU to be given priority in implementation. We aim to ensure continuity and the implementation by allowing the commission to rely on existing or adapted agreements with implementing partners. At the same time, strong financial instruments must go hand in hand with strong governance. Here, there is room for improvement.
Strengthened governance will be essential for credible budgetary decision-making and effective parliamentary oversight. We therefore propose more detailed rules on transparency, impartiality, selection based on experience and market experience, and on the absence of conflicts in the interest of investment committee in line with the Invest EU regulation. Regarding implementing partners, we support a focused expansion of the open architecture. At the same time, we reintroduced a dedicated share of the EU guarantee for the EIB Group. Given its treaty-based mandate, experience and horizontal approach, it is particularly well placed to deliver under the ECF InvestEU. We propose a share of 70%, which is lower than the current InvestEU regulation, and thus ensures greater space for other implementing partners.
To enhance efficiency and impact, we emphasize the need for multi-annual work programs and stronger investment guidelines for the ECF InvestEU instrument. We also propose these guidelines to be adopted by delegated acts to safeguard parliamentary oversight. Finally, we must deliver impact where it matters. The ECF must remain guided by the principle of excellence while recognizing the importance of geopolitical balance where appropriate. Thank you, and I look forward to hearing your comments and to good cooperation.
Speaker 3
Thank you very much. We go to the shadow reporters now for one minute each. Monsieur Shahim.
Speaker 21
If I may, can I make like, there's a point of order that I fully don't understand when it comes to the competences between ITRA and Baj? I mean, clearly that you state that some of the amendments where you can see as admissible and not admissible. I have to say, we have now the situation in the parliament that a text can be voted in favor in ITRE and voted against in Bajj, and we're talking about the legislative text. There will be a total mess in the plenary. I also don't understand why nor the CCC nor the COP took a decision about which committees lead on which competence.
Speaker 20
I think the way that we are working is becoming more and more complicated and does not clear the clarity between the committees when it comes to working on this legislative file. And I really think we should change this, hopefully, during the midterm because I think it makes our work really unworkable. Situations for me is unclear, and it creates a lot of unnecessary tensions also between the committees. I had to make this point, Chad. Apologies.
But, yeah, it's becoming a bit of a mess, in my opinion.
Speaker 3
If I may respond very quickly and briefly, my mic is on. Yes. Somebody is indicating that my mic is not on, but I think it's on. Clearly, there is a gray zone, but I think you exaggerate. Because in this case, Itre is in the lead.
There were budget amendments that were taken on board by Itre and the train rolls. So you have a point. There is a lack of clarity, but we should not start exaggerating that everything is a mess, and that everything is in the gray zone. So please, let's be reasonable. And I fully agree with you that we need to bring more clarity to the way in which this process needs to be handled.
Speaker 20
Thank you, Chad. Of course, not everything, and sometimes you need to exaggerate to make your point clear. Thank you very much.
So now you have one minute.
Okay. Thank.
Speaker 20
you. First of all, thank you to the rapporteur for the presentation of the draft report. I think I look forward to our good cooperation and negotiations on the file. I think your add-ons on transparency are very important also for the budgetary spending. For S and D, there are two really important highlights.
One, there are some concerns on the tax proposals regarding the inclusion of commercial banks as impaired lending partners. For us, we don't see a real added value in this, and therefore, there's no need to give these commercial banks the status of implementation partners. Preserving the current framework is essential to ensure a level playing field, also because we believe with this, differences will occur between member states. Secondly, I think it's very important that we have a good Invest AU instrument that contributes to social action. And this case, which is also the case in the current mandate.
And finally, which is connected to the first point, I believe that we as Budge should underline the importance of a strong partnership with AIB. We should never change a winning team. Our cooperation with AIB is working very well, and it's something to be cherished. Thank you, very well. Looking forward to our cooperation.
Thank.
Speaker 23
you. I'll speak Czech. The European competitiveness fund will be one of the main funds within the MFF. So it has to have clear results for production and employment in Europe. We have to assess to what point this will contribute to growth, and how it will strengthen our competitiveness.
This fund has to put the focus on the least favored regions. If we look at the ex ante criteria, we have to look at those which have administrative capacity, particularly the biggest companies and those with experience of the different key programmes. We have to consider the geographical balance as well. Unfortunately, the speaker is going too fast. We have to take into account new technologies and pay attention to SMEs as well.
The smallest and most innovative companies are often those that could work more efficiently in different sectors. We have to consider as well access to funding. And in this sense, oversight, parliamentary scrutiny will be very important. Thank you.
Speaker 17
Thank you, Chair, and thank you to the rapporteur. I mean, we have, of course, a few priorities on our side. First of all, we need the competitive fund to have clear, measurable objectives tied to EU priorities. Just a vague competitiveness priority, we don't see it will survive scrutiny, nor deliver actual impact. So aligned with EU policies, EU strategies, the Green Deal, of course.
We need a good and strong conditionality taxonomy aligned. That's also why it's very much linked to the performance regulation, to have a good and strong performance regulation to regulate the competitiveness fund. And then we see a real need for more granular non-closure in the fund. So we have the details in to be able to follow from a budgetary perspective. And then I can totally align with the need for stronger invest in EU.
And there, we have various points as well that will be put forward. Thank you.
Speaker 3
Thank you. We also have the Itrecora Porter, Mr. Nika here. I don't know whether he wants to enter. Yeah.
Dan Nica
Thank you so much, Chair. Thank you so much for inviting me and accepting to be here today with you. I had yesterday a conversation with Jorah Portor, with missus Bosse, and the team also from the budget secretariat. With me, it was the president also, mister Reller, who just came here, and we try to sort out a little bit the way how we are going to move on. And I think just referring to the mister Haim's remarks that it's very unclear.
Just not make it complicated, they refer to other issues like if we agree with Baj, what will happen if another reopening committee is going to challenge us? I will challenge not only Baj and Eitre, to challenge our agreement. So the rules or procedures, they are very unclear and very disturbing. So what we did, we try to present a very clear, let's say, way of working moving forward because the deadline is Monday. And we expect to have anywhere between 10 and 12 thousand amendments.
And we have to know who is going to be responsible for the amendments, because the amendments refer to an article or a paragraph. And we have to everybody, they have to take care of their own amendments. So the competencies of badge that you have to be responsible as rapporteur from badge committee, and we have to do the same on our side. And I think we'll be able to sort it out rather sooner. I'm not in the favor of giving or stepping into that what you mentioned at the beginning, the prerogative of the chair, to declare inadmissibility.
Because if you declare inadmissible something coming from Eritrea, will not, I hope, will not be the case, then what will happen if the chair of Eritrea will declare inadmissible amendment of Basel? We will it will be a mess. So that's why we prefer to settle everything in a very, let's say, good manner of working together because it's a common interest. That's my interest. That's the interest of business bosses.
