Debate contributions by Johan VAN OVERTVELDT

Mr President, Commissioner, ladies and gentlemen, just ten days ago we reached an agreement with the Council and the Commission on the EU budget for 2026. This budget, amounting to around €190 billion in commitments per year, aims to focus resources on today's biggest challenges. We are investing in our defensive preparedness, in the security of our external borders and in strengthening our competitiveness. Through the European Defence Fund and military mobility, we are increasing our defence capabilities. Migration management and border surveillance are further strengthened and key areas such as research, innovation and, not to mention, our energy and transport networks are also not forgotten in this exercise. In short, it is a budget that wants to invest in the security and prosperity of our citizens. These positive preliminary remarks do not detract from the fact that the EU budget is outdated and not sufficiently forward-looking. It relies too heavily on choices from the past and leaves too little room for the future. This hypothesizes the efforts we need to make to cope with the massive challenges of our time. Or rather, to be prepared and not to keep going after the facts. This is precisely why the next MFF should be the tipping point. It is the opportunity to finally really reform the European budget. In concrete terms, this means: focus even more on areas where Europe can provide clear added value – I am thinking of research, innovation, cross-border infrastructure – and shift resources towards the core tasks of a Union that needs to mature geopolitically: defence, migration, security. The OECD also stresses the need for the EU and its Member States to reallocate their spending, and for cohesion and agricultural funds to be used in a more targeted and efficient way. A crucial step towards a truly efficient budget is to reduce fragmentation. This is true in many areas, but also, and above all, in the organisation of our defence industry. Today, the 26 countries of the European Defence Agency together use 178 different weapons systems. For comparison: The United States has about 30. This fragmentation means double capacities, less economies of scale and a loss of scarce resources. Programmes such as the European Defence Fund are already taking steps in the right direction. They stimulate collaboration and reduce costs. But all Member States, including smaller ones and their businesses, must be able to join. This is the only way to build a strong European defence pillar that protects everyone. However, an effective budget is not just about money. It is mainly about better use of the available resources. Too often the Union falls into the reflex that any problem can be solved by throwing more money at it. But without real reforms, there will be far too little change. Efficiency gains are possible and often spectacularly effective by simplifying rules, reducing administrative burdens and modernising our structures. These include completing the internal market, removing barriers to services, innovation and entrepreneurship. This would trigger an economic dynamism that no budget line could match. Or think of building a real capital markets union that gives our companies access to the finance they need to grow and truly participate on a global scale. When we automatically ask for more money with each new budget round, we postpone the necessary choices for us. We need to modernise, prioritize, dare to delete where programmes overlap or are obsolete, and certainly also make room for new initiatives. The agreement on the budget for 2026 is a necessary step to make this Union work in very turbulent times. Fundamental interventions are more than necessary today, especially now that we are indeed in a precarious geopolitical situation. The United States, our traditional ally, is showing an unhealthy capriciousness. And China would very much like to literally hug us to death, with all the harmful economic and social consequences that this entails. But let this also be an incentive to look beyond the figures of this one year. Let's prepare our finances for the future. Above all, let's realize that money alone is not enough. Reform is the key to greater effectiveness, efficiency, strategic autonomy and prosperity.

Mr President, Commissioner, President, ladies and gentlemen, reports such as those of the European Court of Auditors, like those of, for example, the European Public Prosecutor's Office, are not non-committal piles of paper. The work of these independent control bodies is, in my opinion, too often under-exposed and, unfortunately, too often unanswered. In its report, the Court of Auditors again clearly states that, in particular, the nature and expenditure of the Corona Fund, the RRF, are sometimes problematic. The audits revealed cases where milestones and objectives linked to payments were not properly fulfilled. Cases of double funding were also identified, for example. The Court also notes weaknesses in the Commission’s ex ante assessments. I therefore fully support the Commission's call. Such instruments should only be used where funding is directly linked to measurable results. In this respect, the RRF is not an example for the preparation of the next MFF. There needs to be a much stronger focus on performance measurement, transparency and accountability.

