European Institute of Romania Polish Presidency of the EU Council European Commission Representation

CONFERENCE

Next EU Multiannual Financial Framework: How to stimulate growth and reduce

development disparities among EU regions?

Bucharest, September 21st, 2011

Table of contents

Message from H.E. Marek Szczygieł — Ambassador of the Republic of Poland in Romania, EU Presidency ................................................................

Conference agenda .........................................................................

Speakers ......................................................................................

European Commission – Press Release ...................................................

The Future EU Budget — What changes, what stays and the implications for Romania, CRPE Policy Brief ................................................................

Priorities of the Polish Presidency in the EU ............................................

Programme of the Polish Presidency of the Council of the European Union .......

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6

11

21

27

37

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3

Message from H.E. Marek SzczygiełAmbassador of the Republic of Poland in Romania, EU Presidency

Message from Ambassador of the Republic of Poland H.E. Marek Szczygiełto participants of the conference:

The next EU Multiannual Financial Framework:How to stimulate growth and reduce development disparities among EU regions?

The European Union is facing enormous challenges nowadays. Due to the huge effort of both the private and the public sector, we have managed to overcome the first wave of the financial crisis. But winning the first battle does not mean winning the whole war. The new challenges related to the possibility of the second wave of the crisis have to be dealt with in parallel to the old well-defined ones, such as the aging of the population, sustainability of the European Social Model and additional pressure on public finances related to the low GDP growth.

At this difficult moment we start the discussion on the new Multiannual Financial Framework for 2014-2020, that will have enormous influence on the shape of EU economy in the years to come. In times of austerity measures adopted in the national budgets, we need to structure the UE budget in a way, that allows us to fully respond to the challenges ahead and use is as an investment tool that helps stimulate the economic growth in the entire Union.

Let me assure you that Poland’s experience confirms that an efficient use of EU structural funds, corresponding with fiscal prudency is the best way to accelerate the economic growth and secure a coherent development of all regions. I hope this outmost positive experience will be reflected in the scope of EU cohesion policy in the next budget.

Poland’s Presidency in the EU Council is ready to make all the necessary efforts to push forward this process, based on the European Commission’s proposal of June 29th, 2011 that has been broadly regarded as a very good foundation for the negotiations. All the EU Member States shared this point of view at the Informal Meeting of the EU Ministers in Sopot, July 28th-29th.

In line with the schedule agreed within the presidency TRIO - Denmark and Cyprus, the Presidency would like to concentrate on an in-depth discussion of the Commission’s proposal and providing all the partners with an opportunity to clearly define and present their positions. Our role is limited to being an honest broker in the process. The final product we plan to have at the end of the year would be the list of negotiation points. It would be handed over to the Danish Presidency. We do hope the list would be rather short.

In order to achieve progress in the negotiation, the Presidency has envisaged a number of debates both in Brussels at COREPER II and General Affairs Council, as well as at other council’s formations. Technicalities would be dealt with in the Friends of Presidency Group. One of the most important political debates involving the European Parliament and the European Commission would take place in October 20th and 21st in Brussels. We are also involved in a series of debates in the UE capitals, either as co-organizers, or as participants. The international conference Next EU multiannual financial framework - How to stimulate growth and reduce development disparities among the EU regions? with the participation of the EU Commissioner responsible for budget, Mr. Janusz Lewandowski, Members of the European Parliament, top level decision makers from Romania and Poland and internationally recognized experts, is an important part of the overall EU Presidency plan in this respect.

I am confident, the conference we organize together with the European Commission Representation in Romania, as well as the European Institute of Romania offers excellent opportunity to thoroughly analyse and discuss the EC proposal in detail and learn more about Romania’s position and expectations. I do believe the findings of our conference would be somehow reflected in the final agreement. I wish you all a very interesting and fruitful debate.

Conference Agenda

6

Registration of participants. Coffee

Opening Session

Welcome address:H.E. Marek Szczygieł, Ambassador of the Republic of Poland in Romania, EU Presidency

Keynote speakers: H.E. Janusz Lewandowski, EU Commissioner for Financial Programming and Budget H. E. Gheorghe Ialomiţianu, Minister of Public Finance, Romania H.E. Elena Udrea, Minister of Regional Development and Tourism, Romania H.E. Leonard Orban, Presidential Adviser for European Affairs, Romania, former Member of the European Commission

Session I: Challenges and opportunities in the next Multi-Anual Financial Framework

Moderator:Mrs. Gabriela Drăgan, PhD, Director General, European Institute of Romania

Keynote speakers:Mr. Waldemar Sługocki, Undersecretary of State, Ministry of Regional Development, Poland Mrs. Luminiţa Odobescu, Director General for EU Affairs, Romanian Ministry of Foreign Affairs — presentation of the message from Minister of Foreign Affairs Teodor BaconschiMr. Marian-Jean Marinescu, MEP, Member of the Special committee on the policy challenges and budgetary resources for a sustainable European Union after 2013, Member of the Committee on Transport and Tourism, Substitute in the Committee of Budgetary Control

Agenda

9:00 — 9:30

9:30 —10:40

9:30 — 9:35

9:35 — 9:559:55 — 10:10 10:10 — 10:2510:25 — 10:40

10:45 — 11:40

10:45 — 11:00

11:00 — 11:15

11:15 — 11:30

CONFERENCE

Next EU Multiannual Financial Framework: How to stimulate growth and reduce development disparities among EU regions?

