Mr. Tony Murphy:

As I said earlier, there is potential to move some of the money in the Cohesion Fund towards dual-use projects which can then be considered part of defence expenditure. The other big figure mentioned is the €800 billion for defence but this is purely member states' own money and it is voluntary. There is €150 billion for loans and this instrument is called SAFE. If member states provide an action plan on what they will do with it, they can borrow this money. Again, this is different to the other borrowing I mentioned. Basically it is borrowing by a member state which has to be repaid by that member state. The NGEU was for grants so that money is gone.

The other big figure for defence is the €650 billion. It sounds like this money is all there but, in fact, it is not. This is €650 billion that member states can voluntarily spend on defence without having problems with their deficits. They would be allowed to have an additional increase in their deficit of 1.5% if they spend their own money. The €800 billion is not EU money at all. There is €150 billion that is borrowed by the EU but on behalf of member states.

There are several issues. The current MFF talks about redirecting money to dual use projects. In the new MFF there is a figure for defence expenditure. As I said earlier, we have one cake if we have €2 trillion and we want to divide it across various policy areas. So far the two areas complaining the most about the new proposed budget are the agricultural sector because it sees it as a potential reduction in its funding, and the regions because of cohesion. Effectively, as I explained earlier, this is a fixed budget. It looks a bit bigger but if we take out the borrowings and repayments it is almost back to what it is now. If we have new priorities such as defence, Ukraine will probably come on the scene, and enlargement is very topical again, then obviously something has to give.