José Manuel Durão Barroso President of the European Commission Statement by President Barroso following the opening session of the second high-level conference on the Multiannual Financial Framework Joint press conference with President Schulz and Prime Minister Thorning-Schmidt Brussels, 22 March 2012 - Montesquieu Institute

It is precisely nine months ago that the Commission tabled its proposal for the next Multiannual Financial Framework 2014-2020, followed by a series of legislative proposals for the different spending areas and a new mix of own resources. I am pleased that the stakeholders considered our proposals as a solid basis for the negotiations, because we tried to combine ambition with realism.

This point was important, because frankly, when we remembered the context of launching of these negotiations, there was a risk that Member States could not even agree on the basis for the negotiations. That was important and of course the overall positive assessment of the European Parliament, with whom we have cooperated very closely, was also important to create this dynamics.

One thing is important to understand - we are saying it all the time. Just in the last European Council the 27 Head of State and Government all agreed that Europe needs fiscal consolidation, needs structural reform, but also needs growth. We have been saying that fiscal consolidation is indispensible because of the high levels of debt in many of our countries, but that is not enough. We need stability and growth. In order to have growth we need some kind of investment and when there is such a limited fiscal space in many of our Member States, of course the MFF, the European budget, is critical for investment.

So the first point that I hope will be clear, is that the European budget is a budget for investment - investment in growth and jobs. This is a very important concept.

Unfortunately some political forces try to present this just as a waste of money or that this is money for Brussels. But it isn't money for Brussels, it is money for the regions, for the workers, for the students of Europe. It is for investing in research and innovation and for giving aids and a scale to count in the world. We are in the 21st century, we are no longer in the past century.

In order to compete with all the Americans, China and other countries - we need some tools on the European level. I think that it is quite clear and we have to be strong about it and say exactly what is at stake. It's not a technical issue, it is a political issue about are we ready or not to benefit from the European dimension, from this Single Market, which is by value still the biggest market in the world. That is why we have presented proposals to link investment to the European Union's priorities and we expect that the Germans are not going now to delete some of those priorities from cohesion, of course, social and economic territorial cohesion, to Connecting Europe Facility, research, innovation, education, SME support and other priorities.

The priorities should be to deliver growth and jobs which is very important as a concept. We also made of course proposals regarding the efforts of simplification regarding some kind of conditionality. Yes, we need this kind of conditionality, because, let's be honest, sometimes some of expenditure is not the best to support growth. That's why we need to link the objectives of the budget to growth enhancing measures and of course the point of transparency. That's why this conference which is indicated to the own resources issue should also be discussed in detail.

According to some preliminary estimations, and I want to underline because we want to be precise about this: these are very preliminary estimations, that the Commission will present today, the FTT, the Financial Transaction Tax could reduce the Member States' contribution to the EU budget by 50%. I think this is extremely important because it means that more money from the financial sector rather than from national, public budget.

The FTT means fairness. The banks have benefitted from huge tax payers' support and banks are traditionally under taxed so I think it makes sense to use part of the FTT to fund the European budget. Better to say replace the national contributions of Member States, part of it, by this tax.

That is why we will insist on this and today Commissioner Lewandowski will present some elements regarding these issues. So I hope it will be a solid, serious negotiation as Prime Minister Thorning-Schmidt just said: we know these are extremely difficult discussions. So I really want to realistic, we do not want to ask our Danish friends that have been working the great fairness and competences always for the impossible. But I really hope that at the end of this Presidency of the Council we have made some progress.

And that progress of course regarding the over all aims. And for that then I also want to agree with Martin Schulz, President of the European Parliament, we have said it and we have practiced it to work as soon as possible involving the European Parliament.

By the way we in the Commission before we were presenting our formal proposal we waited for the resolution of the European Parliament. That was giving some ideas, we did not follow exactly what were the points of the European Parliament, but we had a very constructive relation with the European Parliament. So this is why our institutions - the Council, the Parliament and the Commission - should have a real serious debate based on what should be a common purpose, we come from different positions but the purpose should be a strong Europe, the Europe of growth and jobs.

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