Bucharest, September 21st, 2011 Location: Hotel InterContinental, Ronda Hall

− Agenda −

7

Q & A session, comments and discussions

Coffee break & snacks

Session II: Next EU budget - Experts’ approach

Moderator: Mr. Cristian Ghinea, Director, Romanian Center for European Policy Speakers:Mr. Daniel Dăianu, PhD, former Finance Minister and former Member of the European ParliamentMr. Stephen Tindale, Associate Fellow, Center for European Reform, United KingdomMr. Liviu Voinea, Senior Lecturer, National School for Political and Administrative Studies, President of the European International Business Academy (EIBA), Romania

Q & A session, comments and discussions

Concluding remarksMrs. Gabriela Drăgan, PhD, Director General, European Institute of RomaniaMr. Florin Pogonaru, President of the Businessmen’s Association of RomaniaMr. Cristian Ghinea, Director, Romanian Center for European Policy

Press Conference of Commissioner Janusz Lewandowski and Counsellor Leonard Orban (location: Ronda Hall)

Buffet lunch

Conference closed

*working languages: Romanian, English

Agenda

11:30 —11:40

11:40 — 12:00

12:00 — 13:00

12:00 — 12:15

12:15 — 12.2512:25 — 12:35

12:35 — 12:45

12:45 —13.00

13.00 — 13.30

13:00 — 14:00

14:00

Speakers

Speakers

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Speakers

Marek SzczygiełAmbassador of the Republic of Poland in Romania, EU Presidency

Ambassador Marek Szczygieł was born in 1969 in Poland. After graduating in law and international relations, he began his career in Foreign Service as desk-officer for Romania and Bulgaria in European Affairs Department of Polish Ministry of Foreign Affairs. Career diplomat, in 1995-2000 worked in Polish Embassy in Stockholm. Later specialized in security policy and held twice the post of Deputy Director in Security Policy Department, MFA, in charge of regional security (2002-2004) and non-proliferation, disarmament and export control issues (2008-2011), as well as the position of Deputy Head of Polish Mission to the OSCE and UN Office in Vienna (2004-2008).In the past he used to head the Interagency Coordinating Committee on Combating Proliferation of WMD. He was also a lecturer at the Diplomatic Academy in Warsaw.Since June 2011 has been accredited as Ambassador Extraordinary and Plenipotentiary of the Republic of Poland in Romania.

Janusz LewandowskiEU Commissioner for Financial Programming and Budget

Janusz Lewandowski was born in 1951 in Lublin, Poland. Economist by training, he obtained his Phd in Economics in 1984 from the University of Gdańsk. His professional career began with a 10-year tenure as associate professor of international trade and maritime transport at the University of Gdańsk. For seven years (1984-1991) he worked at the Polish Ocean Lines and in the field of private consultancy. Between 1980 and1989, he was economic adviser to the Solidarity anti-communist movement and one of the founders of the Liberal-Democratic Congress. In Gdańsk, he established the Research Institute for Market Economy. Mr. Lewandowski served as the Minister of Privatization in Poland twice, between January and December 1991 and between July 1992 and October 1993. Among his major successes was the foundation of the Warsaw Stock Exchange and the mass privatization programme (Program Powszechnej Prywatyzacji). Between 1997 and 2004, he was a member of the Polish Parliament. From 2004 until January 2010 he served as a Member of the European Parliament and chaired the Parliament’s Budget Committee. Since February 2010 has been the Member of the European Commission, responsible for Financial Programming and Budget.

Speakers

12

Speakers

Gheorghe IalomiţianuMinister of Public Finance, Romania

Mr. Gheorghe Ialomitianu was born on 14 September 1959 in Brasov and was appointed Minister of Public Finance of Romania in September 2010. His educational background consists of a Bachelor’s Degree and PHD in Economics, a Master’s Degree at the National School for Political and Administrative Studies.Also, Mr. Ialomitianu is certified as an Accounting Expert and Financial Auditor and improved his experience at the international level studying public administration and taxation issues in France and Sweden. Mr. Ialomitianu has held various positions along the years, combining practice in economics with lecturing at the University in Brasov with being an associate PhD Professor at the University. For 11 years, Mr. Ialomitianu was General Manager and Deputy Executive Manager for the General Directorate of Public Finance in Brasov.He also published 11 books on accounting, taxation and finance and published over 70 articles in Romanian and abroad magazines specialized in economics.

Elena UdreaMinister of Regional Development and Tourism, Romania

Minister Elena Gabriela Udrea was born in Romania in 1973. She graduated in law, administrative and security studies and began her career as a lawyer in 1997. Her politically career started in 2004 when she was elected General Counselor of Bucharest and was designated President of the Legal and Discipline Commission of the Bucharest City Hall. Following the 2004 presidential elections, she was appointed in 2005 State Counselor and Chief of the Presidential Chancellery within the Presidential Administration. In 2006 she became Executive Secretary of the Democrat Liberal Party and was later on (2010) elected President of the Bucharest organization and Vice President at national level in 2011 of the same party. From 2008, she is a member of the Lower Chamber of the Romanian Parliament, elected in Bucharest, being nominated as Minister of Tourism in 2009 and as minister of Regional Development and Tourism in 2010, position that she is currently holding in the Romanian Government.

Speakers

13

Speakers

Leonard OrbanPresidential Adviser for European Affairs, Romania, former Member of the European Commission

Leonard Orban is Presidential Counsellor for European Affairs within the Presidential Administration. He is currently Honorary President of the European Institute of Romania as well as Honorary Ambassador of EUNIC for multilingualism.Between 1993 and 2001, Leonard Orban has been Parliamentary Counsellor for European and International Affairs in the Chamber of Deputies, Parliament of Romania. Starting from May 2001 and until the end of the accession negotiations of Romania to the European Union and the signing of the Accession Treaty to the European Union, in April 2005, Leonard Orban has been Deputy Chief Negotiator and Chief Negotiator with the European Union in the Ministry of European Integration.Leonard Orban has kept coordinating the preparation process for Romania’s accession to the European Union as Secretary of State in the Ministry of European Integration during December 2004 – December 2006.In October 2006 Leonard Orban was nominated as Romania’s candidate for the position of European Commissioner and in January 2007 he became the first Romanian Commissioner in the European Commission. Between January 2007 and February 2010, Leonard Orban has been Member of the European Commission, responsible for Multilingualism. Leonard Orban has graduated the Faculty of Mechanics, University of Braşov and the Faculty of Management, Academy of Economic Studies, Bucharest.

