OPENING SPEECH BY MR VYTENIS POVILAS ANDRIUKAITIS, DEPUTY CHAIRMAN OF THE SEIMAS, CHAIRMAN OF THE COMMITTEE ON EUROPEAN AFFAIRS ON NEXT EU FINANCIAL FRAMEWORK AFTER EU ENLARGEMENT 1 December 2003
OPENING SPEECH BY MR VYTENIS POVILAS ANDRIUKAITIS,
DEPUTY CHAIRMAN OF THE SEIMAS, CHAIRMAN OF THE COMMITTEE ON EUROPEAN AFFAIRS
ON NEXT EU FINANCIAL FRAMEWORK AFTER EU ENLARGEMENT
1 December 2003
Thank you, Mr. Chairman,
Ladies and Gentlemen,
I would like to start by thanking the Danish Embassy to Lithuania, the Ministry of Foreign Affairs and the Ministry of Finance for organizing this round table discussion. Todays topic: the next EU Financial Perspective after EU enlargement has not yet been widely debated in Lithuania. For evident reasons, this is a new topic for most of us here, in Lithuania. At the same time, the fact that we are here for the specific purpose of discussing the next EU Financial Perspective reflects the new reality we face and the qualitatively new stage of Lithuanias European integration.
I would also like to sincerely thank the experts from Spain, Denmark, Sweden, Germany, Estonia, Latvia, and the European Commission for taking your time, coming to Lithuania and sharing your views on the wide-range of issues with regard to the Agenda 2007 of the EU. We highly appreciate your knowledge and expertise.
The form and content of the next EU Financial Perspective, which starts on January the first 2007, will inevitably be influenced by new realities faced by the EU. Nobody doubts that the next perspective will differ from its three predecessors in different aspects. In 2007, the EU will probably be comprised of 27 member states. Resulting from the Treaty of Nice, the number of policies funded from the EU budget will increase. Thus, increasing the need for extra budgetary resources. In addition, due to the current enlargement, the relative number of states - net payers to the EU budget - will decrease.
The draft Constitutional Treaty of the EU (Article III-310) does not in essence alter the current procedure of establishment and approval of the Unions annual budget. The proposal to implement the Unions budget in accordance with the principle of sound financial management is welcome. Moreover, that this principle is applicable not only to the Commission, but to all EU institutions.
On the other hand, the role of the European Parliament in the process of setting up Unions annual budget should not be underestimated. Its participation in the co-decision procedure grants the necessary democratic legitimacy to the entire process. Recent decisions of the ECOFIN Council aimed at weakening the budgetary powers of the European Parliament to consultation procedure should, therefore, be rejected. And the IGC should stand by the solutions offered by the Convention.
The draft Constitutional Treaty, however, provides for a different procedure for legitimising the Unions multiannual financial framework. Under Article I-54, (quote) A European law of the Council shall lay down the multiannual financial framework. The Council shall act after obtaining the consent of the European Parliament which shall be given by a majority of its component members and The Council of Ministers shall act unanimously when adopting the first multiannual financial framework following the entry into force of the Constitution (end quote). Thus, the multiannual financial framework will not be set under an inter-institutional Agreement, as is the case now, but by passing a European law - an equivalent of the present-day regulation. The European law will be directly applicable throughout the EU and will ensure that the Unions expenditure develops in an orderly manner and within its own resources limits.
The Council formation in charge of the multi-annual financial perspectives will most probably be the ECOFIN, but the final political word, no doubt, will belong to the European Council.
With regard to the development of Unions own resources system, it should remain objective, transparent, simple, with low administrative costs, and based on criteria, which best reflect the paying power of all the member states. Regretfully, the current formation of the EU budget is socially unjust. It calls for reform. But the proposal to modify it through the introduction of a direct European tax met with a strong opposition of a number of members of the Convention. This demonstrates that the proposal is premature and requires deeper consideration. Meanwhile, other sources for the development of Unions own resources could be sought. For Lithuania, the safest solution, from the economic point of view, would be to direct the reform of the Unions own resources system towards the percentage of the Gross National Income (BNP-Bendrosios nacionalinės pajamos).
True, there also remain such issues as the UK rebate. In my opinion, there are ways of phasing-out such budgetary solutions and the EU should be looking at them.
The setting up of EU policy priorities and budgetary solutions for the next EU Financial Perspective will inevitably reflect the increased expenditure of the enlarged Union. The Common Foreign and Security Policy in the broad sense and its subcategories like Wider Europe, Balkans, Middle East; the EU cohesion policy after enlargement, rural development, CAP reform, Schengen Facility, New Neighbourhood Instrument are the issues to be widely debated during the next two and a half years.
Lithuania, as a full-fledged member of the EU, will actively participate in this EU-wide policy debate. As every other member state, Lithuania has its own interests at stake. To mention just a few sufficient funds for tackling the consequences of the decommissioning of the Ignalina Nuclear Power Plant, funds for the construction of VIA BALTICA, RAIL BALTICA, the power grid between Lithuania and Poland, the transit railway system to and from the Kaliningrad Region.
As the next EU Financial Perspective will take its form in spring 2006, at this time it is too early to start drafting specific proposals. Before we do that, we need to hold wide debates in different fora in and outside Lithuania. The debates in the Seimas, and a proactive stand of the Lithuanian Ministry of Finance would no doubt contribute to the subsequent formulation of the substantiated Lithuanian proposals.
In conclusion, I would like to wish you an open and enlightening discussion. Unfortunately, other commitments require my presence in the Seimas. And soon I will have to leave you. For which I apologise in advance.
Thank you for your attention.