I think it's the interest of all the batch members, Eritrea members, to have a coherent position of the European Parliament because it will be difficult negotiations. You'll be there, most probably as a chair. And if you are not united and we don't have a strong and unified position, it will be difficult to negotiate with the council. In the last sentence about the ACF, everybody is looking like a fountain of miracles. There's the miracles, they are not in the ECF.
There is very little money, and we have to deal with the mess created by the commission putting everything in one basket. So everything which was referring to 15 different projects, now we have to deal with them in the ECF. So there is not money there. We should expect that the people there will be unhappy because there are many opinion-giving committees asking for money. And the money, they are 260 whatever.
Half of them go to the defense space and the national security, and for the industry competitivity, and all the other important issues is around roughly €100,000,000,000. Not enough. It is a joke for the next seven years, but we have to deal with what we have on the table, and that's the existing situation. And thank you so much for being so kind in letting me speak a little bit, Mr. Chair. Thank you.
Speaker 25
I mean, Dan's almost said it all. I just would like to get us to the reality. In real terms, of the €235,000,000,000, the 125,000,000 for defense and space are gone. So either we would decide that we don't want to have a defense program or a space program anymore of that size in that geopolitical situation. And we should be also aware that the commission and the council are already agreeing that there will be no movement or 100% flexibility on that, then we should be aware that we have, we talk about EUR 110,000,000,000, more or less, for three windows.
So the dilemma we are in is that, on the one hand, I think we agreed that we want to have a competitiveness program. But then first of all, we should define what competitiveness is, because so far we have a name, but then what is in is not necessarily related to competitiveness. But we should also be aware that there are many committees who realized that their programs of the last term had been squeezed together in a program which is called competitiveness, but where there are big expectations that we cover health, housing, tourism, a lot of other issues, which you, at best, indirectly, you can connect to competitiveness. So the exercise will be, to be honest, and then we have the white elephant in the room, and that's widening because I really want to address the issues. So in a way, we have to find a balance that this is a program which is really serving competitiveness, and this might be in the areas of digital, in the areas of energy.
On the other hand, we should be realistic that health and other priorities, which had a program before, are no longer existing, and that housing is an issue. So we have to find the right balance in order to serve, let's say, the interests of the majority of the groups. But by not watering down completely the idea that that should be a dedicated competitiveness program. And so, from my point of view, that is the big challenge. And if I may say, also related to the 11 opinion-giving committees, when agriculture is asking us for CHF 30,000,000,000, environment for CHF 20,000,000,000, health for CHF 20,000,000,000, and I can go on with the list.
So if all the financial proposals from the opinion committee were then realized in the program, there is no competitiveness left or money for energy or digital, which are the big challenges of our time. So in a way, I really would like to ask us to overcome, and I think then we are willing not to get in this kind of territorial turfights between Budge, us and other committees. Let's be clear, for example, the Invest EU that the Econ Committee obviously plays a role in. Obviously, we have to deal with issues which are related to health. But on the other hand, we have to be aware that if we reduce ourselves to the territorial rights or the rules or whatever, that it won't lead us to a solid proposal, which gives us a strong position to negotiate with the council.
Because what the council is looking at is to cut that. Let's be honest. They won't cut in the NLPPs anymore, because it's their money. The gap, I don't think so. So that leaves then global something, so the big global thing.
Interestingly, in that geopolitical situation where there will be the big cuts, so that leaves more or less the CHF 500,000,000,000 on CEF, ECF, and Horizon. So we should be aware whatever kind of dreams we would like to fulfill, whatever kind of territorial rights we define by the rules, be it 58, be it the prerogatives of the committee. If we get in that disaster, we will weaken our position dramatically. And so I had a conversation also with the chair of the ITRI Committee. We don't want to threaten each other by inadmissibilities and things like that.
We simply have to get our things together, and that will be a delicate balance. And if we end up in turfights, territorial turfights by committees, we will just add to the disaster, which is complex enough. Thank you.
Jean-Marc Germain
I may, Chair, comment on the problem of how the committee should work together as an S and D coordinator in Budge and also as a former reporter of the ADIP, which was the first text we will have to handle with different committees and different responsibilities. And of course, according to Article 58, Birch was entitled to find the size of the envelope for the ADIP program, which may be relevant because we have an MFF and we have to check if the envelopes can fit in the MFF and what are the consequences for the other programs. But of course, the size of ADIP is also the ambition for European defense. And I try to work with two co-reporters, Rafael Gluckstein and Francois Xavier Bellamy, to, of course, respect what they are saying. But when it was to have the dialogues and dialogues with and then the negotiation with the council, also, I tried in the code of conduct to have my say when it was to say how we're going to finance the envelope and which program until it would be reduced.
So in the end, for ADIP, it was smooth because we agreed on the size. As far as the MFF is concerned, we have an issue because now the figures, the overall envelope, are fixed in the interim. So for Budge, there is not much room of maneuver on the overall figures. And then the repartition bit of this February or four, I don't remember exactly, is up to Itray Committee to decide within. There is a specific issue about invest in you.
It's true because the invest creates liabilities, and liabilities is something that's budgeted to check at least if it fills in the overall envelope of 0.3% of G and A, to making sure that when Europe issues Eurobonds, people that take Eurobonds are sure that they will be reimbursed once upon a time. So I think in that case, the budget has some things to say, but it's the same as ADIP. We have to find an agreement on the side of Invest EU, and then to finish. And sorry for taking the time to comment. But as far as S and D are concerned, of course, we will support the idea.
And after the hearing on competitiveness and the fact that Invesque U is the biggest European tool to have a levy consistent with the ambition of tackling competitiveness, defense, space, digital and also housing, then we will defend a big envelope for Invesio as a Sandi. And I'm sure that when we discuss the draft report of my colleague, we will find an agreement together with you in a smart discussion. Okay.
Stine Bosse
Thank you so much. And be assured that we have done what we could up to this stage to stay within our remits of both Paragraph 58 and the guidance laid out by the chairs. And we will, of course, continue to do so. And yes, we had a very constructive discussion yesterday with Eela and Nika, and I think we will continue that, and we will find a way. I do appreciate, I think everybody appreciates the fact that the task for the ITRA committee is huge.
I mean, the asks are enormous, and the funds are indeed not where we would love them to be. And that will, of course, at the end of the day, be a challenge. I don't see that as really interfering with the discussion of how to deal with our decision making. I just think it definitely adds to the complexity for Itra. But for us, I think it should be doable.
I appreciate all the contributions. I think they also signal where we should be able to together find landing pages. I also really appreciate the clear voices from you, Ella, on this. It is going to be difficult, and we will all have to bend towards each other. And I think that is exactly what we are going to do. But all the contributions from everybody in the room here are well taken, and I look forward to working together with you.
Thank you.
Speaker 3
Maybe I should pass the floor now briefly to the representative of the commission, Madame Van Durendonk, who is Head of Unit Budget B2, competitiveness, financial instruments and STEP. Please.