Gabriela DrăganDirector General, PhD, European Institute of Romania

Gabriela Drăgan is professor and deputy dean of the International Business and Economics Faculty (Academy and Economic Studies, Bucharest) and since January 2008, she is has also been the Director General of the European Institute of Romania. She has worked as an economist and scientific researcher for the Research Institute in Electrotehnics, as a scientific researcher for the Institute of National Economy and, during 2002-2006, as a director of European Studies Unit at the European Institute of Romania. She is a J.Monnet professor and an expert in the field of European Integration. She has published, as the only author or co-author, a significant number of books and studies, is a member of Romanian Association for European Integration Studies, European Regional Studies Association (ERSA), Romanian Association of Regional Studies, Director of the Romanian Journal of European Affairs, European Institute of Romania (since January 2008), etc. She has participated as a speaker or moderator in many national and international debates, workshops, conferences (organized by the Romanian Academy, Vienna University, Institute for World Economics - Budapest, European Institute of Japan, Kobe and Tokyo, Centre for Security Cooperation – Croatia, European Forum Wachau - Austria, Hebrew University – Tel Aviv, Corvinus University of Budapest, etc).

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SpeakersSpeakers

Waldemar SługockiUndersecretary of State, Ministry of Regional Development, Poland

Waldemar Sługocki was appointed Undersecretary of State in the Ministry of Regional Development on March 2nd, 2010.He graduated from Social Studies Faculty at Adam Mickiewicz University in Poznań, where he also received his PhD in political economy. He also did postgraduate studies from Strategic Research and Analysis at Warsaw School of Economics. His career started in 1997 at Voivodship Office in Zielona Góra. He took active part in Phare INRED “Eco-development in Spree-Nysa-Beaver Euroregion” pilot program. Since January 1999 he’s been employed as a Deputy Director of Regional Policy Department in the Municipal Office of Lubuskie Voivodship.From February 2007 until November 2008, Mr. Sługocki was a Deputy Mayor of Żagań, where he managed projects co-financed with European Funds. He was also a representative of Żagań in Łużyce Union of Municipalities.In November 2008 he took charge of Department of Regional Development and Spatial Planning. Between February 2009 and February 2010 he managed the Department of Lubuskie Regional Operational Programme.Mr. Sługocki also lectured at the International Relations Institute of Zielonogórski University and headed postgraduate studies on management of irreclaimable European Funds support with elements of European law.He is the author of over a hundred of articles regarding regional policy, absorption of European funds, local government, European integration and agricultural policy.

Luminiţa OdobescuDirector General for EU Affairs, Romanian Ministry of Foreign Affairs

Mrs. Odobescu has a carrier of more than 15 years in the field of European affairs. After graduating the Academy of Economic Studies of Bucharest and completing a Course on European Union in Bruges, she became a public servant in the Department for Foreign Trade, being involved in the negotiation and implementation of Romania’s Association Agreement to the EU. She was also actively involved in the accession process of Romania to the European Union, both from Bucharest and Bruxelles. Between 1999 and 2002 she was head of the unit dealing with trade relations with the EU in the Ministry of Economy and Trade, Ministry of Foreign Affairs and the General Secretariat of the Romanian Government. In 2002 she became a diplomat at the Mission of Romania to the EU in Brussels, being responsible for different economic chapter of negotiations. Between 2005 and 2007 she was in charge with the preparation and coordination of Coreper I meetings. In June 2008 she was appointed Director General for European Affairs in the Ministry of Foreign Affairs, covering both the relations with the Member States and EU affairs and coordination. She has a Ph.D. in International Economics at the Academy of Economic Studies of Bucharest.

Speakers

15

Speakers

Marian-Jean MarinescuMEP, Member of the Special committee on the policy challenges and budgetary resources for a sustainable European Union after 2013, Member of the Committee on Transport and Tourism, Substitute in the Committee of Budgetary Control

Marian Jean Marinescu was born on August 11th, 1952 in Râmnicu Vâlcea, Romania.He studied at the Polytechnic University of Bucharest and graduated the Faculty of Aircraft Design in 1976. He continued his education with various courses in Financial management, evaluation and privatization at Cooper&Lybrand, in General management at IROMA in 1993, in Expert evaluation, economic and financial evaluation at CECAR Craiova in 1996 and in local administration and administrative management at the Higher School of Administration of the Ministry of Interior in Italy, 1997.His engineering career started at Avioane SA, Craiova in 1976 and continued as head of the Craiova section at INCREST Bucharest untill 1991, when he took the position of managing director at CPCA Craiova untill 1996 and then again between 2001 and 2004.He began his career in public administration in 1994 as vice-president in the Local Executive of Craiova. He acted as Secretary-General of the County Executive of Dolj county till 2001, when he took the position of vice-president of the same public institution. In 2005 he occupied the position of Executive President of the County Executive of Dolj county and in 2007 he became First Vice-President of the same institution. In 2005 he was also appointed Chair of the National Commission on Ethics, Statutes and Disputes.Between 2006 and 2007 he was observer for Romania in the European Parliament. In 2007 he became a Member of the European Parliament. He is a full member in the Transport and Tourism Committee and in the Delegation for relations with Albania, Bosnia and Herzegovina, Serbia, Montenegro and Kosovo and substitute member in the committees on Budgetary Control, on Industry, Research and Energy, on Civil Liberties, Justice and Home Affairs and in the EURONEST and ASEAN delegation.From 2007 he has hold the position of Vice-President of the PPE Group in the European Parliament, in charge with budget and structural policies.

Cristian GhineaDirector, Romanian Center for European Policy

Cristian Ghinea has been Director of the Romanian Center for European Policies since its establishment, in 2009. In 2007-2008, after eight years of writing for the Romanian media, he went abroad to study EU Governance at London School of Economics. He was previously involved in civic projects with the Romanian Academic Society, the Center for Independent Journalism, Helsinki Committee and Freedom House Romania. Upon his return to Romania he set out to combine academic approaches and new-found connections to shape a credible and influential public discourse on EU-related issues. He has written chapters on Romania in prestigious international reports such as “Media Sustainability Index” (IREX), “Nations in Transit” (Freedom House), he has participated as EU policies expert and consultant in a plethora of international projects. Mr. Ghinea’s areas of expertise include EU institutional design, democratization, media studies, transparency and accountability in public administration, Republic of Moldova.