Mr President, Commissioner, ladies and gentlemen, it goes without saying that the brutal attacks on Ukraine, and indeed on our Western freedoms and values, must not go unpunished. We must continue to target the Russian regime through targeted sanctions where it hurts and fully and resolutely support Ukraine and its society. As far as the use of frozen funds for a repair loan is concerned, I would like to call for some caution. Such an operation, an unprecedented one, involves legal, financial and institutional risks, which we must recognise as such. It is not about a mountain of money that is ready and that we can just grab. There must be firm assurances about any legal and financial consequences and how certain risks will be borne. I am not only talking about the position of my home country, but also about frozen assets that are located in other countries and about which there is little transparency. Nor can it be the intention that certain financial institutions or, by extension, the financial fabric in Europe would be endangered by a rash action without a clear legal basis. The nature and scope of this operation calls for a maximum of guarantees. Our full support for Ukraine is self-evident, but that goodwill is not a liberator for measures that can have unpleasant economic and financial consequences for the entire European economy.

Mr President, Commissioner, ladies and gentlemen, we are facing a major exercise, as it is clear that the current MFF framework does not address contemporary needs and challenges. We are therefore looking forward to the proposals that the Commission will put forward next week. As Mario Draghi has clearly explained: Common debt is not the first priority. What Europe urgently needs are structural reforms with a fully-fledged Capital Markets Union as a priority and strong incentives for innovation and entrepreneurship. It is an illusion that all our structural problems can be solved by simply throwing money at them. On the contrary, this philosophy often increases the problems. More resources without reforms lead to stagnation, not progress. What concerns our citizens the most today and where the European Union can undoubtedly offer great added value are defence and migration. It is therefore two areas that should be at the heart of the new MFF and this requires a thorough, critical evaluation of the full range of existing programmes. We need investment, but especially private sector investment. It is therefore our job to create the conditions to trigger these investments. Finally, and this is also very much emphasised in the Draghi report - we need thoughtful deregulation. That's what we need to grow back.

Mr President, Commissioner, in the midst of an increasingly chaotic and threatening world, we are at a tipping point. The European Union and its Member States have a choice: either we strengthen our defence, our security and our resilience, or our democracy and freedoms will be undermined. He who minimizes this does absolutely no service to European values and gives wind in the sails to the anti-democratic forces, both inside and outside our borders. However, this should not be just about more spending. We need smart, targeted investments in defence, innovation and strategic autonomy. In this context, a strong, structural role of the private sector is of the utmost importance. In this way, we also make the increased defence effort a socio-economic success story. These investments are also absolutely necessary to prevent increased defence spending from being translated into price increases only by the existing defence companies. So let us use this moment to improve and strengthen the European Union in terms of defence, security and resilience, rather than just throwing money at it.

Mr President, we are well ahead of the new MFF and, of course, this should not be yet another purely technical exercise. It is a fundamental choice about the direction that Europe wants to take, where the status quo is really not an option. In terms of budget, the European Union is still too tied to policy choices from the past, to outdated budget lines that lay a mortgage on the future. At the same time, the challenges of today and tomorrow require urgent action. If we want to make room for new priorities, we have to make choices for lean, efficient instruments and targeted investments that provide added value. Of course, we support the already announced emphasis on reforms, investment in competitiveness and a stricter focus on external policy, but this should not be an excuse for an ever-expanding budget. So we look with hope towards modernising the fiscal structure, more flexibility and crisis resilience, and thus also towards the budgetary translation of a convincing geopolitical policy. If we want to strengthen support for the European Union, the Union must become more effective. It is not an institutionally cumbersome mastodon, but a Union that does what is necessary and, above all, realises what it should not do. What our citizens and businesses expect is clear: simplicity, efficiency, security and breathing space. The new MFF is our chance to make that change. Please let us seize that opportunity.