Speaker 26
Thank you, Chair, Missus Rapporteur, honorable members. Thank you very much for this opportunity. I'll be rather short. First, on the budget side, the commission has really proposed an ambitious size for the competitiveness fund, with a massive increase in the funding for all sectors: digital, clean transition, biotech, and also space and defense. So I want to start with that.
I think it's a big signal, massive increase from earlier funding that we really strive to defend. Second, on flexibility. Having more flexibility than today for our seven year budget is a key feature across the next MFF in the commission proposal. So here, additional earmarking, ring-fenced, reflow, surpluses would reduce the ability to react to emerging priorities, opportunities, and deploy the budget where it can have the biggest impact for EU added value. So nomenclature that will be used for the future in FNS is not yet concluded.
So I really insist on that point in the nomenclature. Second point on the governance. Flexibility comes with a stronger governance framework. So here, I want to insist on the role of budgetary authorities in setting priorities and in making sure our funding matches with our priorities. Second point that the, today, the funds are highly fragmented, so the intention is to have a simpler setup, a simpler architecture with the same rules for our applicants and beneficiaries.
We will focus on excellence. So the best project in the EU, with also flanking measures to help all territories to contribute to the European competitiveness. Third, on specifically budgetary guarantees financial instruments, we propose that they play a larger role in the next MFF, so as to use the EU budget as a catalyst for more and to unlock the much needed private investments in the face of the massive investment need we have. So this comes with our proposal for higher risk taking through increased provisioning, highest and ever maximum guarantee amount of 70,000,000,000, and predictability for our implementing partners with an initial large envelope of 10,000,000,000 allocated to budgetary guarantee and financial instruments. I want to insist also on the open architecture.
We consider it important for the EU to get better value for money and complementary capabilities across our implementing partners. We look forward to working with the implementing partners. I also want to flag that, we are well aware that implementation has to be anticipated so as to avoid cliff edge effects and to be ready to launch on time as early as possible. Thank you very much.
Speaker 3
Okay. This is, of course, a discussion that will be ongoing, and where we have to settle, preferably at short notice, some of these issues that have been raised. I think everybody's got the opportunity to put this case on the table. We are unfortunately time-limited also in this budget committee. So I thank both ITRE rapporteurs for being here and for bringing their point to the table, and of course also the representative of the commission.
Thank you all. And we go to point number five of our agenda, establishing the justice program for the period 28-34. And we have our rapporteur, Ms. Holmeier. So will keep on going that and tell you that I will give the floor to Ms.
Holmeier for three minutes, and she has found the draft of her speaking points. Please, Monica, go ahead.
Monika Hohlmeier
So thank you very much. Some quiet, please? Dear colleagues, so as you know, the justice program is one of the important programs to preserve our European values and to defend the rule of law and certain justice standards. The justice program is a key instrument for fostering the rule of law, judicial cooperation, and access to justice. In order to uphold the values enshrined in the treaties, it is vital to support and connect our judiciary staff and advance with full respect to member states' competencies, a coherent and functioning judiciary within the European Union.
The commission proposes 798000000. Consider this insufficient and propose an increase of EUR 92,000,000 to a total of EUR 890,000,000 as adopted in the MFF interim report. Unfortunately, the proposal foresees only one operational budget line. I think this is our general problem in several areas, despite three distinct specific objectives. The lack of a detailed indicative budgetary nomenclature hampers parliamentary steering and oversight.
This overly aggregated structure gives commission excessive discretion over spending priorities, which bypasses the budgetary authority of the parliament. We call for the establishment of indicative sub-envelopes per specific objective in the basic act so that each objective must be reflected in a dedicated budget line. A mere steering mechanism is no substitute for the treaty-based prerogatives of the budgetary authority. Then the link to the performance regulation. The proposed performance regulation establishes a single streamlined list of indicators and monitoring provisions, some directly relevant to the justice programs, others not.
Horizontal principles should be applied where feasible and appropriate, taking into account sector-specific rules as laid down in the financial regulation. Everything else is over-bureaucratization. I stress that any additional legislation will only lead to more administrative burdens. Lastly, we deploy the lack of impact indicators in the current proposal, that this is nearly in every program like this. I am worried that measuring outputs and results, sometimes just outputs, will complicate subsequent evaluations.
Also, it hinders the ability to adopt corrective measures during implementation because we cannot measure performance properly. The conclusion is, finally, I would like to thank Hugo and Angelika from the Secretariat for their excellent work, as well as our old advisers and colleagues explicitly here for EPP, Horia, and all shadow rapporteurs already being in contact with me and the rapporteur from the dedicated committee. So thanks a lot for this good cooperation. I'm looking forward to your amendments. The deadline is Monday on the 11th May at five p.
Speaker 3
Thank you, Monica. We go to the shadows. I hear that Mr. Nemec is on his way. So we start first with Madame Furet, PAV.
Céline Furet
Chair, colleagues, the commission wants EUR 800,000,000. That's the number of the day, and that's in order to establish effective, inclusive, resilient, and digital justice. This is terrible jargon, but the reality is much less poetic. We have a lack of transparency. We have no details.
Laurence Muller-Bronn
We have a single budgetary line. It's a black box. You want the parliament to give you the keys to the safe without any oversight. It's unacceptable. Then what is all this for?
To give subsidies to militant NGOs under the guise of inclusion. Then you will inculcate our judges with the European dogma. In France, the judiciary is held accountable to the people, not to Brussels fads. Then you're going to use our money to fund the courts in Eastern countries. Our own public services are collapsing, but you're going to boost the resilience of others so that you can prepare for further enlargement.
Speaker 30
We will not fund a machine that crushes our own national competencies. Thank you.
Mitch, welcome.
Matjaž Nemec
Please, thank you, go Mr. Chair. It's always a pleasure to be here. I just wanted to thank Monica for the draft report. On behalf of our group, S and D, I wanted to stress and welcome the increased budget for the justice program.
At the same time, we welcome a broadening of the scope of justice professionals as well as increased rule of law, conditionality, protection. We warned that the program should be closely linked to Agora to bridge the gap between legal rights and the citizen engagement. And of course, we look forward to the work on this dossier, and will be able to make amendments to improve it further. Thank you so much, Chair.
Moritz Körner
Thank you very much to the operator for the report. We think it's already a very good report that we generally support. I want to say a word on one of the previous speakers. The justice program is not there to fund Eastern Courts but to fund common justice cooperation in the European Union. And that is good for all European citizens because we need also justice cooperation beyond borders.
Justice has to work effectively together. Criminals already work effectively together. So our justice also has to work together. And who wants to divide Europe by saying something like this is not in favor of strong justice, and strong justice for every citizen. So I want to say this very clearly here.
What the rapporteur also said, we also support, especially on bureaucracy, we should make sure that we don't put up too much additional red tape because we want the money to really help strengthen Justice Corporation in Europe. And also on the performance measures, we support the rapporteur. So generally, we are looking forward to good cooperation on the Justice program.
