Opening Speech by Vice-President Kristalina Georgieva. EU Budget Focused on Results Conference. 27 September 2016

Transcription

1 Opening Speech by Vice-President Kristalina Georgieva EU Budget Focused on Results Conference 27 September 2016 Good morning everybody, I am very pleased to see the room so full. My name is Kristalina Georgieva and I am Vice-President for Budget and Human Resources. I am also extremely proud to have the colleagues across the Commission working on mobilising or investing the EU budget in big numbers with us today. Last year when we had our first Budget Focused on Results conference I have persistently made the point that despite popular view that budgets are boring, actually they are not. How many of you were here last year? You are the proof that this is the case. You came again. Thank you for that. And many thanks to those, who are joining the discussion on focusing our budget to work hardest for our people, for being part of this conference today. This year we decided that it would be good to bring the audience in discussion by using a little device that is right here in front of you. [voting] And the final warm up question - this is my favourite by the way, on the list - is about the role of research: Research activities financed by the EU programmes led to: research jobs 2. Researchers winning the Nobel prize 3. Inventing the Ebola vaccine 4. All of the above. 1

2 Please make your choice and let's see what we would get on this question. Bravo. 57% got the right answer. It is "all of the above". We got a boost of jobs. We got not one but a couple of Noble prize winners, being beneficiaries of research funds. I would quote a couple; May-Britt Moser and Edvard Moser who got the Noble prize for medicine. That particular winning gave a huge boost for increasing research funds for this MFF. And of course we Europeans ought to be proud that vaccine to fight Ebola was invented by researchers supported by the EU budget. As we can see the all of the above won the day. And that makes me very pleased to actually get us into the subject of today: Budget Focused on Results. This question is the best lead for us to recognise that the sacrifice of our taxpayers, the money they put, this 1% of GNI is actually producing incredible, important contributions for the EU economy. Just to mention some: We have founded in the last years the Youth Employment Initiative and it has benefited 1.4 million young Europeans. We have provided 55 billion in research. This is going to lead to over 500 billion growth over the next 25 years. I'm particularly happy to look at how our budget is engaged in the fight against climate change. 200 billion that are going to make it possible for the European Union to meet its very steep commitment to reduce emissions by 40% by And then we of course have the Investment plan, the so-called Juncker plan, the European Fund for Strategic Investments. We have gotten a small slice from the budget to boost investments that are so not for coming because of the multiple crises that have been hitting our Union. In one year we have already gotten 116 billion investments that translate into jobs, that have boosted the SMEs in Europe by a remarkable And that are giving us a chance to stand on equal footing when we discuss investments with others, like with China on their One Belt, One Road initiative. Since last year we actually have gotten quite a lot done in the area of Budget Focused on Results. I want to report to you on where the progress is and of 2

3 course reflect on what lies ahead. As you remember we structured the Budget Focused on Results to address four questions: 1. 'where we spend'; 2. 'how we spend'; 3. 'how we are assessed'; 4. 'how we communicate'. Let's start with the first question: 'Where we spend?' The very dramatic development in this one year has been a much more determined than ever before deployment of the European Budget toward a limited number of priorities. In fact whenever we talk about our budget, there are two priorities that we pursue: 1. Jobs, investment, growth, 2. Deal with migration, security and the anxiety of our people. That focus on priorities has also been visible when we are looking at the spending patterns in our member states, in the programmes for which they decide how to use the money. We are now coming with a critical proposal during the mid-term review of the budget. It is again on making sure that the space we can create hopefully we will agree with the Parliament and Council on it is used exclusively for these two priorities: jobs & growth, security & migration. In our proposal, the Commission has shared it with Parliament and Council already, we are identifying 6.3 billion from the space we have in margins to be now allocated towards these priorities. The split is 2.4 billion for jobs & growth, 3.9 billion for security & migration. What I would like you to remember is that, as we do this allocation, we take into account very thoroughly also past performance of programmes. In the allocation of 2.4 billion for jobs & growth we will give a boost to those programmes that have been delivering the most for our people and that are highest in terms of being oversubscribed, like Erasmus+, Horizon 2020, COSME, a programme for SMEs, or the Connecting Europe Facility where we are also adjusting the way we use the money. We are giving an extra boost to the European Fund for Strategic Investment. It has proven that it is able to deliver. Thus, we would lift it up so it can be reaching half a trillion by the end of this financial perspective. If it continues to deliver we hope it would be moved into the next budget as well. When we talk about security & migration the split there is 1.4 billion for addressing the root causes of migration, for external action and the remaining 3

