Mr. Günther Oettinger:

I thank the Chairman and members for inviting me and offering me and my colleagues the opportunity to have an exchange of views on the European Union's finances post-2020. We are preparing the next financial framework which will accompany the European Commission's proposals in May in respect of the financial outlook and financial framework for the period 2021 to the end of 2027.

The reason I am travelling to the capitals of all member states to meet the governments and the parliaments is to understand the expectations of our national colleagues in respect of responsibilities which we all see as European responsibilities. Related to and compared with the existing method, we see that there are new responsibilities in dealing with issues such as migration, the provision of development aid in Africa and the refugee crisis in the Middle East such that border protection and control and defence and defence research could be as important as the fight against terrorism.

In parallel, we have the ongoing traditional responsibilities arising from the treaty covering areas such as cohesion policies and the Common Agricultural Policy. We have two problems in that regard. We have a problem on the revenue side because the United Kingdom is leaving the European Union. After the transition phase, we will be at the loss of its input of between €12 billion and €14 billion.

On the expenditure side, it is up to the European Council and the European Parliament to decide. If we see added value in investing or moderating and working together at European level to fight against terrorism or resolve migration issues and so, we will need the money to finance the investment via our European programmes in the next decade.

We are undertaking spending reviews, with a view to modernising existing programmes and the way to simplify the rules. We have to examine which cuts would be acceptable. The halving of the gap created by Brexit, in addition to our new responsibilities, means that we will have to accept some cuts, but we will have to avoid damaging traditional programmes. However, member states do not always have the same interests. Some countries suggest that, in the interests of cohesion, we should invest more in agricultural policies, whereas others say a reduction of 30% in this area could be acceptable.

We have a budget ceiling or dimension which, in general, under the existing framework, year by year, is approximately 1% of gross national income. It is crystal clear that if this ceiling is prolonged and remains at the same level, we will have no chance of closing the gap due to Brexit and financing the meeting of new responsibilities. In my view, the ceiling should be a little higher and the formula should be set at 1/x%. This is necessary. Investing at European level means that we realise added value. We have to bring clear arguments and proof that we will create added value by investing at European level. If there is to be added value, we will need the money. This is about the national budget and new resources and we have a window for negotiations.

The Commission's document will come out in May and the European elections will be held by the end of May 2019. Therefore, the earlier we negotiate the better for farmers, researchers, regions and all of our partners. We would then have clarity and certainty about the available funding and the programmes and rules that would apply to the financial framework post-2020.

The question I address to members of the committee is what do they expect from the European Union because at the end of the day it is about unanimity? We need 27 Finance Ministers, 27 Ministers at the General Affairs Council, 27 Heads of State and Government and 27 national parliaments to agree. It is not the Commission's annual financial framework but our common framework. It is a framework for 440 million citizens, 27 member states and the future of the European Union.