Speaker 17
Thank you very much, and thank you to the rapporteur. I will just make two points that the rapporteur also did, which I think is very important. And that is, first and foremost, that we need a really better breakdown of spending within the program, and that would be useful. So great support for this. And then also want to stress the scrutiny of the European Parliament should increase as well, like we are demanding across a lot of programs, but that would be the two most important points from our side.
I know our shadow is already in contact with you. And then I also just want to apologize for Tina Kistrucht, Rapporteur, and Juri. I will report back to her what is being said here, just as she is one of my group colleagues. Thank you.
Speaker 3
Thank you. The floor is now for the Liebe Korapporteur, Mr. Jaroslav Zosch for two minutes, please.
Jaroslav Bžoch
Thank you, chair. Dear colleague, first of all, thank you for inviting me to present the draft report that we tabled together with Juric Corporate, Madame Strict. Apologies, she cannot be here today. On behalf of both of us, I will present you now briefly the main elements of our joint report on the justice program. To sum it up, compared to the current justice program, the regulation establishing the justice program for the period of 2028 to 2034, as presented by the commission, weakened the role of the European Parliament and member states, and, on the contrary, significantly expanded the competencies of the commission in deciding which actions will be funded under the new program.
Therefore, I'm very glad that we have found common ground with Yuri Kuraputa on this issue. And in our joint report, we reinstated provisions that restored the role of the European Parliament and strengthened its competencies in monitoring, reporting, and evaluating the programme. Another important point is that we added article seven a on types of action back to the operative part, as it was in the current justice program. This provision provides for a demonstrative list of actions that can be financed from the program, thus limiting the commission from making discretionary decisions regarding funding. To conclude, I find the presented joint report a very good starting point for the future discussions between the shareholders, as the main elements are already covered in it.
The deadline for timely amendments is May 18, so I believe we will manage to find the compromise smoothly. Thank you.
Speaker 3
Thank you very much. Any other MEP wanting to intervene at this stage? If not, I pass the floor to the commission representative, Miss Van Dirndong. Please.
Speaker 26
Thank you, mister chair, missus Rapporteur, honorable members. So I think the commission proposed an ambitious financial envelope for the implementation of the program. Those are essential objectives: judicial cooperation in civil and criminal matters, promotion of rule of law, support for judicial training, nondiscriminatory access to justice for all, digitalization of justice to the benefit of all European citizens. On nomenclature, adding that the nomenclature is not yet fixed. So the discussion will continue on that with the parliament as a budgetary authority. The increased flexibility is also reflected in the increased role of the budgetary authority and of the steering mechanism intending to match funding with the objective with policy objective.
And finally, on indicators, the intention of the performance regulation across the MFF with appropriate annexes and more specific indicators by policy is really to be able to track in a transparent manner the use of the EU budget and to provide accountability tools for it as well as to foster the impact on the EU budget in delivering in European objective for justice. Thank you.
Monika Hohlmeier
Short, very brief conclusion. First, very clearly, this program is not supporting any kind of justice court in member states, whichever. They are paid by France, by Spain, by Germany, by whichever member state, and is not paid by the European Union. This is just disinformation, to be frank. Secondly, this program is financing the cooperation between member states against organized crime, against brutal murders, against terrorists, and a lot of other things, cross-border issues.
So I would think that we try to go to the facts, and not to some kind of rumors or political ideologies. This would be helpful in the MFF, and then we can have different opinions about certain smaller issues in these programs, but not about the real cooperation inside the European Union in very necessary areas, because cross-border crime is not stopping at the French border and not at the German border. It's going cross-border. This is why I think we should talk about the different lines and have really indicative budgets for every part of this justice program. I think this big majority is supporting this approach and to have really the possibility to trace back and not only to have the kind of indicators the commission foresees, but more really to have the impact of the program, that we can discuss this to have a good program at the end with a real European added value.
So thanks a lot, dear colleagues. I'm looking forward to discussing the budgetary assessment. Thank you.
Speaker 3
Thank you. Thank you all. Like announced at the beginning of this meeting, points number six and seven are postponed. And we immediately go to point number 18 on establishing the union support for asylum, migration, and integration. The rapporteur, Mr.
Nemec is here, still here.
Matjaž Nemec
Will enlighten us on this item. Thank you, Chair. Today, I present my draft budgetary assessment for the successor to the Acilium migration integration fund for the post-2027 period. As we transition into the next multi-annual financial framework, we are not merely discussing budget lines and numbers. We are defending the European Union's capacity to uphold its values in an increasingly unstable world.
In order to support tourism, business, and our economies to profit from the academic exchange, as well as help manage migration and integration. We need sufficient resources, at union level and well-functioning funds to finance it. With 59 active conflicts worldwide, the highest since World War Two, immigration is no longer a seasonal crisis, but a structural reality from the instrumentalization of migrants at our eastern borders to the humanitarian imperatives in the Mediterranean. The ongoing integration needs of millions of Ukrainians, the pressure in our system is relentless. If we fail to resource our immigration policy at equity, we are not just failing the member states.
We are failing the vulnerable individuals seeking protection, and the European citizens who expect orderly and humane management of our borders. At this point, however, the commission proposal does not follow up to the promises made in the parliament. While in the new MFF, the borders fund saw an increase of 250% and the funds for international security even 350%. The new fund for migration and integration for post-2028 period appears to be an increase of 10% in current prices compared to 2021 period. But sadly, we must call it what it is.
In reality, it is a decrease of approximately EUR 400000000 in constant prices. And that, I believe, is the wrong message we are sending. While the S and D group, we would have preferred a bigger budget for the migration support, I welcome the adopt of the MFF midterm report of the last week with a proposed 10% increase across all programs. When it comes to the concrete proposal and my budgetary assessment, I express a certain level of criticism, the way the fund has been structured and priority is set. For example, the absence of dedicated budget lines.
Furthermore, increased flexibility also raises certain concerns. In order to respond to unforeseen crises, high flexibility could lead to the deprioritization of long-term integration in favor of short-term security and border enforcement. Integration is the silent pillar of immigration policy, and it should never be underestimated and underfunded. Without it, we create the social fraction that fits especially populism. In this draft assessment, I'm therefore proposing several safeguards.
We therefore need an indicative minimum allocation for resilient integration to ensure that these objectives are not sidelined. We also call for increased spending transparency during the whole cycle. Therefore, there are more, we must also expand direct funding for local and regional authorities. There are, please conclude, because they are on the front lines running relation. For the conclusion, colleagues, the 2028-2035 MFF must be a budget of resilience, but also must watch at values.
Thank you, chair.
Speaker 3
Thank you. We go to the shadows. Mr. Afias is on his way. So I first give the floor to Mr.
Sanchez, please.