4 2.5 billion to help our countries, as well as to build a strong capacity of the Union to protect its external borders with the new agency that has been recently created. But the screen that anybody has to pass is: are you contributing to top priorities, and are you performing well? This is a discipline in the budget that we will relentlessly pursue day in, day out. Secondly: 'How we spend'. This is where I think - Mr Lewandowski is here - this is where we, the team that works now in the Commission on budget owe a debt of gratitude to those who have put together this multiyear financial perspective. Why? Because to a great degree, due to the assistance of the Parliament but also the understanding in Council, we have a budget that is more agile. There is more flexibility in it. And to be honest, I don t know how we are going to cope in the Europe of ours, hit by multiple crises, if we didn t have that flexibility of the budget. But we are using it wisely. We have been able to more than double funding for migration because we have flexibility built in the budget today. And we believe that has to be built further. It has to be expanded. So, in midterm review we are making a set of proposals that are aiming in the direction of a more agile budget. One is to create a buffer against chocks. What we know now is that our world may be richer but it is also more fragile. There are chocks that come from the financial system. They get very quickly, moving to circulate the world. There are chocks that come from events in the neighbourhood, because of conflicts. Chocks that come from climate change and of course we have one sort of self-inflicted injury - the chock that comes with the decision of the British people to leave the European Union. I do not know what is going to hit us next. I have no idea what is the next one to come. But I know that it will come. And therefore a prudent attitude to the budget requires building a cushion against these chocks. So how are we going to do it? We are proposing first to use unspent amounts, in other words funds that are being de-committed, to go into reserve funds. 4

5 We may use it, we may not use it, but it is there so we can immediately act if a chock is to hit. Secondly, we are proposing in external action to create a flexibility cushion by not programming 10% of the money available. You have it but do not commit it fully because we do not know what may come to hit us. Thirdly we have two very successful instruments; the flexibility instrument and the emergency aid reserve. Time and again they came to our rescue but also, as I remember very well from my days as Humanitarian Commissioner, to the rescue of people for whom that quick action meant difference between life and death. We are proposing to double this instrument so our capacity to respond is stronger. We are very keen to see further the advancements in cutting red tape. How many of you are working on EU projects? Implementers? Not many implementers here in the room. Well, there is some. What would you think of the procedures that are attached to getting access to EU money? Up/down? Well the answer is very appropriate because we have gone some way in simplifying procedures and trying to get access to EU money to be faster and more effective, but we have a way to go. And this is why we are putting an emphasis on simplification and on revision of the financial regulation. We count very much on Parliament, I am looking at Ms Grässle but everybody I see, other members of Parliament, and on Council for us to work hand in hand not to lower the standard of financial accountability but to eliminate processes that are on the way of delivery. The Court of Auditors, I see Mr Lazarou, time and again tells us that simple rules mean fewer errors. They actually protect against fraud. So that we have to take a forward. How we spend also goes into how we use our money to leverage private sector investments. Our budget is small but if it is a magnet to unleash the liquidity that is currently sitting idle in the financial system. We all know that it is so idle that interest rates have gone down and down in negative territory. If we can use the budget to unleash the potential of private investment that would go a long way to address the problems of our Union. 5

