Sun. May 29th, 2022

Brussels, 15 March 2022

The European Parliamentary week, the yearly meeting of MEPs and national MPs to discuss economic governance and budgetary issues, opened on Tuesday, with the backdrop of the war in Ukraine.

Opening the event, EP President Roberta Metsola said the “combined realities facing Europeans make it essential that we remain united and coordinated. The targets the EU has set itself are real, necessary and, together, achievable”. She added the exchange of ideas, including during the Parliamentary Week, allow us to coordinate the best solutions.

European Commission President Ursula Von der Leyen said that the “new strategic reality required a different level of cooperation between Europeans”. This applied to defence but also to other areas. Ms Von der Leyen added that national parliaments are essential to turn European investment into domestic growth.

Plenary session on EU own resources

Participants recalled that for decades, no new streams of revenue for the EU budget (“Own Resources”) were created. The introduction of the recovery plan “NextGenerationEU” however was a turning point: a huge support package for member states, mainly financed through borrowing on the financial markets, which has to be reimbursed eventually, creating an impetus for the creation of new sources of revenue for the EU.

José Manuel Fernandes (EPP, PT), co-rapporteur on the EU’s Own Resources said: “If there are no new own resources from 2027 onwards, the budget will be cut by an average of €15 billion per year to repay the debt from the recovery plan. That is a 10% cut. That would be unacceptable. Fortunately we have an interinstitutional agreement that is legally binding, and which commits us to implement the three own resources that are on the table, possibly also a tax on financial transactions and others, with an objective: the basket, the result, the amount of the revenue must be sufficient to at least pay the debt committed to implement the EU’s recovery plan ‘NextGenerationEU’. Otherwise we would be against the next generations.”

Valérie Hayer (RENEW, FR), co-rapporteur on the EU’s Own Resources, said: “There is a growing discrepancy between the ever-increasing ambitions demanded of the European project and the ridiculous size of the EU budget, which amounts to 1% of GDP. But today we are at a turning point: with the legally binding interinstitutional agreement we negotiated we now have proposals for new Own Resources which are on the table, and on which we are working. We have to go fast, because there is also the international context: we want Europe to be geopolitical, we want it to protect us from external threats, we want to get out of our dependencies – but today we are still unable to finance all this with the European budget.”

Watch the Own Resources plenary debate again.

Plenary session on the reform of the Stability and Growth Pact

During the second plenary panel of the day, MEPs and national MPs discussed the impending review of the Stability and Growth Pact and heard from the European Commissioners responsible, Valdis Dombrovskis and Paolo Gentiloni.

The Chair of the EP’s economic and monetary affairs committee, Irene Tinagli (S&D, IT) said that the Russian invasion of Ukraine made it all the more important for EU countries to act in a coordinated way when faced with the changing circumstances which lay ahead. She added that in the review it would be important to strike the right balance between rules which delivered stable budgets but also allowed for the needed transitions.

Margarida Marques (S&D, PT), the EP rapporteur on the review of the macroeconomic legislative framework said that the revised European economic governance framework must build upon the lessons from the Next Generation EU. Also, the deactivation of the general escape clause should be carefully reconsidered because new investment programmes, such as REPowerEU are coming as an addition to the already agreed investment programmes. In this line it would also be important not to further delay the creation of a common fiscal capacity.

Watch the Stability and Growth Pact reform plenary debate again

Background

The European Parliament organises annually, together with the Parliament of the Member State holding the rotating Presidency of the Council of the European Union, a high-level meeting with the participation of Members of the European Parliament and of all EU national Parliaments. Such meetings address topical themes concerning the economic, budgetary and social policies of the Union. It is the largest annual meeting organised by the European Parliament with national Parliaments.

The Recovery and Resilience Facility (RRF) is the biggest building block of the biggest EU economic recovery and support package – “NextGenerationEU” – ever adopted. Parliament is due to adopt a first implementation report on the Recovery and Resilience Facility in June 2022.