Julien Sanchez
Thank you, Chair, colleagues. I thank the rapporteur for his work on this file. But this group, our group, is against this both in terms of content and terms of the budget. This is support for asylum, migration and integration, some €12,000,000,000 from 2028 to 2034, an increase in comparison to the previous period. Our public finances are under pressure, so it's difficult to justify such an increase, particularly as it's the European taxpayers who will be footing the bill.
For years, European migration policies have led to growing tensions in our societies. There's pressure on public services, difficulties with integration, lack of safety in many places, and our way of life has changed. But what is put forward here is to increase money for integration, asylum, and migration. We think we should instead spend this money on EU priorities, which are currently being neglected, such as strengthening our external borders, including with physical infrastructure, support for SMEs, farming, research and investment, research and innovation. Excuse me.
Our group is clear. We need to clamp down on migrant flows, and we shouldn't just spend more money without tangible outcomes. We want Europe to be European. That's why we will be tabling amendments, and we will not support this current proposal. Thank you.
Speaker 39
Chair, I'm speaking French, as you can hear. I want to thank Mister Nemec for his report on asylum, migration, integration, visa policy as well is also covered. So let me thank him for the work he's done, but there's a contradiction here. This money is included under national funds. We have decided to implement European strategies. So Schengen, the asylum package, and there are other ancillary texts.
Speaker 42
So I welcome the fact that we've got this willingness to have the same rules and to have strategies for visa, asylum, migration, reception, etcetera. I just want you to point out how difficult it is to apply this. And then, what about the parliament's monitoring role in the disbursement of these funds? Because they will be part of the NRPPs. As a result, we'll be tabling amendments on that issue.
Thank you.
Georgios Aftias
I'm very sorry. I'm very sorry that I came in late. I was just told that we would talk about this. Greece has a lot of migratory pressure. I come from the island of Samos, and it is one of the islands that has infrastructure, but it has a lot of pressure because we're on the border with Turkey.
So we want resources to be allocated to migration and asylum, and we want to be able to move appropriations and funding between relevant funds. We need to boost Frontex. It's extremely important, so thank you. We need to be able to return illegal migrants quickly. Quickly.
This is one of the key issues that Europe faces at the moment. We need to provide funding to those regions under intense migratory pressure. And the new directive on migration and asylum needs to be implemented as soon as. And we need to make sure that there is monitoring of funds given to third countries such as Turkey. We need to make sure that they respect human rights. I would like us to finish the works that are taking place by the Everest River in Greece.
Mrs. Von der Leyen went there. And there was a hybrid attack with 25,000 Turks and migrants that actually wanted to break the borders. And I was there. I was a journalist.
I witnessed this. And so we need to help the frontline countries from the North to the South. We need very strict budgetary control of the funds. That's very important. But thank you very much, and I'm at your disposal.
Speaker 3
You want no? Okay. Then maybe, yeah, I can only try. Mr. Conrad from the commission, you want to intervene at this point?
No? Okay. Mr. Nemich, a short conclusion.
Matjaž Nemec
Just two words. Thank you at this point for your constructive debate on how we can ensure that our financial commitments truly can match our geopolitical ambitions. And I'm looking forward to amendments. Thank you so much, sir.
Speaker 3
Yes. Just let me add that the deadline for amendments is May 19, and that vote is planned for July 15. Thank you all. Okay. We have to wait for Mr.
Speaker 43
Eke to show up. So we take a short break for Mr. Eke to appear. Okay. Mr.
Speaker 3
Eke is amongst us, so we can go to point number eight of our agenda on establishing the European Fund for Regional Development, including the European Territorial Cooperation and the Cohesion Fund. Mr. Eckert, the floor is yours. Thank you, Chair.
Matthias Ecke
Thanks to your colleagues for this exchange today, because we are talking about one of the union's greatest success stories, which is Cohesion Policy. Since its inception, it has been the main instrument to reduce regional disparities, support lagging regions, and deliver tangible results in Europe for European citizens. So I think that cohesion policy must be accreditedly funded and remain at the heart of the next multi annual financial framework. This budgetary assessment is fully aligned with the positions expressed in this House in the MFF interim report, which I think is clear. And a report adopted by an absolute majority last week in Strasbourg, which calls for cohesion policy to remain as a distinct policy with a dedicated and robust ring-fenced budget in the next MFF.
Speaker 3
Let me interrupt you. People who want to have meetings inside this meeting should go outside and have the meeting. Please go ahead, Mr.
Matthias Ecke
Eckert. Yes, thank you. It's an interesting topic. So maybe you can listen and talk about it later. I'm therefore calling for ring-fenced allocations for the European Regional Development Fund, the Cohesion Fund, and Interact respectively.
I also consider that in order to preserve the identity of Cohesion Policy and respect to treaties, the specific objects of the ERDF, Cohesion Fund and Interact respectively should be clearly defined in a specific regulation establishing these instruments based on their separate ring fenced envelopes. And that these programs should be provided with dedicated budget lines. I therefore consider it important for the lead committee to coordinate its amendments with the NRPP committee to ensure that there is no contradiction with the NRP regulations. So we really need to make sure what is in the NRP regulation, what is in the specific fund regulation. And I think that cohesion policy can only be served if we have the objectives and the budget lines ring-fenced in the specific regulation.
I'm also taking this opportunity to highlight some important aspects of governance, including the need to ensure the full involvement of regional and local authorities in the design, monitoring, and implementation of funds. It's not only implementation, it's also design and monitoring based on shared management, on multi-level governance, and on partnership. These are the principles that have made Cohesion Policy a success for decades. I'm making this point because this is, of course, in line with the lead committee's request so far to ensure that the union's funding for cohesion must be earmarked for each category of regions. All three regional categories need earmarked funding.
In conclusion, I call on colleagues to support in a collaborative spirit this budgetary assessment, and send a strong signal that cohesion policy must remain a distinct, well-funded and democratically accountable policy in the next MFF. Thank you.
Speaker 3
Thank you. We go to the shadow rapporteurs. One minute. Please respect the allocated time. First, CEO Sanchez, please.
Julien Sanchez
Thank you very much. First of all, I'd like to thank the rapporteur for the work that he has done. We actually share many of his concerns, especially the need to bolster accountability and transparency in the use of funds. We need more clearly defined budget lines. If there is to be democratic accountability and proper management of funds, there has to be proper monitoring, evaluation, and tracking of expenditure.
So had funds really achieved their goal and are used properly? It's very important to help the outermost regions that face specific challenges, including access to basic services such as drinking water, which remains a worrying reality. All of this has to be included in the definition of investment priorities. We need to spend money more strictly. It isn't about mobilizing more, but making sure that money isn't scattered, and that they focus on specific needs on the ground.
We will be tabling amendments to bolster the accountability, transparency and oversight of this. Thank you.
Moritz Körner
Dear colleagues, I will talk on behalf of my colleague, Joachim Streich. First of all, I would like to thank the rapporteur for his work. Cohesion policy is a treaty-based instrument. It must contribute to convergence, strengthen competitiveness, and ensure that European funds deliver real added value. However, this proposal raises important questions.