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SpeakersSpeakers

Daniel DăianuPhD, Former Finance Minister and former Member of the European Parliament

Professor of economics, The School of Political and Administrative Studies in Bucharest; former member of the European Parliament (2007-2009) and co-author of the EP report on the reform of the regulation and supervision of financial markets; author of “Which Way Goes Capitalism?”, CEU Press, Budapest/New York, 2009; Chairman of the Supervisory Board of Banca Comerciala Romana (2005-2007); Finance Minister of Romania, 1997/1998; Chief Economist of the National Bank of Romania, 1992-1997; Deputy Minister of Finance, 1992; Chairman of the OSCE Economic Forum, 2001; Chairman of The Romanian Economic Society; member of the Romanian Academy; member of the European Council on Foreign Relations; fellowships at Harvard University, The Wilson Center (Washington DC), IMF (Washington DC), NATO Defense College (Rome), etc; visiting professorships at Berkeley, UCLA, Bologna University, etc;. President of Junior Achievement, Romania; Honorary President of the Romanian Association of European Studies; member of the advisory board of several foreign journals;. Member of the Black Sea Region Commission. Other writings: ‘The Macroeconomics of EU Integration: The Case of Romania”, Rosetti Educational, Bucharest, 2008; “South East Europe and The World We Live In”, Bucharest, The Romanian Diplomatic Institute, 2008; with Radu Vranceanu (ed.), Ethical Boundaries of Capitalism”, Ashgate (UK), 2005; with Thanos Veremis (ed.), “Balkan Reconstruction”, London, Frank Cass, 2001; “Transformation As A Real Process”, Aldershot (UK), Ashgate, 1998; “Economic Vitality and Viability. A Dual Challenge for European Security” Frankfurt, Peter Lang, 1996. Contributor to European Voice and Europe’sWorld.

Stephen TindaleAssociate Fellow, Center for European Reform, United Kingdom

Stephen Tindale is an Associate Fellow at the Centre for European Reform, working mainly on energy and climate policy but also on the EU budget.He is co-author, with Prashant Vaze, of the book “Repowering commmunties: small scale solutions to large scale problems” (Earthscan, June 2011), about the role that local government, co-operatives and community organisations play on energy supply and energy efficiency in Europe and North America.Previous roles have included: Head of Communications and Public Affairs for RWE power renewables; Executive Director of Greenpeace UK and Chairman of the Greenpeace European Unit; adviser to Environment Minister Michael Meacher; founder of IPPR Environment Group; adviser to Shadow Environment Secretary Chris Smith, diplomat at UK Foreign and Commonwealth Office.

Speakers

17

Speakers

Liviu VoineaSenior Lecturer, National School for Political and Administrative Studies President of the European International Business Academy (EIBA)

Liviu Voinea, Ph.D., MBA, is a Senior Lecturer in EU economics at the National School for Political and Administrative Studies and an Associate Professor of international economics at the Academy of Economic Studies. He holds an MBA from Stockholm University, a Ph.D. from Academy of Economic Studies, and worked as a post-doctoral fellow at the European Commission’s IPTS - Joint Research Center in Seville, Spain. He serves as President of the European International Business Academy (EIBA), an European organization of international business scholars. He is also a member of the board of Eximbank, the state owned export-import bank. Liviu Voinea has published numerous articles in local and international media, and he has been a regular guest in various TV shows, becoming a public figure among Romanian economists. His recent book “The end of illusion economics. Crisis and anti-crisis: a heterodox perspective” (published by Publica) was a best-seller, while his previous book, “Transnational corporations and global capitalism” (published by Polirom) received the prestigious “Virgil Madgearu” Romanian Academy Award.

Florin PogonaruPresident of the Businessmen’s Association of Romania

President of the Board of Directors of the European Institute of RomaniaFlorin Pogonaru is Chairman of the Businessmen’s Association of Romania, President of the ‘Central European Financial Services’ (CEFS), member of the Supervisory Board of BCR, member of the Economic Advisory Council of the Prime Minister.Since 1997 he has been a member of the Balkan Stability Pact (former SECI) where he has been involved in evaluating and monitoring the critical aspects of the business environment in South-Eastern Europe.The activity of Florin Pogonaru is mainly focused on investment banking and he has been the coordinator of the operations for Romania of some important financial groups like Creditanstalt (CAIB), Bank Austria (IBA) and Alphabank (BIG).Florin Pogonaru has graduated the Academy of Economic Studies, Bucharest, where he has also obtained the title of PhD in economics. He has also graduated the Law School, University of Bucharest.

European CommissionPress Release

Press Release

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Press Release

EUROPEAN COMMISSION — PRESS RELEASE

Investing today for growth tomorrow

Brussels, 29 June 2011 — The European Union has a small budget, but with a big impact for Europe’s citizens. The Commission’s proposal for a multi-annual budget for 2014-2020 responds to today’s concerns and tomorrow’s needs. It focuses on priority funding at the EU level that provides true added value. For instance, a Connecting Europe Facility that funds cross-border projects in energy, transport and information technology to strengthen the backbone of our internal market; significantly more money for Research and Innovation to invest in our competitiveness; and more funds for Europe’s youth – these are just some of the new elements in the Commission proposal. At the same time, this innovative EU budget remains focused: The overall amount proposed for the next seven years is €1,025 billion in commitments (1.05% of the EU GNI) and €972.2 billion (1% of EU GNI) in payments.

In the current times of fiscal austerity all across the EU, the Commission has presented an ambitious but realistic proposal for the next MFF, explains commissioner for financing programming and budget Janusz Lewandowski: through smart reallocation of the budget we have created room to finance new priorities such as cross-border infrastructure for energy and transport, research and development, education and culture, securing external borders and strengthening our neighbours to the South and East. Furthermore, we have modernised virtually all our policies by simplifying our programmes and by putting more conditionality on how funds are being spent. (see full table in annex)

For growth and for jobsA new fund, the Connecting Europe Facility, aims to boost the pan European value of infrastructure projects. With € 40 billion at its disposal, and another €10 billion from the Cohesion Fund, it includes a preliminary list of transport, energy and ICT projects that bring more interconnectivity across Europe. These growth enhancing connections will provide better access to the internal market and terminate the isolation of certain economic “islands”. The Connecting Europe Facility offers opportunities for using innovative financing tools to speed up and secure greater investment than could be achieved only through public funding. The Commission will promote the use of EU project bonds to bring forward the realisation of these important projects.

