The President of the European Commission, Jose Manuel Barroso has recently delivered his first “State of the Union” address before the European Parliament. The speech has become controversial even before being given as, in order to ensure a full house, the Conference of Presidents of the European Parliament has suggested that MEPs who miss the debate should be fined. The political group leaders wanted to introduce presence checks in the plenary; hence a financial penalty could have been imposed on those MEPs not present at 2 out of 3 checks. But, taking into account the MEPs general opposition, this absurdity was, at the end, abandoned by the Conference of Presidents. One could wonder if Barroso speech is worth to listen to, as MEPs could have been threaten with financial penalties to attend it.
Barroso has not focused much on the present “State of the Union” but he has given an outline of the Commission work programme for the next 12 months.
Barroso recalled the economic and financial crisis, and according to him the EU “have withstood the test.” He said “We have provided many of the answers needed – on financial assistance to Member States facing exceptional circumstances, on economic governance, on financial regulation, on growth and jobs.” Moreover he said “Those who predicted the demise of the European Union were proved wrong.” However, the Eurozone’s response to the Greek crisis has exposed its weakness. In fact, it has failed in all shapes and forms. The EMU has now proven to be a failure. All measures to prevent the crisis have failed. Indeed, the crisis has exposed that the whole system of EU government is not working, is far too expensive and bureaucratic. Brussels has created this mess, it was unable to react to it, and when the ship was on the brink of sinking, the EU leaders, through back door meetings, decided to break every treaty rule which explicitly states that no member state is liable for the debts of another.
The President of the European Commission said “My message to each and every European is that you can trust the European Union to do what it takes to secure your future.” However, it is important to recall, that according to the Spring 2010 Eurobarometer, an opinion poll organised by the EU, 47% of citizens do not trust the EU.
Barroso has identified five major challenges for the EU over the next year. Unsurprisingly, “dealing with the economic crisis and governance” is at the top of the agenda as well as implementing the Europe 2020 reform agenda, “building an area of freedom, justice and security”, the EU budget and strengthening the EU’s global stage position.
Barroso has stressed that Brussels is “making important progress on economic governance.” The Commission is ready to present on 29 September legislative proposals aiming at completing and concluding the so called “new framework for economic governance.” The Commission is planning to amend the Stability and Growth Pact in order to increase surveillance and enforcement. Barroso has said “We will match monetary union with true economic union.” We argued before, that the sovereign debt crisis has opened the door for further economic and fiscal policy integration – the EU is moving fast towards the economic government. If the member states are already in a straightjacket, the situation is set to get worse as their flexibility will be further reduced, particularly with a strengthen stability pact and budgetary surveillance. In a very near future member states economic and fiscal policies will be further co-ordinated at EU level. National governments would no longer be responsible for a great range of domestic economic policies. The EU's is therefore moving towards a single economic policy. Tax harmonization would be also a manifestation of an European economic government. Algirdas Šemeta, the European commissioner for taxation, is prepared to push for an agreement on common corporate tax rules. In fact, Barroso has announced that the Commission will present in 2011 a "Single Market Act" which will contain a list of priority legislative proposals including proposals for a common consolidated corporate tax base (CCCTB).
Unsurprisingly, Barroso has put too much emphasis on the implementation on Europe 2020. It is well know that the Lisbon Strategy aiming at transforming the EU by 2010 into “the world’s most competitive and dynamic knowledge-based economy” was a total failure, targets, including employment and economic growth, were not met. One could wonder whether the new EU's strategy for sustainable growth and jobs will have the same faith. The UK is now caught on the EU economic and employment policies under the new 2020 strategy that won’t work.
Barroso has stressed that Brussels must ensure “energy security and solidarity.” The Commission will present during 2011 an energy action plan for 2011-2020. The Commission is also planning to present an energy efficiency strategy drawing out how to reach the target of 20% for 2020. Presently, the EU has a non-binding energy efficiency reduction target of 20% by 2020 but it seems that the Commission is planning to set mandatory energy-saving targets. It is important to recall that Brussels has recently adopted an Energy Efficiency Package which will substantially increase administrative burdens.
It is well known that Brussels wants to create an area of freedom, justice and security. Hence, one of the Commission’s priorities for 2011 will be implementing the Stockholm action plan. The Stockholm programme covers issues such as border controls, police and customs cooperation, criminal and civil law cooperation, counter-terrorism, asylum and immigration, visas. The Lisbon Treaty provides for further integration on these issues. The Lisbon treaty and the Stockholm Programme would be, therefore, the ultimate surrender of the justice and home affairs policy to Brussels. There will be an increase in the number of legislation passed in the area of justice and home affairs. The Lisbon Treaty and the Stockholm programme will have a major impact on the UK judicial system. It is therefore essential that the Government put its foot down and opts out of the future legislative proposals set to come out from Brussels under the Stockholm programme. Once it decides to opt in it will be subject to the ECJ and the European Commission enforcement powers.
The President of the European Commission also announced that the Commission will present its proposal for the next multiannual financial framework in 2011. It is important to mention that the EU institutions are presently negotiating the EU 2011 budget. The Commission has proposed a budget of €142.6 billion in commitments and €130.1 billion in payments. At a time of severe strain on the majority of Member States’ public finances, the Commission proposes an increase of 5.9 percent on the 2010 budget. Whereas the Council wants to cut the Commission’s draft EU budget, the MEPs, unsurprisingly, want to increase it. The Council has recently adopted by QMV its position on the EU draft budget 2011. The Council has agreed to a budget of EUR 141.777 billion in commitment appropriations and EUR 126.527 billion in payment appropriations. Although the Council has reduced the amount of the Commission proposed draft budget there is still an increase of 2.91 percent on the 2010 budget. Obviously, the UK government is against such increase and vote against it. The Lisbon Treaty has changed the budget procedure conferring further powers on the European Parliament. It has abolished the distinction between compulsory and non-compulsory expenditure, hence the Council has no longer the final say on compulsory expenditure (CAP expenditure and funding of international agreements). Consequently, the European Parliament is on equal foot with the Council, being able to influence the entire budget. It remains to be seen what will come out from the negotiations.
