22/11/2010

Looking ahead to 2011
A summary of what to expect for next year

This year

In the last year, the economic and financial crisis has seen the European Union face one of its greatest challenges ever. It highlighted the interdependence of Member States and tested the EU's solidarity like never before. The EU has provided many of the answers needed – on financial assistance to Member States facing exceptional circumstances, on economic governance, on financial regulation, on growth and jobs.
The next year for the European Union seems as challenging as 2010. After the worst crisis of recent decades, the economic recovery is still not yet firmly established. Some Member State economies are still vulnerable due to a high level of budget deficit and state-debt. Though there are clear signs of economic recovery, there is still much to do. For this reason, with a set of initiatives, the Commission will pay further significant attention to accelerating recovery in 2011.

Next year

2011 will be the year when the Europe 2020 strategy is embedded as the backbone of efforts at EU and national level to deliver smart, sustainable and inclusive growth. It should see full agreement on the comprehensive new regulatory framework for the financial sector, the launch of the first European semester of economic policy co-ordination and a series of practical measures to leverage change. By the middle of 2011 the Commission will set out how to gear the EU budget to the delivery of Europe 2020, in its proposals for the next Multiannual Financial Framework of the EU.

For restoring growth and jobs, the EU should strengthen its tools for economic governance and extend them to include the coordination of economic and fiscal policies. The new proposals by the Commission would deliver broader and enhanced surveillance of fiscal policies at EU level, as well as better coordination of macroeconomic policies to address shortcomings in the existing legislation. In the first half of 2011, the European Semester of policy coordination will become the central structure for the EU's common efforts to boost growth and jobs. Early in 2011, the Commission is also expected to table the remaining proposals to complete the financial sector reform.

EU Presidency

In a time of great need for strong leadership, the Hungarian government, with the strongest national Parliamentary legitimacy in the EU, will take over the Presidency of the Council from January 2011. Hungary's priorities were initially to enhance the Eastern Partnership, cultural diversity and water management. At this point, the Hungarian government will inherit a heavy legacy, so Budapest will have to cope with the budgetary and monetary crises prevailing in European countries, the absence of an EU budget for 2011 (for now at least) and revision of the Lisbon Treaty in response to German demands for the creation of a permanent European financial stability mechanism. Besides tackling these current challenges, among the priorities of the Hungarian Presidency, we also find strengthening energy security, promoting regional and cohesion policy, creating the Danube strategy, enhancing enlargement and the creation of an EU-level Roma strategy. This agenda shows a clear consistency with the Commission's work programme for 2011.

In the second half of 2011, another Central European country, Poland will take over the EU Presidency from Hungary, inheriting its achievements and taking up new challenges.

Among the priorities of the Polish government, which mirror those of Hungary, are the internal market, the Eastern Partnership, energy security and developing an external energy policy, the Common Foreign and Security Policy, the EU's 'financial perspectives' and intellectual property.

What about the Budget?

Negotiations on an EU budget for next year ended in stalemate last week. The European Parliament wanted to increase the budget for 2011 by 6 percent, but Member States wanted to limit the increase to 2.9 percent. The Parliament is prepared to accept the compromise if the European Council, representing the Member States, agrees to opening discussions on the EU having its own resources rather than relying solely on contributions from Member States. Unfortunately 3 countries opposed the proposal leaving talks deadlocked. The European Commission now has to draft a new budget, but if it is not adopted by January the EU will have to work with a budget of 1/12 of the 2010 budget each month in 2011 - making it hard to finance the work programme for 2011, especially new projects such as the European External Action Service.

Next steps

The Commission's work programme for 2011 will be presented in the Strasbourg plenary on 23, November, by José Manuel Barroso, President of the European Commission. From the EPP Group, Hungarian MEP József Szájer, Vice-Chairman of the EPP Group responsible for parliamentary work, will make a speech expressing the Group priorities. Discussions are likely to focus on financing the programme following the lack of agreement on next year's budget.