By merging multiple instruments into a single plan, we risk reducing transparency and making it harder to assess how funds are actually allocated. This can weaken both accountability and performance. We therefore need clear structures, measurable objectives, and full transparency across all instruments. Ring-fenced allocations can play a role in safeguarding core priorities, but they must not lead to rigidity. What matters is that funding is used efficiently and where it has the greatest impact.
At the same time, cohesion policy must respect subsidiarity. Regions should play a key role in implementation, ensuring that investments reflect local realities on the ground. Without sufficient clarity and oversight, we risk turning cohesion policy into a less effective instrument. Our focus must be on results, efficiency, and European added value. Thank you.
Thank.
you. Mr. Nordfist?
Speaker 17
Thank you, Chair. I would like to make two points. And first and foremost, as Raphaute also mentioned, I mean, the involvement of regional local authorities, this bottom-up approach is absolutely key here. Also, as indicated clearly in the interim MFF report. My other point would be that we make sure as well, of course, that as well mentioned in the interim report, a strong performance regulation also covers this area.
So it is in line with overall priorities, also when you work on local and regional development. So, I thank the rapporteur. And on behalf of our shadow, Rasmus Andreessen, I can say that he will be active and look forward to the collaboration. Thank you.
Speaker 3
Thank you. Next, and a warm welcome to him, the Reggie Corporater, Mr. Pascal Arimond. Please go ahead. You have two minutes maximum.
Pascal Arimont
Chair, I often don't attend this committee very often, so it's an honor to speak to the budget committee. Thank you, Mr. Ecker, for your report. Congratulations on what you've written. I'll keep it brief. I can support everything that he's written.
We are defending everything in the reggie committee that we see in his text. If we look at the European Commission's proposed structure, we don't support that. We don't think it's efficient, and we don't think it will lead to good management. I am the rapporteur on these funds, Interreg, ERDF, etc. We think that it's a regional level that they have to be managed, and that is reflected in Rapporter's comments.
So we're going to try to defend that, too. I know that the real battle will be in the dialogues. The devil will be in the details. So we need to have good arguments, and we ought to have a common parliament position that we can advocate for in the dialogue. Thank you very much for the report, and I really am in favor of it.
Speaker 3
You. Any other MEP wanting to intervene? If not, I ask Mr. Conrad, if he's still present, whether he wants to intervene on this. Yes, if you want, please.
Speaker 48
Thank you very much for the opinion. The national and regional partnership does not put cohesion aside. They actually put cohesion at the center of programming in shared management in the future MFF. The budget that we have proposed with a non-allocated amount of €450,000,000,000 is actually the amount dedicated to cohesion policy in the next MFF, which is a substantial amount that regions will have at their disposal. The NRP plans, which put indeed these policies together, will actually become easier for regions to manage, instead of having different envelopes, sometimes small ones with different rules.
They have one envelope with the same rules to manage, and also to program according to their needs. So actually, the NRP plans are addressing the local needs in a more efficient manner than today. Another important development is that we have proposed to replicate and reinforce the partnership principle in the next MFF, meaning that regional authorities and local actors will be involved in the programming and the implementation of the plan, also with the possibility of directly interacting with the Commission. So those are legal safeguards, which we have proposed to indeed reinforce the role of the regions in the programming. Thank you.
Matthias Ecke
Welcome the fact that there is so much backing for my budgetary assessment. I acknowledge that those who are here and those who have taken the floor are in agreement. They think that the commission's proposal won't meet the goals on budgetary control, on clarity, or on regional cooperation, and it won't help to meet the specific goals of regional policy and the budgetary lines linked to these goals. The NRPP structure doesn't allow for all of this. We don't know what funds will be used for what purpose.
All the power is in the hands of the member states. That leads to a lot of lack of clarity for final beneficiaries and for us here in parliament. So I'm glad that you welcome my budgetary assessment. And, mister Arimond is from the lead committee, and he sees eye to eye with me. Thank you.
Speaker 3
The deadline for amendment is May 18 at five p. M. And the vote will take place at the meeting on July 15. Thank you. Point number nine, we are now in the transfers.
Budget 26, Section three, no transfer requests are here. Point number 10, other sections, we have requests from the European Committee of the Regions. I give the floor to Mr. François Philippe, Deputy Director for Human Resources and Finance of the Committee of the Regions.
Speaker 49
Please. Good morning, Chair, good morning, members. Indeed, we have tabled a request for the transfer of appropriations to reinforce five budgetary lines. The first one is regarding the maintenance of our technical equipment of the jointly occupied buildings by the core and the ESC. The second concerns our obligation to pay back for our service level agreements with the European Commission when it comes to the corporate management document tool, to our electronic signature tools, and to the CELMENT, which is the tool allowing for management of medical records, which are also to be paid back to the European Commission.
The next and the most important part of this request for transfer corresponds to the web streaming activities of the core statutory meetings and events, which are important from the political point of view, in terms of impact and visibility of our work. The next one concerned also the upgrading of our scanners to facilitate the visits of our visitors and somehow smoother their entrance into buildings. And the last, we transfer with regards to the compliance of the COR where we must have every fifth year an external assessment of the quality of the work of our internal audit. And this time, it will be done with the external service provider. And these five requests correspond to a total of €359,000, more or less.
And we will be able to finance them from the main budgetary line for salaries, where we have savings due to an exceptionally higher vacancy rate than expected. We have a little bit more departures in pension, and a higher vacancy rate. So that would be the first part of our request. The second concerns the modification of the establishment plan, where we would like to convert two AST permanent posts into administrative posts because now with the digitalization and increased request for substantive work, we have managed to pull our AST resources and make some reorganizations in order to facilitate and optimize the use of our resources, but there is a higher pressure on the AD side to support two direct rates. One is for the communication, and the second is for the legislative works.
And the last, because for transformational concerns, a permanent AD post where we also need to reinforce the political side of our activities and transport it into a temporary post 2C to be able to reinforce the political work of the largest political group in the COR. So these are our requests, and I would like to request your positive consent. Thank you very much.
Speaker 3
Thank you. Mr. Nemec, our reporter for the 26 budget, other sections, please.
Matjaž Nemec
As the reporter for the other section for 2026, I can confirm that we have carefully analyzed the request for transfer from the Committee of the Regions, as well as the modification of the establishment plan. I also want to thank you for providing replies to our follow-up questions. We request as well justified, and we see no major reservations. When I came, when it comes to staffing policy, we also consider the request, meritite. However, we do encourage the committee, the committee of the regions, to continue their efforts to maintain a low vacancy rate when it comes to recruitments in the future.
So I can therefore confirm that, as a reporter responsible, my recommendation to the budget is a positive one. And I risk the committee, and I ask the committee to support it. Thank you.