It is well known that several parts of the EU annual budget represent a substantial waste of taxpayer’s money. Britain is contributing to EU programmes that have no benefit to British people while could have been spending the money in more beneficial things. According to a report published by the Office for Budget Responsibility, the UK’s net expenditure transfers to EU institutions is set to rise from £6.4 billion in 2009/10, to £8.3 billion in 2011/12, to £8.4 billion 2012/13, to £9.4 billion in 2013/14, to £10.3 billion in 2014/15.
Barroso said that he “will be pushing for an ambitious post-2013 budget for Europe.” We can expect very tough negotiations over the EU's next financial perspectives (2014-2020), particularly on the UK rebate and CAP reform. The EU budget commissioner, Janusz Lewandowski, has recently said that "The rebate for Britain has lost its original justification." In 2005, Tony Blair gave up a large part of the UK rebate which, has already cost to the UK economy billions of pounds. Downing Street replied to the Commissioner comments, saying “Without the rebate, the UK’s net contribution as a percentage of national income would be twice as big as France’s, and one and a half times bigger than Germany’s”. It was noted that the UK is paying €38 billion and without the rebate it would have paid €75 billion over 2007 to 2013. Moreover, George Osborne has made clear that the UK is “not going to give way on the abatement [rebate].”
The President of the European Commission also announced plans to “explore new sources of financing for major European infrastructure projects.” In fact, Barroso announced that he “will propose the establishment of EU project bonds, together with the European Investment Bank.” One could wonder which legal basis he would use. Such idea has been rejected by the UK, Germany, and France. As Syed Kamall said "If Barroso gets his way the EU will have the power to raise its own taxes and sell debt. It is hard to say how this is anything but a big step towards a federal Europe. Governments should have the power to raise taxes and sell debt, not the EU." This would entail another transfer of national sovereignty.
The Commission is also set to address the Union's system of own resources. According to Barroso “The present system is stretched to its limits – propped up by a byzantine set of corrections.” It should be recall that Janusz Lewandowski, has been considering the idea of an EU tax. The Commission is planning to propose taxes on banks, financial transactions, air travel and carbon permits to fund the EU budget. The member states are responsible to taxation policy and Brussels should be kept out of it. The UK must veto such proposals. In fact, Lord Sassoon said "The UK believes that taxation is a matter for member states to determine at a national level and would have a veto over any plans for such taxes."
Barroso has been calling “for Europe to be a global player, a global leader.” He will present together with Ms Ashton, their vision of how Brussels “can maximise Europe's role in the world.” It is important to mention that last July, the General Affairs Council formally adopted a decision establishing the European External Action Service and setting out its organisation and functioning. One could wonder if the European External Action Service would take over Britain’s capacity to promote its own interests in the world would be seriously restricted.
According to Barroso, Brussels is “making progress on a common foreign policy”, however he said “we will not have the weight we need in the world without a common defence policy. I believe now is the moment to address this challenge.” In fact, the Lisbon Treaty has established fundamental principles for further development of the Common Security and Defence Policy (CSDP). The Lisbon Treaty states that the CSDP “will lead to a common defence, when the European Council, acting unanimously, so decides”. Hence, all Member States become committed at the Union level to the goal of a common defence. This amounts a major transfer of power from the Member States to the Union. The Lisbon Treaty also introduced the Permanent Structured Co-operation, a framework by which a group of Member States can decide to build closer relations and co-operation. It is for the Member States who want to be committed to take part in main European military equipment programmes and to provide combat units which are available for immediate action to the Union. The aim is to move forward military and defence integration. It is a step towards a Single European Army. The major innovation in this area is the introduction of a mutual defence clause, thus if one Member State is attacked the others are obliged to provided it with help “aid and assistance by all the means in their power.” This will duplicate NATO´s work.
Barroso also announced that the Commission will present in October a proposal aim at creating “a real European crisis response capacity.” The Lisbon Treaty has created a new legal basis for civil protection which is among the areas where the Member States should have exclusive competence but the Union provides support or co-ordination. However, the absence of legal basis on civil protection has not prevented the Union for taking action. The Community measures in this area have been adopted on the basis of Article 308 TEC (flexibility clause). For instances, a Council Decision of 2001 created the Community Mechanism for Civil Protection aiming at facilitate co-operation in civil protection assistance interventions in the event of major emergencies. It pools the civil protection capabilities of the participating states to ensure better protection in the affected country. It is an old wish of the European Commission to interfere with Member State’s civil protection capabilities as well as coordinate Member States response to a disaster. In fact, even before the signing of the Lisbon Treaty, the European Commission adopted a Communication, whose purpose was “to reinforce the EU’s disaster response capacity.” The Commission has proposed to transform the Monitoring and Information Centre into an operational centre for European civil protection intervention. This move is likely to take away from member states their limited expertise and to duplicate the work of other structures. One could wonder whether the Commission has competence, and expert capability, as well as funds to create an EU crisis response capacity.