Mr President, Commissioner, ladies and gentlemen, the discussions at the European Council focused on defence and competitiveness. As separate themes, although they are actually inextricably linked. Without security, there is no healthy economy. However, the reverse also applies: Without a healthy economy, a real development of defence worthy of that name is impossible. A strong economy is not an end in itself. It is a prerequisite for prosperity and security. In order to generate much-needed private investment in defence, the competitiveness of European companies needs to be strengthened. This can be done through, as also indicated by the Council, drastic regulatory simplification, reducing energy costs, strengthening the internal market, digitalisation and promoting investment and innovation. I would like to add that a number of burdens, in general and specifically as regards private investment in defence, are best reduced. These private investments are absolutely necessary to avoid a fatal derailment of public finances in a number of European countries.

Mr President, Commissioner, ladies and gentlemen, Russia's brutal attack on Ukraine cannot, of course, go unpunished. It is our duty to frozen assets to use it thoughtfully and strategically to maximise the pressure on Putin. What we cannot and should not do, however, is direct confiscation. And this for at least two reasons. First, if we do that, we will lose a crucial bargaining lever to force Putin to make concessions. Secondly, and more importantly, simply confiscating these resources is in all respects a complex operation with many uncertainties. For example, as to the true origin of the frozen products. There are also many side effects. Such an intervention, an outright confiscation, could, for example, drag Euroclear into a legal swamp, with, I believe, disastrous consequences for our economic and financial stability. Don't let us fall into that trap. Strategic wisdom is just as important as strength and perseverance.

Mr President, the first 100 days of the Commission must of course be a moment of reflection, but more of urgency. The next 100 days are even more important. A war at our borders, disruptions in international trade and a new technology race. More than enough reasons to make ourselves less dependent on external powers. But that requires a fundamental change of direction. In recent years, we have been paralyzed by a dogmatic green agenda that ignored economic reality too much. Our competitiveness needs to be strengthened. There is also a direct link between competitiveness and the urgent need to rebuild defence capabilities. In order to generate the private investment needed for this, we will indeed have to pursue a substantial strengthening of our competitiveness. It is also important that the Commission takes all necessary steps to ensure the necessary coordination between Member States on these defence efforts. Otherwise, this operation, this catch-up operation, becomes a blow in the water.

Mr President, Europe is at a crossroads. The philosophy behind the Green Deal was defensible, but its implementation has put us in trouble. Our productivity is stagnating and our competitiveness is eroding. The Commission is finally acknowledging this. But good intentions will not suffice. Europe is indeed investing in research and development, but it is too fragmented and inefficient. Our companies are lagging behind in investing in high-tech innovation, and start-ups lack support, while bureaucracy and rigid labour markets hinder innovation. Without room for so-called "creative destruction" we will be left behind. A Competitiveness Fund sounds good, but money alone is not the solution. Let us avoid that only vested interests and lobby groups benefit from this. Let's keep the focus on innovative entrepreneurship in a dynamic, competitive market.

And most finally, in English I address myself to the Commissioner with whom we were able to work for five years. We often had discussions, heated discussions, but always in good spirit, and therefore I thank him a lot. And I would like to end with some of the words of my late father, who used to say, trees don't run into each other, but people do. So I hope I have the chance to run into you more frequently also in the past.

Mr President, Commissioner, ladies and gentlemen, the internal market is not just an economic construct. It is the backbone of our European cooperation and enables us to act, invest and innovate freely. We need to further integrate and strengthen that internal market in order to promote economic growth and employment. The Single Market also needs to adapt to modern challenges: the climate challenge, digitalisation and new defence challenges. These challenges are not small in themselves, but new obstacles are also emerging, in particular when Member States re-establish border control, which inevitably risks jeopardising the free movement of goods and services. In order to avoid a slippery slope in this important internal market, we must therefore also work on an efficient asylum and migration policy with strict approval criteria and a rigorous return policy.