Sustainable economic growth starts in our towns and regions. The substantial amounts for economic, social and territorial cohesion (€376 billion for the whole period) will be more closely linked to Europe 2020 objectives. A new category of ‘transition regions’ will be introduced. New conditionality provisions will ensure that EU funding is focussed on results and creates strong incentives for Member States to ensure the effective delivery of the Europe 2020 objectives. Partnership contracts will be concluded with each Member State to ensure mutual reinforcement of national and EU funding.

The Commission also proposes to strengthen programmes for education and vocational training. Investing in young people is one of the best business plans. In order to overcome the fragmentation of current instruments it proposes to create an integrated programme of €15.2 billion for education, training and youth, with a clear focus on developing skills and mobility.

Investment in research and innovation in the next seven years will be significantly increased. A common EU strategy called “Horizon 2020” worth 80 billion € will boost Europe’s global competitiveness and help create the jobs and ideas of tomorrow. It will gather all projects in this area to eliminate fragmentation and make sure EU -funded projects better complement and help coordinate national efforts.

For a greener, more modern agricultureWith €371.72 billion, a modern Common Agricultural Policy, which is a truly common European policy, remains of strategic importance for our economy and environment, safe and healthy food and the development of rural communities. It illustrates how one euro can and must serve many goals. 30% of direct support to farmers will be conditional on “greening” their businesses. The Commission also proposes to open the European Globalisation Fund to farmers. Also, the discrepancy in direct payments between Member States will be reduced.

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Press ReleasePress Release

For a safer EuropeBuilding a safer Europe means improving our environment and protecting our climate. The Commission proposes to mainstream these across the board. The Commission intends to increase the proportion to at least 20% for climate related spending, with contributions from different policy fields subject to impact assessment evidence.

The Commission also proposes to invest €4.1 billion in European security to fight crime and terrorism and €3.4 billion in migration and asylum policies, which are crucial for our competitiveness and social cohesion. Both funds will have an external dimension to work with third countries.

For a stronger Europe in the worldThis budget will also help make Europe count in the world through an increased external relations budget of €70.2 billion. Shifting alliances and emerging new powers mean that Europe must do more to make its voice count. € 16 billion will be allocated to our Neighbourhood Policy to promote democracy and prosperity around Europe. We will also continue delivering on our commitments to help the poorest in the world. The Development and Cooperation Instrument (DCI) will receive €20.6 billion to focus on poverty eradication and to maintain our pledge to the Millennium Development Goals (MDGs).

Better resources for the EU budgetThe new multi-annual EU budget will have more transparent, fairer resources and will reduce and simplify Member States’ contributions. The Commission proposes new own resources to the existing ones, as foreseen by the Treaty. The aim is not to increase the EU budget, but to put it on a sounder footing and lower Member States’ direct contributions.

The new own resources would be a financial transaction tax and a new modernized VAT. Simultaneously, the current VAT-based resource (a portion of the national VAT collected by Member States) would be abandoned.The Commission also proposes to simplify the existing correction mechanisms that apply to a number of Member States. This will be done through a lump sum gross reduction on their GNI payments.

Administration 2014-2020Currently, administration expenditure accounts for only 5.7% of the total EU budget. The Commission proposes that there be no increase of administrative expenditure for the next financial period. In parallel, building on the 2004 staff reform (which has already saved € 3 billion and will save 5 billion more by 2020) the Commission is proposing to further modify the Staff Regulations for EU officials.

For more information:The communication is available on the Multiannual Financial Framework websiteMEMO/11/468: Multiannual Financial Framework (MFF): Questions and answers MEMO/11/469: Money where it matters – how the EU budget delivers value to youMEMO/11/459: Myths about the EU budget and the Multiannual Financial FrameworkSPEECH/11/487: Remarks by President Barroso on the Commission’s proposals for the 2014-2020 Multi-Annual Financial Framework

Contacts : Pia Ahrenkilde Hansen (+32 2 295 30 70) Mark Gray (+32 2 298 86 44) Jens Mester (+32 2 296 39 73) Karolina Kottova (+32 2 298 70 19) Patrizio Fiorilli (+32 2 295 81 32)

Press Release

23

Press Release

The Future EU BudgetWhat changes, what stays and the implications for Romania

Author: Mihai Panaite

CRPE Policy Brief no. 10 Jully 2011

The Connecting Europe Facility

should help accelerate the large

transport, energy and

communications infrastructure

projects.

INTRODUCTION

CRPE issued the “Romania and the EU budget reform” report in March 2010, bringing up, among

other topics, the possible structure of the future multiannual financial framework (MFF). We now

have a specific proposal: at the end of June 2011, the Commission launched its proposal for the

next MFF (2014 - 2020). This policy brief sets out to present the main novelties and to point out

Romania’s weaknesses in the context of the forthcoming negotiations.

This will be the fifth MFF, and the first MFF adopted according to the new EU Treaty provisions.

Also, it follows the 2009 public consultation on the future European budget. Given the unanimity

rule of the Council, the Commission’s proposal is ambitious, but not revolutionary (an evolution

rather than a revolution). We anticipated this in last year’s report1.

The most important novelty lies in the way the European budget will be financed, namely the

proposal to adopt a new resource – a tax on financial transactions. This is an older desire of some

Member States: they proposed the establishment of such a tax at international level and

promoted the idea in the G20 framework, but to no avail.

NOTES ON SEVERAL ASPECTS OF THE EC PROPOSAL

A mere glance at the new expenditure categories2 confirms our last years’ prediction regarding a

priority switch from agriculture to research and innovation. However, the magnitude of this

change is moderate. Basically, the allocations for agriculture will freeze in 2013, which means a

reduction of their share from the total MMF, while research expenses will increase significantly

(however, they start from a modest amount).

The cohesion policy will benefit from slightly

increased allocations and will comprise a new

instrument, the Connecting Europe Facility. Another

novelty was brought by the proposal to set up a 5%

reserve from each Member State’s quota, which

could only be used by those states with the best

performance in managing funds.

1 CRPE, Romania and the reform of the EU budget, Policy Memo nr. 8, București, Martie 2010,

http://www.crpe.ro/library/files/crpe_policy_memo_8_ro.pdf 2 European Commission – Multiannual Financial Framework: Questions and answers, Memo/11/468, Bruxelles, 29

iunie 2011.

