'Keep Europe strong from the inside': Kata Tütto, president of the Committee of the Regions

Talking Europe: Proposed EU Budget & Regional Impact - A Detailed Summary

Key Concepts:

• Cohesion Policy: The EU’s primary strategy for reducing regional inequalities through investment and support for less developed areas.
• European Committee of the Regions: The EU institution representing local and regional authorities, providing a platform for their voices in EU policy-making.
• Mega Fund: The proposed consolidation of EU funds for agriculture, fisheries, and regional development into a single, larger fund.
• Industrial Transition: The shift in economic structures due to technological advancements and changing global markets.
• Demographic Transition: Changes in population size, age structure, and distribution.
• Climate Transition: The move towards a low-carbon economy and sustainable practices.
• Regional Signaling Mechanism: The system within the single market designed to redistribute gains and mitigate losses across different regions.

1. The Proposed Budget & Concerns Over Cohesion Policy

The discussion centers around a proposed EU budget for 2028-2034, totaling €2 trillion. A key element is the creation of a “mega fund” of €865 billion, consolidating funds previously allocated to agriculture, fisheries, and regional development. Katuto, President of the European Committee of the Regions, expresses significant concern that this restructuring will negatively impact “cohesion policy” – the EU’s core mechanism for reducing inequalities between regions. While the overall budget appears substantial, she argues that when compared to the GDP of individual regions (even large ones like Illance), the funding is disproportionately small. Specifically, the seven-year budget is smaller than the annual GDP of a single European region.

2. The Local Perspective & The Need for Funding

Katuto emphasizes that cities and regions are consistently facing more problems than available funding. She highlights that mayors and local leaders across Europe – from Paris to Budapest – are looking to Brussels for support in addressing issues like housing, infrastructure, and economic challenges. The Committee of the Regions represents the voices of these local leaders, who are directly confronted with the practical realities of implementing EU policies. She stresses that the European budget isn’t an addition to national budgets, but rather a collective investment in shared challenges.

3. Multiple Transitions & Growing Instability

A central argument is that Europe is currently undergoing multiple simultaneous transitions: industrial, demographic, climate, technological, and a broader shift in the global order. This period of rapid change is creating anxiety and instability, leading to a tendency to prioritize short-term solutions over long-term investments. Katuto warns that in times of crisis, funding is often diverted from long-term goals like climate change mitigation to immediate needs, creating a “tunnel vision” and a centralization of power. This shift is exacerbated by a perceived need for increased defense spending.

4. Defense vs. Internal Security: A Holistic View

Ursula von der Leyen, President of the European Commission, is presented as advocating for a budget that prioritizes defense and security in response to current global threats. Katuto acknowledges the necessity of strengthening Europe’s external defenses but argues that security is not solely a military matter. She defines security holistically, encompassing food security (investing in agriculture), water security, affordable housing, and energy independence. She points to the lessons learned from the COVID-19 pandemic and supply chain disruptions, emphasizing the importance of internal resilience. Losing international trust necessitates internal self-sufficiency.

5. The Uneven Distribution of Gains & Pain

Katuto argues that while increased defense spending could create regional jobs, the benefits and burdens of economic and political shifts are rarely distributed evenly. She explains that while averages might suggest balance, the “pain” is often localized, while the “gains” are concentrated elsewhere. She stresses the importance of the “regional signaling mechanism” – a core principle of the single market – which aims to reinvest surplus funds to support regions that are negatively impacted by economic changes. This mechanism is crucial for maintaining a cohesive and competitive single market.

6. Hungary’s Situation & The Impact of the Budget

The conversation touches upon Hungary’s current political standing within Europe. Katuto notes that while the Hungarian government may not be directly affected by budget cuts, the cities, regions, and citizens of Hungary will suffer significantly. She emphasizes that a well-developed and integrated Hungary is in the best interest of the European Union as a whole. She states that Hungary is already suffering from the potential impacts of the proposed budget.

7. Desired Changes & The Future of Cohesion Policy

Katuto expresses hope that the final budget will maintain a strong regional focus and preserve the reinvestment mechanism that supports cohesion policy. She advocates for a European approach to addressing shocks and sharing gains, ensuring that all regions benefit from the single market. She specifically wants to ensure cohesion policy remains a European initiative, not one dictated by individual member states.

8. Notable Quote:

“When a time of growing uncertainty and instability you need to add in stabilizing tools and that is cohesion policy. It is the tool that you inject in the system and it gives you a long-term base stability and it anchors local money and local attention into long-term goals.” – Katuto, President of the European Committee of the Regions.

Conclusion:

The proposed EU budget represents a potential turning point for Europe, with significant implications for regional development and cohesion. Katuto’s perspective highlights the critical need to balance external security concerns with internal stability and long-term investments. She argues that a truly secure Europe requires not only strong defenses but also thriving, equitable regions, supported by a robust cohesion policy. The debate underscores the tension between prioritizing immediate crises and investing in the foundations of a sustainable and inclusive future for all European citizens.