Mr President, Commissioner, ladies and gentlemen, the crisis in our automotive sector is actually the canary in the coal mine. The entire European manufacturing industry, which nevertheless remains an indispensable pillar of our prosperity, is in danger of falling into severe thunderstorms. What can we do about it? I see four lines: 1) First of all, let's stop with those dirigist industrial plans that we finance with more and more debt. Let us create a framework within which innovation and private investment can be stimulated; 2) Simplify regulation and make it more market-based. Cut reporting obligations; 3) opt for a sensible amendment of the Green Deal by involving the socio-economic picture more explicitly; and (4) Last but not leastStop unfair competition from China. Import tariffs can be useful in this respect, but at least as useful is the commitment to stricter quality and safety standards.

Mr President, Commissioner, State Secretary, ladies and gentlemen, the rapporteurs have already dealt with the various parts of the budget for the coming year in quite detail and have also given an initial assessment of the Council's position, so I will not go into that further. It is now up to us to take responsibility with a responsible budget that proves that targeted European spending does have an added value in terms of our citizens and their prosperity. I am not telling you anything new when I say that the environment we are in is unfortunately what it is and threatens to deteriorate rather than improve. Of course, we cannot ignore the Draghi report, which imposes an impressive competitiveness agenda and talks about investment needs on an annual basis of 700 to 800 billion, and this for the further roll-out of the already agreed EU objectives. Anyone who is familiar with the budgetary situation of the Member States and knows how European compromises are reached knows that such an effort will not be possible immediately. I therefore challenge you all to leave the fixation on these figures behind and look at what we can do immediately to improve the quality of the current regulations and of the spending flow. One of the most notable passages in the Draghi report is the one where he notes that Europe issues four times as many regulations as the United States. That is, of course, pure madness. This regulatory burden and the associated reporting obligations completely undermine the investment climate. I hope we all become convinced that what we decide or do here in the European institutions – Commission, Council and Parliament – will never succeed in bringing about that flow of investment until we succeed in mobilising private investment. We will therefore have to take responsibility at the budgetary level and increase the profitability of private investment. That also means a considerable responsibility for the individual Member States, because a number of responsibilities are still there. But if we really mean it with serious budgets and progress for our citizens, then we cannot ignore it. I will conclude: what the European Union needs to do at the moment is to try to ensure stability across policy areas, from protecting purchasing power to attracting and retaining, as has already been said, investment.

Mr President, Mario Draghi's report provides some interesting insights and objectiveises bottlenecks that we already knew were bothering us. One of the most striking and certainly problematic findings is that, on average, the European Union devises and imposes four times more rules than the United States. That's pure madness. This regulatory burden and the reporting obligations completely undermine the investment climate. More and more companies, especially large ones, are removing the EU from their investment plans. Of course, that's not good. The regulatory burden and reporting obligations should not only be drastically reduced, but also take much more account of the pure profitability of private investment. If this profitability is not significantly increased, the investment boom that Mr Draghi is insisting on will never happen, no matter what we decide as European institutions. Individual Member States also have a considerable responsibility in this regard.

Mr President, we have already debated support for Ukraine on several occasions. I have repeatedly called for continued support and evaluation, and for consideration to be given to how we can make it more efficient. I also believe that adequate control of the use of the funds granted is and remains more necessary than ever. Furthermore, the time has come to evaluate the use of the frozen Russian assets. We need to be more creative and courageous in order to get the most out of it in the interests of Ukrainian society, and by extension also in the interests of the values and freedoms that we share with Ukraine and that are being fought for. Finally, we need to pay more attention Dare to Spend to the fact that countries such as Iran, North Korea and China in particular are very active in supporting Russian aggression. The role played by these countries in the conflict must be reflected more tangibly and directly in our policy towards these countries.