27

Which is the most appropriate

timeframe for a MFF?

The Parliament is unhappy with its

role and displays budgetary

activism.

The Commission’s proposal also concerns some

technical aspects of the multiannual financial

framework. The optimal duration of a MFF is still put

into question. All MFFs, except for the first one, were

planned for 7 years, but the Lisbon Treaty creates the premises for a review, by establishing a

minimum duration of 5 years. There are voices suggesting that the MFF should be reduced to 5

years and connected to the European political cycle (both European Parliament and Commission

have 5 years mandates). However, the Commission’s proposal is structured on seven years, in

order to streamline the adoption process.

The current five categories structure (competitiveness, agriculture, citizenship, foreign affairs and

administration) allows for minimal flexibility, as the possibilities to reallocate money between

categories are limited. The limits for each category can only be exceeded under specific

circumstances, and not significantly. Thus, a structure with fewer categories would provide a

greater flexibility. The European Parliament’s budget proposal comprises only three categories:

Europe 2020 (including all actions for achieving its goals), Global Europe (including external

actions) and Administration3.

Such a classification has the advantage of financially highlighting the Europe 2020 Strategy,

which is the EU’s main strategic plan and must be provided adequate funding in order to

achieve its goals.

Who will approve the budget and how will this work?

Under the EU Treaty (Article 312), the MFF has to be unanimously approved by the Council and

has to get the Parliament’s approval by a majority vote – the so-called consent procedure. This

procedure implies that the actual negotiations on the future MFF will be carried out between the

Member States. The Parliament can only accept or reject the financial framework, it cannot

submit any amendments. Virtually, the driver’s seat is occupied by the Council, while the

Parliament has only a formal role, approving Member States’ decisions.

However, the political practice following the Lisbon Treaty will modify this institutional

arrangement. The EU legislative is not satisfied with only a yes or no option, it wants to be

entitled to make amendments.

One year ago, the Parliament established a Special

Commission on political challenges and budgetary

resources for a sustainable post-2013 European Union.

Also, shortly before the presentation of the

3 Non-legislative resolution: „Investing in the future of Europe: a new Multiannual Financial Framework for a

competitive, sustainable and inclusive Europe”, INI/2010/2211, European Parliament.

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In December 2010, a group of five

Member

States (UK, Germany, France,

Netherlands and Finland) asked

the President of the

Commission to propose a frozen

budget for 2013.

A tax on financial transactions is

not easy to introduce because of its

potential implications.

Commission proposal for the 2014-2020 MMF, it adopted its own vision of the future budget,

shaped as a resolution (INI/2010/2211).

In this document the Parliament “reminds” that the adoption of a new MFF cannot be done

without its consent and requires the rapid establishment of a work procedure which would

include the Parliament, Council and Commission. As mentioned above, what European

Parliament really aims to is to get involved in designing the new financial framework, instead of

simply approving (or not) the Member States’ decisions.

The Parliament knows that its advantage, the power to reject the new MFF, is not such a

fearsome political weapon as it might seem, because using it would have a negative impact on

everyone involved (including itself). What if it actually rejects the proposed budget? The budget

limits from the last year of the preceding MFF are applied. Although it might threaten with a

negative vote, the Parliament aims at increasing the EU budget; therefore it will avoid extending

the 2013 provisions.

The Parliament’s involvement will not necessarily

complicate the situation. Two opposing groups will

inevitably appear within the Council: the first one will

include the net contributors who will ask for a limited

European budget, while the second will comprise of

new Member States and the Parliament which will

request a larger budget. In fact, the first signals in this

direction have already appeared. From this perspective,

we suspect that the group in favor of a larger budget

has already emerged, opposing the contributors’ group.

However, considering the Council’s unanimity rule and the Parliament’s consent requirement

one can expect the new multiannual financial framework to be a compromise - acceptable for

all involved.

New revenues for the EU?

With regard to EU’s own resources system, things are

slightly different. There is a specific procedure

concerning the introduction of taxation on financial

transactions: the Council takes all decisions (by

consensus), while the Parliament is only involved

through the consultation procedure (Article 311 of the

Treaty).

This means that, no matter the Parliament’s opinion, the Council is free to take its own decisions.

In addition, the decision on modifying EU’s own resources system, if such a decision was taken,

29

The modernized VAT resource

would require the transfer to the

European budget of maximum 2%

from the VAT for goods and

services collected in each Member

State.

would not pass unless each Member State approved it according to its own constitutional

procedure.

Currently, the European revenues consist of:

traditional own resources (mainly custom duties, approx. 14% of the total);

VAT – based resource (approx. 11% of the total);

miscellaneous revenues (approx. 1% of the total consisting of revenues from fines and

taxes applied to EU officials’ salaries);

Member States’ contributions, the so-called revenue based on the gross national income

(GNI); the rest up to 100%.

The last year’s CRPE assumptions are partially

confirmed by the fact that the proposal for a new EU

own resources system includes significant changes.

Thus, the current VAT-based resource would disappear,

being replaced by an upgraded one. This would involve

a simplified and transparent process by which a share

of the VAT collected by Member States is transmitted

to Brussels. However, the extent to which the collected

amounts would be affected by the differences between countries (in terms of consumption and

standard rates) is unclear. It remains to be seen once the final document is published.

A second important proposal, which we have not foreseen in the 2010 report, concerns the

establishment of an own resource based on a tax on financial transactions. This would be applied

to financial institutions – in the widest sense of the word -, including banks, investment funds,

insurance companies, etc. An actual rate would be determined later. The two new resources

could provide up to 40% of the EU budget for 2020, while the GNI-based contributions would

automatically decrease. Since this means a decrease in direct money transfers from Member

States to the EU, the Commission hopes for their consent on reforming the system.

Considering that the potential contributors - financial institutions- are gathered in a few major

financial centers (London is by far the most significant), it is obvious that the money will come

from the countries where these centers are located. An additional tax could cause financial

centers to lose competitiveness, leading to a potential relocation of activities and a loss of

revenue from taxes in the affected states, together with a decreased status and influence.

