The European Economic and Social Committee has adopted an opinion on the Mid-term review of the multiannual financial framework 2021-27 proposed by the Commission last June. The Committee feels that the proposal lacks the ambition to respond properly to Europe's key challenges. Short-term solutions are needed to address its shortcomings. The debate on the new MFF should start soon.
The main strands of the Commission's proposal are EUR 50 billion in loans and grants for the Ukraine Facility for the period 2024-27, EUR 15 billion for migration, external action and emergencies, the creation of a Strategic Technologies for Europe (STEP) platform which aims to generate up to EUR 160 billion in investments, and an additional facility related to NextGenerationEU which will tackle the rise in interest rates.
The EESC criticised the proposal as being "completely disconnected from the European Commission's strategic foresight work". Konstantinos Diamantouros, EESC rapporteur, argued that
There is a lack of ambition in what is proposed for the revision of the MFF. The budget is shrinking in real terms, partly due to inflation. For the next MFF, we need a new approach which does more to involve civil society. Nevertheless, the EESC joined the calls for the mid-term review to be completed this year. Johannes Hahn, European Commissioner for Budget and Administration, pointed out during the debate at the EESC plenary session that
The EESC is extremely influential. Your opinion can be used as a tool to reach out to the Member States and the various national parliaments and explain that the MFF is not about pleasing a few people in Brussels: it is about cooperating to make the European Union work well in the future.
Regarding the Ukraine Facility, the EESC supported the idea of using frozen Russian assets as an additional resource for the reconstruction of Ukraine and stressed that in the medium to long term, Europe will need a "major sustained commitment on the scale of the Marshall Plan" for Ukraine. Elena-Alexandra Calistru, EESC rapporteur, said that
We need to agree quickly to establish the Ukraine Facility. And we need to ensure the rule of law both in the EU Member States and in the reconstruction process in Ukraine, with funding made conditional on reform. However, the EESC called for a pragmatic approach: a balance needs to be struck between encouraging reforms and respect for fundamental rights and the rule of law, and "acknowledging the realities" of a country fighting a defensive war. The EESC criticised the proposal for the Ukraine Facility on the grounds that it does not have specific mechanisms to involve civil society in planning and implementing recovery and reconstruction.
The EESC regrets that "the additional resources allocated to STEP are minimal" (EUR 10 billion), meaning that its scale and scope are both much smaller than similar programmes, for example in the United States. The EESC called on the European Commission to clarify STEP's potential leverage. Furthermore, the EESC pointed out that although the Commission president, Ursula von der Leyen called for the creation of a European Sovereignty Fund in her 2022 State of the Union speech, no such proposal was included in the MFF mid-term revision package. Stefano Palmieri, rapporteur at the EESC, said that
We need to make sure that our budget can adapt to changing circumstances, and foresight has to be integrated into the budget process. Margarida Marques MEP said that the budget must be adjusted to the level of the EU's political ambitions.
The EESC continues to call for a far more ambitious financing scheme to support the EU's long-term competitiveness as part of the next MFF, to be discussed as soon as possible. Oliver Röpke, the EESC's president, emphasised that
I believe we can all agree that the European Union's financial planning must be adapted to the evolving challenge as a matter of urgency. The EU must remain agile and responsive in order to effectively address the pressing issues of our time: supporting Ukraine, boosting EU funds for industry and European companies, improving European social cohesion and responding to the monetary and fiscal environment.
Mr Hahn thanked Mr Röpke for taking the leap to make the EESC the first EU institution to involve EU candidate countries in its work by appointing the "Enlargement Candidate Members (ECMs)".
Quotes from the EESC group presidents:
Stefano Mallia, president of the Employers Group:
Group I welcomes the Commission proposal. There's no time to be lost in terms of implementation though, and we would expect more ambition.
Lucie Studničná, president of the Workers Group:
The Commission proposal is not enough to address the current challenges facing the EU. The proposal clearly lacks ambition.
Seamus Boland, President of the Civil Society Organisations Group:
The EU budget has to tie into the ambitions, and the ambitions into the budget. We have variables in our system that require our attention and we must be prepared to address them in the future.