6 'How we are assessed' is the third element where we are making very good progress. We have created an inter-institutional working group on performance to shift the assessment of the budget from whether we follow the rules towards 'what is it that we are getting for the money'. The Court of Auditors has said that you need a completely new approach to accessing spending and it has to be zeroed in on performance rather than only on following the rules. But it doesn t mean that we're abandoning following the rules. We are seeing a very good trend of reduction of the error rate. I hope we will sustain it. We are working with the Court to be more mindful that in multiannual programmes we also have to know in the end, when corrections are being made by member states, what is the amount at risk at closure. We have done an analysis, very interesting, amount at risk at closure, after corrections, between 0.8 and 1.3% in the sample we have assessed. This is under the materiality threshold of 2%. We understand that the Court has an obligation and opt to measure annual but we want to have the incentive for corrections to take place so errors are eliminated. And of course, even better, fewer errors are being made because of the fear of correction. Finally, 'How we communicate'. People are telling us time and again: 'You guys are really not good in telling your stories. You do a lot of good for Europe but the citizens are kind of clueless what it is.' Whether this is entirely true or not I would doubt. Every time I am in my home city of Sofia and I get on the metro well we would not have had a metro if the EU did not invest in it. But it is true that our reporting system, our communication to the citizens needs to be improved. Last year I showed you the app. We have worked on it to simplify it. Now it's populated with more than 1000 projects. Our objective is to get to the point when this is the portal. Everybody can download it. You have this in your materials. This is the app how you can get it on your phone or ipad. If you scan the code you can download it right away. Please do it, because when more people do it then you would be those to put pressure on us to harmonise our data input. Because at the moment we still have some differences in how we present our projects. This is on the way of helping our citizens with one click to be able to see what the EU is doing in the area he or she lives. 6

7 We are now extremely determined to see how we can engage more the citizens in decisions about EU budget. Because the best way to communicate to people is to do what they believe is important to be done. Should there be a road or more investments in higher education? We want the citizens to say. We want that input from people. A little bit the way you are voting now to get this to be the mentality of how we determine the use of the budget. Well, all of this is about this current MFF but simplification and revision of the financial regulation go a long way to determine how the next MFF may look like. We will have a panel on the future of the MFF so I will be very short here. Just to say three things. 1. Obviously for the Union the budget is important. For Cohesion countries, this is like the fuel of our engine of convergence. It allows regions and countries falling behind to be lifted up, for their benefit and for the benefits of all of us. When our economies are strong we can cope with anything that comes our way. For agriculture, those of us who travel around and see the beautiful landscape, the beauty of Europe. When we go and purchase food that is healthy and grown locally by our farmers. When we see how we are now trying to bring young people to rural areas to give them a life and a future. This is what the friends of agriculture are all about. So, we have friends of cohesion and friends of agriculture. And we also have friends of rebate. And the friends of rebate actually play a very important role because they are usually from countries where there is a higher degree of scepticism about Europe. So these three groups, the friends of cohesion, the friends of agriculture, the friends of rebate, they have managed to establish something that is symbolically exactly what the EU is; peace. Financial peace. We get together, the three groups sort it out and we have a budget. Of course we fight like dogs and cats but we have a budget. And this equilibrium of these three groups has served us up to now. The question is: could it serve us well in the 7

8 future as well? Especially since we know that with the decision in the UK, at least the group of friends of rebate would reopen that part of the equilibrium, provided that in the end really the UK leaves, which we still do not know. They have not officially said that they are moving out. So, my take is the following: we will have starting next year a chance to debate the future of the EU budget. The future of the EU budget is a big part of the future of Europe. When we debate it we will have to make choices. Are we going to go for revolution or incremental improvement or something in between? We will have to be answering very serious questions, for example: Is the reformed Common Agriculture Policy achieving a high degree of European value added? Is the greening working? How much is it working? Is the cohesion policy delivering high value added? How is the new system of conditionality working? Should it be changed, retained, abolished? Is the European Fund for Strategic Investments delivering the high additionality that is expected from it? Do we have the right balance between grants and financial instruments? Are our financial instruments delivering as much as we expect from them? What is the criterion to choose which instrument that is most appropriate for what? And finally we have these big projects like Copernicus, Galileo. How are they performing? Is it justifiable? Are they necessary? Then we come into the very difficult area. What about the new priorities? People are anxious. They are anxious on security ground. They are anxious in terms of how we cope with the overflow of problems in other parts of the world into Europe. How much should be the part of the EU budget engaged in helping to deal with this anxiety? Luckily for me we will have a panel in the afternoon to answer all these questions. For my side I think my job today has been to do two things. To tell you that Budget Focused on Results is here to stay and it is already making a difference. And two, I expect you plus more, in this room next year in September. Thank you. 8