A Federal Budget for the European Youth: Reforming the Multiannual Financial Framework

Submitted by the Political Commission 1 – Institutions and Governance and Political Commission 2 – Internal European Affairs
Adopted by the Congress of JEF Europe in Malta on 12 November 2017. Re-adopted by the online Federal Committee on 5 April 2020

JEF Europe,

  • Recognising the opportunity to reform the Multiannual Financial Framework (MFF) for the upcoming period starting in 2021 in order to effectively respond to common European challenges and provide tangible benefits to the European public;
  • Highlighting the potential of the EU budget to provide public goods to the European public, support the goals associated with EU policies, and to use its tools to carry out macroeconomic stabilisation function in times of economic downturns at the regional and nation-state level;
  • Emphasising the important role fiscal integration has played in political integration projects such as the United States of America;
  • Understanding the importance of regional convergence programmes, and cohesion policy for economic and social development in Europe;
  • Supporting the role EU-funded programmes play in facilitating a European citizenship and sense of belonging through exchange programmes, cultural trainings, improving the quality of education and training, and encouraging intercultural exchange as well as an understanding among Europeans;
  • Drawing attention to the mismatch between the size of the EU’s budget[1] and the potential benefit the EU could provide to its citizens through well-financed tasks that can be better carried out on the EU level in line with the principle of subsidiarity;
  • Taking note of the apparent preference for smaller, ad hoc budgets rather than combined and permanent funds as part of the EU budget;
  • Being concerned by the extensive dependence of the EU budget on GNI-based and VAT-based contributions of Member States, which account for the bulk of the EU budget[2], and their unsustainable and unsteady nature as a source of EU expenditure, exemplified by the exit of the United Kingdom;
  • Welcoming the suggestions on the January 2017 report produced by the high-level group on own resources under the chairmanship of Mario Monti[3] concerning a reform of the revenue side of the budget, the original purpose of the GNI-based contributions’ usage as a residual resource, and on the possible ways of designing genuine own resources;
  • Having considered the European Commission’s reflection paper on the future of EU finances and favouring a scenario of increased focus on European public goods and providing European added value, which would adequately respond to economic, social, environmental and security challenges going forward;
  • Expressing its appreciation for the reflection paper’s suggestion concerning a ‘Child Guarantee’, based on the current ‘Youth Guarantee’;
  • Welcoming the Juncker Commission’s prioritisation of boosting jobs, investments and growth in Europe and the subsequent focus on the budget subheading ’Competitiveness for growth and jobs’, exemplified – among others – through the increase in size and extension in duration of the European Fund for Strategic Investment (EFSI);
  • Noting with concern the contradiction between the importance of programmes that are geared towards youth and social policies for the European economy, and at the same time the budget limitations of the aforementioned programmes, with the notable example of the Youth Employment Initiative;
  • Stressing that some EU financed initiatives such as the Rights, Equality and Citizenship Programme contribute to upholding active citizenship and common European values, such as democracy, freedom, the rule of law, fundamental rights, equality, solidarity, sustainability and peace in all Member States;
  • Noting with concern that many citizens are not aware of projects funded by EU funds and their benefits; moreover, noting that many distorted facts on the European budget adversely influence citizens’ opinion about the EU.

1. Calls for a reform of the MFF and the EU budget by balancing disparities between EU institutions in the decision-making processes, increasing the EU budget’s financial independence with the creation of own resources, and focusing expenditures on improving the lives of EU citizens;
2. Deplores the European Council’s and the Commission’s respective agendas on drafting and discussing the future MFF which will delay the whole process of approval well into 2019, beyond the next European elections.
3. Calls on the Member States and the Commission to revise their agenda with a view to enabling the current European Parliament to adopt the next MFF and the new programmes before the end of its mandate.

