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The Future of Europe

As Greece returns to regularity, important decisions for the Future of Europe need to be taken. The European Council of 28 and 29 June 2018 showed, once again, that Migration remains a major issue. This issue has tested the unity of the EU and its ability to respond to an international problem, in a manner that, on the one hand would be consistent with its fundamental values and principles and on the other hand would not call into question the relevant provisions of the international law. At the same time, the Economic and Monetary Union, an initially dominant issue, at least since the French-German agreement of 19 June 2018 on the EMU Deepening Roadmap, appears to have been somewhat “downgraded”.

Deepening EMU and Future of Europe

At the Euro Summit, on 29 June 2018, in the context of the Leaders' Agenda (EU 27), the leaders agreed that the ESM (European Stability Mechanism) will serve as a common "safety net" of the Single Resolution Fund, financial arm of the Banking Union. The characteristics of the “safety net” of the Single Resolution Fund will be determined by the Eurogroup, by the end of the year. However, it appears that the size of the "safety net" will be between 55 and 60 billion Euros (as in the case of the Single Resolution Fund) and will operate between 2021 and 2024.

In the context of the Leaders' Agenda, the Euro Summit of 29 June 2018 decided that, in order that the Banking Union be completed, co-legislators should adopt the necessary decisions before the end of the year, based on a road map which foresees the launch of political negotiations on the European Deposit Insurance Scheme.

Greece stresses that the European Deposit Insurance Scheme is an important measure for achieving risk-sharing in the Banking Union. It supports the launch of political negotiations on this issue and the importance of balancing the reduction measures with the risk-sharing measures of the banking package.

In addition, the Euro Summit decided that the European Stability Mechanism will serve as a common "safety net" for the European Deposit Insurance Scheme and the Common Resolution Fund.

New MFF and Future of Europe

Discussions on the Future of Europe are linked to those concerning the form and content of the new MFF, both for the sake of time and substance. In view of the end of the current framework at the end of 2020, decisions on the multiannual budget beyond this year should be taken as early as possible in 2019, if possible before the European elections of May 2019. These two categories are also linked as far as the substance is concerned, since the policies that will characterize Europe's future course will depend on the content of the decisions on Europe's financial possibilities for the future.

Since last May, the Commission has submitted its horizontal proposals and a number of sectoral proposals. The MIF 2021-2027, according to the Commission, is rising as a percentage, from 1% to 1.11% of EU-27 GNI plus 27, rather than 28, as a result of BREXIT. In fact, it is neither a proportional increase in the MFF nor an increase in the expenditure of the MFF in absolute terms. The Commission's proposed incorporation of the EDF (European Development Fund) into the MFF, which works out of the current framework, reduces spending by some 30 billion Euros over the seven-year period by equalizing the level of expenditure between the current and the new framework. If we take also into account the cost of the euro area's fiscal capacity and the increases in expenditure categories - excluding agriculture and cohesion, for which expenditure is reduced by 5% and 7% respectively – then, there is a "deficit" that can be covered by an increase in revenue or a reduction in the costs of the two traditional policies that are crucial for Greece, or a combination of both.

On our side, we argue that addressing the above-mentioned "deficits", which should include the budgetary impact of BREXIT (€ 10-14 billion per year), should be achieved through the increase in budget revenues. Increase in revenue, including the creation of new real own resources, of a neutral budgetary character (e.g. financial transaction tax, internet tax or green new own resource).

A first draft of a “negotiating package” was produced at the beginning of the Austrian Chairmanship-in-office. This “package”, which covers all aspects of the MFF, will serve as a basis for reaching the final accord through the negotiation process within the Council.

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