Decision makers in Brussels should consider the Swedish example: in the 80’s Sweden introduced

a tax on financial transactions which led to transactions’ migration to other financial centers. The

tax was abandoned in the early 90’s because the collected amounts were far below

expectations4.

4 Marion G. Wrobel - Taxes on financial transactions: the international experience and lessons for Canada, 1996

30

The main legislative proposals:

Regulation proposal for the

new MFF

Draft decision on the own

resources system

Proposal for a new inter-

institutional agreement

The Romanian representatives will

go to negotiations without two

major arguments: that money was

spent and it was spent properly.

Therefore, the establishment of a tax on financial transactions at EU level in the absence of an

international agreement is problematic. The EU could lose market share in the field of financial

services.

A possible course of action could be that of charging a very low rate at first and renegotiating

later within the G20, based on the first results. This has also been suggested by the president of

the Commission5. As far as the Council negotiations are concerned, the first reactions show the

support of several Member States and the British opposition. Although this tax would mainly

affect UK, experience shows that solutions can be found in such cases when a Member State is

affected in a disproportionate manner by the financial flows to and from the EU.

WHERE DOES ROMANIA STAND?

Considering the disparities in terms of GDP per capita

which Romania has to recover against developed

countries in the EU, along with the increase of

allocations for programs in agriculture by 2016, our

country should obtain a favorable financial package.

However, the Romanian officials will go to negotiations

without two major arguments: that money was spent and it was spent properly. This has two

main reasons: first, the absorption of funds in the current MFF does not exceed, by any

calculation, 5% of the total, and, second, some payments were frozen because of irregularities

and some Member States’ conviction that Romania is not a state of law.

Our country is expected to obtain not less than an acceptable financial package, since its interests

and issues are similar with those of other countries (such as Poland) from the group asking for an

increased European budget.

WHAT WILL HAPPEN NEXT?

The proposal for a new MFF includes drafts of

legislative acts to be adopted in this respect.

The Commission estimates that the actual legislative

proposals will be presented by the end of this year6.

The negotiations could take place during the Danish

and Cypriot presidency and the final agreement is

expected to be achieved by the end of 2012.

5 Andrew Willis - Brussels seeks financial tax in new EU budget, EU Observer, June 20, 2011.

6 Silvano Presa – The EU Budget and the Multiannual Financial Framework, Brussels, June 28, 2011

31

References:

Documents regarding the EC proposal on the 2014-2010 MFF, http://ec.europa.eu/budget/biblio/documents/fin_fwk1420/fin_fwk1420_en.cfm

European Commission – Multiannual Financial Framework: Questions and answers,

Memo/11/468, Bruxelles, 29 iunie 2011

Silvano Presa – The EU Budget and the Multiannual Financial Framework, Bruxelles, 28 iunie

2011, http://europa.eu/press_room/press_packs/multiannual_financial_framework_2014_2020/index_en.htm

Scrisoarea Primului Ministru David Cameron şi a altor lideri europeni transmisă Preşedintelui

Comisiei Europene la 18 decembrie 2010, http://www.number10.gov.uk/news/letter-to-president-of-

european-commission/

EU Observer, Brussels seeks financial tax in new EU budget – Andrew Willis, EU Observer, 20

iunie 2011, http://euobserver.com/18/32569

Marion G. Wrobel - Financial transactions taxes: the international experience and the lessons

for Canada, 1996, http://dsp-psd.tpsgc.gc.ca/Collection-R/LoPBdP/BP/bp419-e.htm#%286%29txt

32

About the author:

Mihai Panaite is a CRPE affiliated expert. He worked as parliamentary assistant at the European

Parliament, as economist at the Ministry of Finances (2002-2007) and he graduated the

“European Political Economy” master program at London School of Economics.

This report was issued as part of the project “Romania Active in European Debates II”, coordinated by the Romanian Center for European Policies (CRPE) and financed by the Soros Foundation, part of the Foreign Affairs Initiative. The content of this report does not necessarily represent the official position of the Soros Foundation. The opinions expressed in this report are not necessarily the positions of all CRPE affiliated experts or those of CRPE partner institutions and organizations.

Translated by: Ioana Ivanov

Cover photo credit: Images_of_money via Flickr Creative Commons; Photoshop processing: Reinhold Stadler

© CRPE July 2011

Romanian Center for European Policies (CRPE)

Știrbei Vodă 29

ap. 4, București - 1

office@crpe.ro

Tel +4 0371.083.577

Fax. +4 0372.875.089

For further details about CRPE, please visit our website: www.crpe.ro

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Priorities of the Polish Presidency in the EU

Priorities of the Polish Presidency in the EU

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Priorities of the Polish Presidency in the EU

The main objective of the Polish Presidency is that of leading the European Union towards faster economic growth, and an enhanced political community. In order to achieve these targets, the Polish Presidency is concentrating on three fundamental priorities: “European integration as the source of growth”, “Secure Europe”, and “Europe benefiting from openness”. European Integration as the Source of Growth

The Polish Presidency works to foster economic growth through the further development of the internal market (the electronic market included), and use EU budget funds to design and develop a competitive Europe.

In the wake of the economic crisis, the EU concluded that new rules on economic governance are indispensable, and ought to include an array of new tools to prevent recurrent waves of crisis, the European Stabilisation Mechanism being one such tool. The Polish government’s position is that the European Union has to enter a subsequent stage: the time has come to introduce a new model of economic growth, one allowing the Union to secure an appropriate level of economic development for the coming decades, and to guarantee the well-being of EU citizens. If Europe is to become competitive globally, it should not continue focusing exclusively on public finance and on measures to limit budget deficits. Additional action is required.

The view of the Polish Government is that the array of tools serving the purpose of securing sustainable economic growth on a European scale should include a new, multiannual EU budget (beyond 2013). Formal discussions on the Multiannual Financial Framework shall commence under Polish Presidency. The Polish Presidency declares that the new EU budget should be an investment tool used to the purpose of implementing the “Europe 2020” strategy. The Polish Presidency wishes the new budget to serve as confirmation of enhanced cooperation within the EU as the most appropriate response to the economic crisis; moreover, the Polish Presidency believes that the Cohesion Policy should remain the Union’s key policy as a tool which has benefitted and shall continue benefitting all EU member states. The reform of the Common Agricultural Policy, warranting modernisation of European agriculture and its enhanced competitiveness, will be another important issue.

