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Behold the free-spending German

For a guy selling bad news to an uneasy audience, Günther Oettinger was pumped up and surprisingly upbeat.

Oettinger, the EU budget commissioner with a history of uttering gaffes and insults, was the picture of smooth confidence at a high-level conference Monday on the bloc’s next long-term financial plan. In blunt terms, he laid out the challenge posed by Brexit, which will blow a huge hole in the EU’s coffers, and then he made an eloquent case for his proposed combination of spending cuts and increased budget contributions.

In the process, Oettinger offered up a soaring defense of European values and priorities, dished out a crowd-pleasing dig at the strongmen leaders of Turkey, Russia and the United States, and layered in a subtle warning to EU mischief-makers in Warsaw and Budapest.

With his combed-back hair, sharp nose and tight-set eyes giving him the look of an eagle in a business suit, he sidestepped the inevitable, if unfair, stereotype of his German countrymen as severe and austere, and instead spoke out for spending more and smarter.

In essence, he was telling EU leaders they will have to accept cuts to spending programs and dig into their pockets — twice, to fill the hole left by Brexit and to finance new priorities.

Even as he showed off his command of the EU’s finances, he managed a dash of humility, asking his audience of power brokers and policymakers for help as he crafts a budget proposal to be submitted by May. “We need your feedback,” he said, stressing all his proposals were provisional at best. “If you have got some better arguments or ideas, colleagues are certainly ready to listen to them.”

It was a strong performance by the veteran conservative, better known recently for offending gay and Asian people, and who, partly as a result, was not given the vice president’s title that has previously gone with the prestigious portfolio of budget and human resources.

Oettinger’s presentation also contrasted starkly with that of his boss, Commission President Jean-Claude Juncker, who rambled through his remarks in three languages but without one crisp, memorable point.

Budget warning

Taking the lectern from Juncker, Oettinger opened with a disclaimer: A strong budget is crucial but not a cure-all.

“If you want to achieve the future in politics, you have got three instruments,” he said, citing the first two as good communication and strong policymaking.

“The third,” he said, “is money. Being able to finance investment, programs, collecting taxpayers’ money to do it, raising funding, which sets direction. And for that reason, the European budgetary framework for the next decade is just one part of all of this, one part of the range of instruments, the toolbox we have to achieve the future we seek.”

He went on to lay out the challenge in plain terms: The U.K.’s departure will leave a gross annual gap of €12 billion to €13 billion, and even if that gap can be filled, there are huge pressures to increase spending on a wide array of programs.

Oettinger then laid out his plan for tackling the challenge — a mix of cuts and new investments. Those may ultimately prove unrealistic but the commissioner could not be accused of failing to spell out a clear way forward.

While Juncker called broadly for increasing the EU’s long-standing, self-imposed budget limit of roughly 1 percent of economic output, or GDP, Oettinger proposed a specific mix of cuts and increases. He said half of the Brexit hole should be filled by cuts to existing programs, and half should be filled with “fresh money,” mainly increased budget contributions by wealthy EU countries.

As for new spending, he said 20 percent should come from “restructuring” — read: cuts — and 80 percent again from “fresh money,” which could also include new tax revenues in addition to budget payments by member countries.

While he noted that cuts would be painful, Oettinger said that some programs should be sacrosanct, including the Erasmus education program and Horizon 2020 innovation projects, because, he said, “they are about our future.”

Oettinger poked fun at the EU’s bureaucratic budget headings, coded by letters and numbers. “Does somebody even know what they mean? No,” he said, answering his own question. “We need to make the whole thing more readable.”

“If you want to finance what we need for migration by making cuts on cohesion policy, you are going to split the European family. We have enough splits as it is” — Günther Oettinger

In defending cohesion funds that support programs in economically poorer EU countries, Oettinger used Bulgaria as an example of where investments must continue to be made. Without mentioning them by name, his point was a warning to Poland and Hungary, two countries that have clashed with the Commission on democratic standards and experienced rising standards of living in recent years.

The message: Cohesion funds should benefit countries where people are truly struggling, not those already well on the path to middle-class standards.

Unity challenge

Oettinger also put a premium on maintaining unity among the EU 27, and he repeatedly stressed how hard it would be to unite all 27 in support of a budget compromise.

“If you want to finance what we need for migration by making cuts on cohesion policy, you are going to split the European family,” he said. “We have enough splits as it is. We need to be more intelligent. We can make reasonable cuts to cohesion policy, 5 to 10 percent, but at the same time we need new money to deal with migration by funding our borders.”

He suggested reaching a budget deal would show up some of the world’s strongmen.

“Once the Brits have sadly left us, then I think it will be a sign of good governance and ability to act in Europe to do this, and we can surprise the external world where we see people like Trump, and Erdoğan and Putin,” he said. “We are capable of operating on a democratic basis and achieving unanimity but that will depend on everybody participating, remaining open and being ready to strike compromises somewhere in the middle.”

Oettinger’s mantra, if there was one, was about adding value | John Thys/AFP via Getty Images

His message was reinforced by German Foreign Minister Sigmar Gabriel, who also gave a speech at the conference, in which he said EU countries should not think of themselves as net contributors or net recipients but as “net winners.”

Oettinger’s mantra, if there was one, was about adding value. It was a talking point that Juncker also hit upon, as did other Commission officials who spoke at the conference. But Oettinger was the one who summed it up best.

“Security, economic strength, competitiveness, solidarity and sustainability with added value,” he said, summarizing his message. “We only want to invest euros if we can demonstrate there is added value and we want member states then to give us those euros so we can deliver that added value in the interest of better, more efficient European policies.”

Florian Eder contributed reporting.

Original Article

Politico

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