a) Institutional Structure & Decision making :
4. Calls for the MFF to be decided upon through the ordinary legislative procedure as the current unanimous decision in the General Affairs Council grants member states a disproportionate influence over the MFF in comparison to members of the European Parliament;
5. Invites the relevant parties to strengthen the democratic legitimacy of current expenditure and taxation via a reform of the duration of the MFF so as to align it with the five-year mandates of the EU Parliament and the European Commission, while taking into account the necessity of the need for longer-term planning of some programmes like Cohesion Policy and the Common Agricultural Policy;
6. Supports a refocus of the number of different EU funds and integrating them into the EU budget to ensure democratic oversight and auditing of expenditure;
7. Calls for the EU budget to be managed by a European High Authority (HA) for economic and financial affairs in the short term, and by a European Finance Minister in the long term.

b) Future MFF structure & allocation of the budget:
8. Calls for a substantial increase in the size of the EU budget and a diversification of its own resources for tasks that provide, in line with the principle of subsidiarity, an added European value in comparison to any other level of government;
9. Asks for an enhanced prioritisation of improving the employment figures of young Europeans by expanding schemes such as the ‘Employment and Social Innovation Programme’ (EaSI) whose aim is the design and implementation of social reforms at the European, national and local level[4], as well as by increasing the visibility of initiatives that fall under it, such as EURES, the ‘Programme for Employment and Social Solidarity’ and the European Progress Microfinance Facility;
10. Calls for a substantial increase of the Erasmus+ budget by a factor of ten, in order to increase the impact of the programme, to widen its access and its reach to all young people in Europe, including those from a disadvantaged background and from non-EU countries in Europe and the Neighbourhood, and to ensure that new initiatives and programmes are not funded at the expense of the Erasmus+ budget, such as the European Solidarity Corps, thus safeguarding one of the most successful and effective European policies that develops a tangible European identity and tackles youth unemployment calls for the European Solidarity Corps to be included under the successor programme to Erasmus+ in the post-2020 MFF but given its own budget line so as to be clear that no funding diversions to it will take place to the detriment of other components of Erasmus+;
11. Urges Member States to increase their efforts to reduce unemployment, provide higher investment in R&D, and decrease the number of people at risk of poverty and social exclusion through initiatives concerned with the improvement of social policy, such as the Youth Employment Package, which includes the Youth Guarantee and the Youth Employment Initiative, the Quality Framework for Traineeships, and the European Alliance for Traineeships, which comprise a mere 0.76% of the current MFF budget, as well as the Europe 2020 agenda;
12. Stresses the importance of the Cohesion Fund both in assistance to lesser developed countries of EU, as well as in investing in transportation, environment, energy and digital infrastructures within Europe;
13. Emphasises the importance of the European Social Fund which co-funds thousands of projects that help combat various types of discrimination, facilitate social inclusion, and improve education systems and vocational training through increased funding especially for the lesser developed regions of EU; as well as co-funding the Youth Employment Initiative;
14. Calls for making EU-funds conditional on respect of European values as defined in Article 2 TEU/recital N, provided that a mechanism is put in place to objectively determine that a breach of these values has occurred and that the potential withholding of EU-funds ensuing from this conditionality is applied in a proportionate way and proposes that the Commission uses EU funds in a way that favourably targets projects that contribute to promoting European values and unity;
15. Calls on the Commission and the Member States to develop a strategy to make EU funded projects more visible and communicate more clearly the benefits of the EU to citizens.

c) Own resources of the EU:
16. Demands an increase in financial resources at the direct disposal of the EU which are not dependant on the political decisions of Member States as well as the authority for the EU to collect and create new sources of public revenue, subject to democratic legitimation through the Parliament and the Council under the ordinary legislative procedure;
17. Asks for implementation of EU taxes that support policy goals and provide European added value when levied at the European level, such as a Financial Transaction Tax to complement the Capital Markets Union, a Common Consolidated Corporate Tax Base to complement the Single Market, or a Carbon Tax to encourage usage of renewable energy systems, while GNI-based contributions by Member States to the EU budget should remain in place as a buffer in case of unpredictable emergencies;
18. Notes in conclusion that Member States, EU institutions, and civil society need to collaborate in order to create an economically effective and socially inclusive EU budget that will be a stepping stone in achieving a politically united Europe.

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