Julien Sanchez
thank you very much. On the modification of the establishment plan, we're in favor because you're not increasing the number of staff members. However, we're against the budget amendment because it's only May, and I'm surprised that expenditure that could have been forecast was not. You're talking about documents for 2024. Usually, this is an amount that you're aware of.
So why are you asking for this amount of money in May? And the same applies for the buildings shared by the CoR and the EESC. So €359,000 at the May as a request just shows that the plans were not done properly. Thank you.
Missus Keller?
Speaker 3
I think we can immediately go to Mister Nemet for an eventual brief conclusion.
At this point, thank you. Thank.
Speaker 3
You so concluded already before you. Thank you. We go to point number 11, building policies. We start with the early warning submitted by the European Training Foundation. I give the floor to Ms. Pilvi Torsti, ETF Director.
Pilvi Torsti
Thank you very much, Chair. So in a very short early warning moment, I will convey two messages from our side. First, why does the ETF have to move to new premises? And second, what are the options for the future? Just a quick reminder what the ETF is, it's an EU agency working in the area of skills and human capital development as part of the external services focusing on the candidate countries and the neighbourhood.
We are involved increasingly in a strategic EU initiative such as the BAC for Mediterranean talent partnerships, Global Gateway, and the future reconstruction of Ukraine. But then to the premises, the first point, why do we have to move. Since the setup in 1994, the ETF has been located in Turin.
Speaker 3
Mister Sti, could you slow down a little bit because the translators are sure.
Pilvi Torsti
Since the setup in 1994, ETF is located in Turin in the then prestigious complex of Villa Gualino. And the seat agreement with the Italian government and the subsequent agreements with the local authorities gave ETF a position where we have paid a symbolic rent of one per year to the region. As is explained in the note provided for the Parliament, the new owner of the Villa Gualina since 2024 is a profit-orientated investment fund. And therefore, the rent is to increase from this EUR 1 per year to approximately EUR 510,000 per year, as the current lease expires in July 2027. And in addition, the property has deteriorated as most of the complex is actually abandoned already for 15 years, and the surrounding park is populated by wild pigs.
So, substantial renovation works with significant costs would be required there. So, my second point, what will happen now? Taken the fact factors listed above, which raised concerns about the suitability and sustainability of Villa Gualina as the ETF premise in the future, ETF has been extensively looking for alternatives. And we had identified three different options, two in the city center and a third one in the UN campus, which unfortunately recently turned into a theoretical option as UN has other plans for that space. Each of the options requires investments in addition to a substantial rent.
Local national authorities are engaged in securing a partial contribution to these investment costs. More precise financial information can only be, of course, provided once the negotiations are finalized. But what is clear, dear Chair, dear members of the Parliament, is that staying in the current premises will be more expensive than the options on the table. So, to close, let me assure, with the support of the commission, we are really doing our best to identify the most suitable option and to minimize the costs for the EU budget. So, here, open for questions.
Thank you very much.
Speaker 3
Thank you. Next is Olivier Chastel, our standing rapporteur for Buildings. Please, Olivier.
Olivier Chastel
Thank you very much, Chairman. First of all, I'd like to thank the ETF representative for the presentation, and also for sending answers to the written questions we sent last week. This file has a huge budget impact. We've just heard that for thirty years, the ETF has benefited from building that it didn't have to pay for. They got it for free.
So any replacement will come at a considerable cost. So I have two points to make. If I've understood correctly, there are fitting out costs that will be borne by the ETF even though this is a lease, even though they're only renting. So I'd like to know why the owners of the building will not be responsible for renovating their own building. So that's my first question.
Why aren't they shouldering the cost? Now in Turin, there has been some research on the property market. But again, it seems that you're looking at old buildings. Wouldn't it be a good idea to take a look at more modern buildings that will have better energy performance, be more energy efficient, and in line with what the commission usually looks for? Because also the installation and renovation costs would be lower.
So these are the two additional questions that I'd like to put to the ETF director, in addition to the written questions sent last week.
Speaker 3
We go to the shutters now. First of all, Miss Holmeier, please. So, thanks a lot.
Monika Hohlmeier
As I had nearly the same questions as Olivier just had, so I just repeat these type of questions and how the cost could be a little bit reduced? Because at the moment, I have the impression that nearly all projects related to premises are quite expensive. And so first, I would like to hear perhaps the answers. And then afterwards, perhaps it's necessary to have further questions.
Nils Ušakovs
I don't have any additional questions after my colleagues already managed to deliver what they are interested to get replies from, and we will be supportive as a group. Thank you.
Speaker 3
Okay. It's quite clear then, okay. The two questions are clearly on the table. Please back to Ityf for reply.
Pilvi Torsti
Thank you very much. Of course, that has been part of the work and the analysis that has started in 2022 already to look at the various premises. If I start with the modern and old buildings, of course, is partially also then goes to the expensive. Turin is, of course, a city made of a lot of historic buildings, many of them old requiring renovation, and newly reconstructed buildings are very few in the city and typically commercial, primarily designed for industrial use and situated outside the city center in industrial areas that are not considered appropriate or suitable for hosting an agency of the union. In this extensive search, we've seen about 10 places with the support of the Turin Municipality, which has also been in the preparation of this meeting, again confirmed their willingness to be supportive in one of their buildings where compensating it as part of the rental cost potential investments that are required to be covered.
And then, so this is partly coming to the next question for the renovation cost, this has been the case when in 1994, the Villa Gualino became the premise, the various stakeholders actually carried the cost of the renovation of the property, and then it was considered in the lease. Similar negotiations, of course, we have proposed in these cases as well that the owners also take their fair part. But so that in a nutshell, Turin City with lots of historic old buildings requiring renovation, and hence, these proposals that we've seen, about 10 altogether, are of this nature and the modern buildings outskirts and the more industrial use. And definitely, all possible options are being studied and have also been studied from our side.
Thank you.
Olivier Chastel
Thank you. I got your answers, but I hear there's also a lot of uncertainty because at the moment you're saying that maybe the local Turin authorities will shoulder some of the cost. But I think we should talk about this file once again when we'll have a bit more specific information, so that we can be a bit more aware of what the financial implications are. Thank you.
Speaker 3
Sandy of the shadows disagrees. I think this is a fair conclusion of what we heard, and the way in which the questions have been answered. So, thank you. We move to the next building item, the EEAS, the EU delegation to Ghana, and more specifically the prior approval. Again, I give the floor first of all to our standing rapporteur, Olivier Chastel, please.
Thank.
Olivier Chastel
you. Ladies and gentlemen, thank you very much, Mister Feeney, for the replies to my written questions last week. The budgets committee is responsible for giving the green light to the EEAS's project to get the authorization to sign a ten-year lease for new office premises of the delegation of the European Union to Ghana in Accra. So it seems that it is justified to look for new premises because the current offices are old. They don't meet safety standards, and there's a lack of space.
