As “old” and “new” Europe over the EU budget clash

Как «старая» и «новая» Европа из-за бюджета ЕС конфликтуют

Premiere 17 EU countries, mainly from Central and Eastern Europe gathered in Prague to jointly confront the plans of Brussels dramatically reduce the cost of “policy of cohesion”

On 5 November at the Prague summit of the “friends of cohesion” — created in 2012, the informal organization least developed countries of the European Union. The name comes from an important part of the activities of the EU — cohesion policy, consisting in overcoming the disparities between the different countries and regions within the Union. Now the group consists of 17 countries of the “Visegrad four” (Hungary, Poland, Slovakia and Czech Republic), other countries, entered in EU after 2004 (Latvia, Lithuania, Estonia, Bulgaria, Romania, Slovenia, Croatia, Cyprus, Malta) and the countries of southern Europe — Greece, Italy, Spain and Portugal. However, leading the party at the summit in Prague was performed by the heads of governments of the Visegrad group (V4), dominated by the Prime Minister of Poland Mateusz Morawiecki.

Morawiecki in Prague stated: Poland, which is economically catching up with the West after the “undeserved post-Communist collapse” must have resources for the development of backward infrastructure, and it is for this are the cohesion funds of the EU. Therefore, the Foundation of a fair transformation of the European Union, according to Moravcova, should be higher than proposed by the European Commission, and this opinion is shared by all States V4.

“We have to convince the rich countries that are more fortunate in history, for example, the Netherlands, Belgium, Denmark, Germany or France — is that this sharing of costs was fair,” — said the Polish Prime Minister. He added that the fair distribution of costs requires the elimination of “discount” when paying contributions to the EU budget, which are regularly provided to countries of “old Europe”. In this regard, according to Moravcova, EU budget loses about 14-15 billion euros.

Morawiecki also stressed that the European Parliament has called several Western European countries “tax havens”, and, according to the European Commission, the budgets of the countries-EU members are losing each year more than 150 billion euros as a result of fraud related to value added tax. The same amount Moravicki resulted in an interview with Polish press Agency the results of the summit in Prague, Recalling similar losses in connection with failure to pay income tax for companies that, they say, and $ 300 billion, that is, the annual EU budget.

Attempts by the Prime Minister of Poland to take other people’s money is clear: in the European Commission’s proposed European Union budget for the 2021-2027 years, the costs of cohesion policy are invited to cut by 37 billion euros, while Poland will be reduced to 19.5 billion (which is 23% less than in the EU budget for 2014-2020). And according to the information of the European Commission, published on 5 November 2019, net budget balance Poland between subsidies from Brussels and contributions to the common Fund of the EU amounted in the years 2014-2018 2.4% of the GDP of this country that has become one of the key components of the “Polish economic miracle”.

And that “wand” if you are not going to take the radically shortened. But apart from that, in Poland, are expected problem with another important component of economic recovery the influx of cheap labor from Ukraine. According to estimates of the National Bank of Poland and Warsaw school of Economics, Ukrainian migrant workers in 2014-2018 ensured Poland’s GDP growth at 2.5% — that is even more than EU subsidies. However, from 2018 the slowdown in the inflow of the Ukrainian labour force, and with the opening in 2020 of the German labor market, many Ukrainian citizens are planning to move to work there.

And if the Ukrainian workers in the Polish employers try to replace migrant workers from Asia, the money from Brussels to compensate for nothing. Therefore, Mateusz Morawiecki in Prague focused on the fact that the countries of “old Europe” get high dividends from the Central Europe. “Poland along all dividends, including interest on capital, current loans and deposits are about 100 billion zlotys, or more than 20 billion euros,” he said. It is noteworthy that on 5 November in Brussels, this position was supported by the Director of the budget Department of the European Commission Gert-Jan Koopman, saying that the “old” member countries of the EU need to get rid of the “bookkeeping mentality”, because their companies also benefit from funds allocated to cohesion policy in Central and Eastern Eruope — as winners of tenders to use them.

This is also said in comments to the Polish radio, Professor Krzysztof Walecki of the University. cardinal Wyszynski, who said that the money allocated to cohesion policy, mainly returned to the countries paying more into the EU budget, as recipients buy their products and services. Polish scientist has warned that restrictions of the funds of cohesion will lead to an increase in property imbalances, and consequently, the tensions that would tear the European Union apart from the inside.

The same opinion and Prime Ministers of countries of the “friends of cohesion”, in which the joint Declaration adopted at the summit in Prague, said that the cohesion policy is a fundamental investment tool of the EU. They are also urged to allocate to it in 2021-2027 years no less money than in the final budget period. In their view, the “proposal on the reduction of funds could become an obstacle to the achievement of the objectives set out in the EU treaties”. In addition, the heads of government of the seventeen member countries of the EU also demanded the opportunity to “distribute the funds independently in accordance with their domestic or regional priorities”.

However, the problem is not only in the amounts allocated to certain EU programmes, and the adoption of the EU budget in General. As announced on 6 November, the Polish newspaper Dziennik Gazeta Prawna, the risk that the main financial document of the EU will not be adopted in time, is the largest in history, as Germany, the Netherlands, Denmark, Austria and Sweden (net contributors to the EU budget) require even more economic even compared with the above-mentioned proposals of the European Commission. The position of Warsaw weakened by recent Court decisions of the EU about the rule of law in Poland, which can be used in the negotiations on the EU budget supporters of austerity and cuts. “When Poland needs solidarity in the preparation of the EU budget, the other side will argue about the lack of such solidarity in the behavior of the Poland, for example, in relation to the admission of refugees,” the newspaper reports.

In this regard, recall published a little over a year interview of the President of France Emmanuel Macron, addressed to the leaders of the “Visegrad four”, with a warning that Europe is not a supermarket, and the Eastern European States can’t just pick and take out the core values of the unit that they like. “We have a collective need for coherence and solidarity. We are unable to benefit from the European budget, while demonstrating solidarity on migration issues,” — said the French President at the end of October 2018. Since then, the influence of Macron in the European Union only increased, so the fight for the budget between the countries of “old” and “new” Europe at the upcoming EU summit in December 2019 to be a difficult one.Oleg Havich

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