Oireachtas Joint and Select Committees

Tuesday, 12 June 2018

Joint Oireachtas Committee on European Union Affairs

Multi-Annual Financial Framework after 2020: European Commission

12:00 pm

Ms Jennifer Brown:

I thank members for the questions and I hope I will manage to address all of their remarks.

There are a couple of overarching issues which are important to recall. One is that there is a pot. How big it is will ultimately be decided in the negotiations with the member states. It is clear that with the departure of the United Kingdom there will be a gap compared to what we currently fund. Some of that must be filled by making savings and some will be filled by finding additional contributions. The overarching result of that will be subject to the negotiations with member state governments.

With respect to youth employment and other policies, I did not touch on this specifically in my initial remarks but it is a very important part of the Commission's proposal. It is proposed to increase the funding for youth employment by 2.2 times its current total. The youth employment initiative is now integrated into the European Social Fund+ or ESF+, but youth is a very important part of that. There is also an increase for ERASMUS, which is a very significant programme for young people. Investing in people is to the forefront of the ESF+.

On whether some of the programmes will continue, crucially for Ireland the PEACE II programme will continue under the current management system because its importance is very clear. Leader will also continue.

With respect to the structure of the Common Agricultural Policy, CAP, the idea is to allow for increased national co-financing. At face value, EU involvement in CAP will be reduced by 5% because, as I said, there will be one less contributor to the pot. The ultimate overall level of the budget to be agreed by the member states will be affected. Within that, there is a need to ensure that the lowest incomes are supported because it is clear that farm incomes lag behind those in the rest of the economy. The rural community plays a vital role in ensuring not only the continuation of rural communities, but the protection of our environment. The basic elements of the CAP, as a policy that works, will not change. Elements such as basic income support for sustainability, redistribution of income support and support for young farmers will stay. What will change is the delivery mechanism, with more subsidiarity for member states to create strategic plans. There will be more flexibility between the two pillars of the CAP, that is, direct payments and rural development. Member states will also be able to see how they would like to structure the process, which is not currently possible.

With respect to the consequences of Brexit, we are still in the negotiation phase and until we know the final outcome it will be difficult to make pronouncements. A number of mechanisms are built into this proposal, some of which already exist, and we will try to build on them. These will be available to help any member state suffering economic challenges. They include the European Globalisation Adjustment Fund, which has increased to €600 million a year, and InvestEU and the guarantee of loans possible through that.

Food safety remains a very important issue and is now included in the security heading of the budget. On the revenue side, it is important to remember that the Commission proposal concerning the corporate tax base is still under discussion.

It is something that is ultimately decided by unanimity among the member states. First, it must remembered that it is not the rate that is proposed to be harmonised but the base, which would first have to be decided by unanimity. Any legislation related to own resources and the financing of the EU budget is also decided by unanimity. I believe there are a couple of steps that we have to take before this would become part of the financing. Nevertheless and as is the case with the plastics proposal, we try to align our proposals for financing with policies. The best success of the plastics proposal would be that there would be nothing collected because there would be no more plastic waste. What we are trying to do is to align the revenue side of the budget with the expenditure side and protection of the environment is a very clear priority. The difficulty is how to increase the funding for priorities, while maintaining the important policies of the Common Agricultural Policy, CAP, and the policy cohesion which are so important to many member states and have played such a vital role. Again we return to what is our ceiling and what can we do within it and whether can we do more with less, which is a challenge. On the one hand, we have growing priorities, including research, youth, climate change and migration, as well as the traditional priorities. We have to try to match what can be done within the overall availability.

I hope I have addressed everything, but, please, remind me if I have not.