Another objective of the Polish Presidency will be that of finalizing the process of developing a single market, with a view to release its full potential.

Special attention will be paid to the development of electronic services. This shall be tantamount to taking action to abolish barriers blocking cross-border online transactions, and to continue efforts to reduce roaming charges. It is estimated that 60 percent of online transactions in Europe fail to complete for reasons of legal barriers. This is why works shall commence under Polish Presidency to create the 28th legal system facilitating the closing of sales agreements within the internal market; efforts shall include a project of simplifying potential internet transactions for 500 million citizens. The new system would function alongside the 27 current legal systems.

As part of internal market reform, the Polish Presidency works on improving conditions for small and medium enterprises, with special attention paid to their equity access capacity. Small and medium enterprises (SMEs) are key to European economic growth, generating approximately 60 per cent of GDP, and nearly 70 per cent of all jobs. The Polish Presidency shall support the Commission’s initiative to facilitate access to capital markets and high risk funds; moreover, it shall assist SMEs in third countries. The Presidency shall strive to complete a patent system both cheap and easily available to European enterprises. Our economies cannot afford to continue accepting the absence of such a European patent system, which is why it is so vastly important to resolve the issue as soon as reasonably possible. Poland supports the “Single Market Act” reform package of economic directives drafted by the European Commission. An important event to support internal market development – the SIMFO Single Market Forum will take place in Poland.

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Priorities of the Polish Presidency in the EUPriorities of the Polish Presidency in the EU

Secure Europe – Food, Energy, Defence

“Secure Europe” calls for an improvement in security in a number of areas. Firstly, Europe must improve its macroeconomic security. Raising the quality of economic governance in the European Union shall be the primary task of the Polish Presidency in areas of economy and finance. The Presidency supports actions and proposals to improve the regulation and supervision of financial markets, as well as to draft crisis management procedures (to protect financial markets against negative crisis consequences, and to secure financial stability).The Polish Government believes that the “Secure Europe” design schedule should include a step of developing foundations for the European Union’s external energy policy. Poland takes a view that that it is essential to work out solutions to strengthen that policy, and is confident that the EU’s position in relation to major producers, consumers, and transit states of energy resources can be made considerably more robust, should action be taken to enable improvements in the Union’s operations in the international energy environment, ensuring savings as well as more favourable conditions for economic growth.

The Government’s position is that a Common Agricultural Policy reform improving effectiveness of EU funding use should be a yet another aspect of making European security a more robust system. Enhanced CAP should remain market-oriented and take public interest into consideration, with agricultural security and multi-faceted development of agriculture and rural areas as its focus. Resolving the issue of direct payments and of rural area assistance ought to be recognised as a crucial component of the Common Agricultural Policy reform.

“Secure Europe” spells border security as well. In the course of our Presidency, we shall aim to conclude works to amend the regulation on Frontex (the European Agency for the Management of Operational Cooperation at the External Borders of European Union Member States), to the purpose of making Frontex more effective in supporting member states in crisis situations, such as those in North Africa and the Middle East.

Strengthening the military and civilian EU capabilities shall be another important element of the Polish Presidency of the EU Council. The Presidency supports actions to consolidate the direct EU-NATO dialogue.

Europe Benefiting from Openness

During our Presidency, Poland intends to support the EU’s foreign and security policy to boost the Union’s position internationally.

Poland is taking action to proliferate European values and regulations, including further EU enlargement, and the development of co-operation with neighbouring countries. Through the creation of free trade areas with states of the Eastern Partnership, the Presidency contributes to the process of expanding the region embracing the Union’s rules and regulations. Furthermore, a continuation of the enlargement process shall serve to extend our internal market to include millions of new consumers.

In lieu of recent events in Tunisia, Egypt, Libya, and other states of the Southern Neighbourhood, the Polish Presidency wishes to enhance partnership-based co-operation, focusing on support for democratic transformation, for the creation of modern state mechanisms (with constitutional reform foundations), and for making the judiciary and the struggle against corruption more robust. EU support for the protection of fundamental rights, as well as the development of mechanisms to prevent persecution of minorities (Christians included) shall both be equally important to the process of fostering civil society. Simultaneously, assistance will be provided to stimulate economic growth, development and the creation of new jobs, as well as to intensify trade relations, and facilitate the movement of people originating in specific social groups.

The role of Polish Presidency will also be that of ensuring that Europe does not lose sight of her Eastern neighbours. As a part of the Eastern Partnership, Poland wishes for the process of signing association agreements and creating free trade areas (i.a. the finalisation of and/or progress in negotiations with Ukraine and Moldova) to continue. The Polish Presidency pursues the objective of negotiating to liberalise the visa regime. We hope that key political decisions to this end shall be made in September as part of the Eastern

Priorities of the Polish Presidency in the EU

39

Priorities of the Polish Presidency in the EU

Partnership Summit, in the presence of all heads of state and of governments of member and partner states. With regard to Belarus, the aim of the Union is to encourage the country to co-operate with the West, provided it respects the fundamental rules of democracy and human rights.

As part of her Presidency, Poland intends to take a leap forward in support of EU’s enlargement. An important objective of Poland’s Presidency in the UE Council is signing an Accession Treaty with Croatia . Furthermore, we shall seize every opportunity to promote the continuation of accession negotiations with Turkey. We will ensure significant progress in accession negotiations with Iceland, and support EU-related aspirations of the Western Balkans.

The Government hopes that under Polish Presidency, a new framework of co-operation shall be established between the EU and Russia This relates specifically to efforts to sign a new agreement with Russia, and to develop a nEU-Russia Partnership for Modernisation.

In the area of common trade policy, the most important issue of our Presidency is to continue the current round of multilateral trade negotiations as part of the World Trade Organization (the so-called Doha Round). Regardless of further steps to liberalise trade (i.e. eliminate customs barriers), other issues shall be debated, including agricultural subsidies, patent law, anti-dumping regulations and intellectual property protection.

Programme of the Polish Presidency of the Council of the European Union

1 July 2011 — 31 December 2011

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