The new building covers a net surface of 1,700 square meters and is in line with the current standards. Of course, there is a cost. We're talking about €13,200,000 over ten years, €6,700,000 in rent. So your request shows that other offers were rejected for safety reasons. And so, therefore, we have this rental cost.
And also this contrast is down to the fact that your current rent is abnormally low. So for the new building, we're talking about more than €740,000. So I have a few questions for you. We're going from a building of 1,372 to 1,700 square meters. Will the EES team increase? Or will you be sharing, or are you thinking of sharing the space, the premises with other institutions?
Why this increase in surface area? Given the rental costs, can you tell us what the situation is in Accra, whether there are other options, other available buildings that you didn't consider? And also another question, can you remind us of the overall time frame of the operation? When do you have to move from your current premises? And what is the deadline for taking a decision?
Monika Hohlmeier
Thank you very much. My question goes in nearly the same direction as Olivier just told. That's clear because I see that the rented space is increasing, but the staff is not increasing at the same size. Then we have a triple from around 203,000 to 656,000. And even the answers did not give a real impression because EAS always tries again to explain this. Oh, we cannot explain security.
Yes. You can explain security. That's quite easy to explain security because you don't need to give us the whole rescue plan or whatever. This is not what we expect, but we expect to know what the real costs are. And as I see it, the security costs are not causing the increase.
So there are several other issues, like instead of two meeting rooms, we have five meeting rooms. And so I would expect a little better explanation from the side of the EAS than the one we received, because tripling the cost. And if you add the further cost, as Olivier Chastel was mentioning, then we are over 700,000 in a year. So that's a huge increase from the former, coming from the former building. So I would expect from EAS a little more explanation about this.
Nils Ušakovs
Thank you, chair. Probably one additional question, if I may. Purchasing new premises, was it considered an option? And if not, was, and could you explain why? Thank you.
Céline Furet
Thank you, chair. The questions from my colleagues, Mr. Chastel and Holm, Ms. Holmaya are fair. And so I would ask colleagues to not vote in favor because this lease for our delegation in Ghana is a huge waste of money, millions of euros.
Laurence Muller-Bronn
When we look at your figures and we compare them with the rental market there, the gaps are huge. You've got a rent of more than €32 per meter for your offices. It's what we pay in Brussels. 2,100,000 euros is the extra that you're paying compared to the local prices. Then the fitting out, you're asking for €3,100,000.
Céline Furet
That's thousands of euros per meter squared to decorate these rental bureaus. In Ghana, there are offices available entirely fitted out for a much lower price. You are asking the taxpayer, therefore, to finance this work at three times what you should be paying, and you're throwing money out of the window just for branded products. So I have two questions for the EEAS. How do you justify paying this €2,100,000 rent?
And who is benefiting from this very expensive expenditure? The public should not be financing this. This is why the Patriots will submit an unfavorable opinion, and we will try to block this project. Thank you.
Colm Finney
Thank you very much, Mr. Chairman, Monsieur de Madame de DPD.
Ladies and gentlemen, MEPs, I'd like to start with the second question from Mr. Chastel, which will also allow me to reply to the question from Ms. Hormeyer. The choice of the proposed project is the result of a market research and of a two phase procurement procedure. It's not simple.
It's been a long, transparent investigation that has sought to identify the most appropriate building and the most efficient building in terms of its functioning and in terms of costs. I want to emphasize that the results of this market research tell us that or show us that we are below the average spend. It's not a case of comparing the rent of the current building, because that building is not conformed to standards. Our current building does not conform to electrical or security standards. We can't put a medical metal detector, for example.
Electricity provision is not in conformity with the fire regulations. Three years ago, in fact, our building in the Central African Republic went up in flames, unfortunately. This, fortunately, this happened in the middle of the night. Otherwise, we can't imagine the terrible damage that would have been done, and the loss of life. So the current building is not adequate.
It's a risk, and so we have a need to identify a new option, and we've done this transparently. And we have compared the market prices and also prices in other member states. The rent paid by other member states varies between €25 and €27 per meter squared. So we are actually below the maximum being paid by other member states. Then, security.
This is the only building we've been able to identify that doesn't have other renters in it, other people occupying it. The other buildings we found are shared buildings with security standards that are not good enough, with a shared lift, and therefore, these do not conform to our security standards either. This is the only building. And in fact, those other buildings are more expensive than this one we have found. So in the range of the offers we found, this is the only building that is correct in terms of security.
The service has certain standards, which are established. These are in the document that we present each year to the committee. The average is 35 meters squared per member of staff. These aren't offices of 35 meters squared, but it is a space that includes everything, the meeting rooms, and so on. These meeting rooms are between, we're going from two to five meeting rooms.
Currently, the two meeting rooms in the current building do not allow us to have meetings with all of the mission chiefs. They have to go to the residences to do this. We don't have the facilities to welcome them. So we need meeting rooms for the six sections that will be in the building. These are some small and medium rooms, some for two to four people because we will use them as collaborative spaces.
So this will be a much more efficient use of space than currently, and it will also allow us to share the space in certain cases. We have some of these arrangements already, and we will look for others. And it will also allow us to modify our processes in the future. In the current building, there's no opportunity to increase the number of staff, and we don't envisage doing this. So the meeting rooms, we want to have an efficient way of being able to work with these meeting rooms.
The estimate is, we're waiting it needs to be approved by the budget committee, and we look to be moving into the new building by 2027. The current, or the sorry. The lease contract offers us a possibility of buying the building as well. Currently, the owner doesn't want to sell it. But in that contract, we could have the possibility included.
And this has been done as well with the building that we have in Brazil. I hope I've answered your questions. Thank you.
Olivier Chastel
Thank you to Mr. Finney who is trying to justify this contract. I understand the issues with the current building. That's not under discussion. It's no longer suitable for their needs. Mr.
Finney has also justified the increase in the number of meters squared and the number of meeting rooms, which they will be needing. He's given us an overview of the property market and of the timing of the operation. However, I'm still unsure about this increase in costs. He's explained that other European countries have properties that fall into that range. It's a high range, I think, if we compare the costs to other capitals.
So, I've heard certain explanations, and some of these I accept, but I am still unsure about the costs in Accra, in Ghana, even if this can be justified, given what other European countries pay per meter square.
Speaker 3
Vote on this item in literally a few seconds. Because we are now in voting time and we are certainly in quota, let's first check the machine. I declare the vote open. I close the vote, and the machine is working. The first vote is on the European Committee of the Regions, INFI.
Roll call vote. The vote is open. The vote is closed and it is adopted 27 in favor, 5 against, no abstentions. Then we also have for the Committee of the Regions, the modification of the Establishment Plan. The vote is open.
The vote is closed. It is adopted. Thirty in favor, one abstention. And then we come to building policy, the new lease contract for the EU delegation in Ghana. I open the vote.
I close the vote. And it is adopted 22 in favor, 9 against and one abstention. Thank you all. The meeting of the Budget Committee resumes at 2:30 in the afternoon.
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