The great paradox. Is it too early to start talking about the EU's next budget? Not at all, because the new multi-annual “Financial Perspectives” ( as the EU's five-year budget is known) will start with the budget for the 2014 financial year and determine precisely what the EU will be able to do in practice. An initial draft prepared by the European Commission wanted to slash funding for two of the EU's crucial activities - the common agricultural policy and the cohesion policy - in order to free up cash for the mushrooming of new demands (and funding pledges) in areas like R&D, disadvantaged areas, grids and networks, aid for the third world, dealing with illegal immigrants, biodiversity and more besides. All of them are crucial, of course, but at the same time, the EU has to ensure that its member states respect the Stability Pact, which means cutting public spending. Most of the EU budget is public funding from member states' coffers and the member states have to tighten their belts...
Prerequisites. Against this seeming paradox, it is time to start discussing the EU's new Financial Perspectives in a cool and collected manner without banging drums, rabble-rousing or allocating spending to try and buy off sections of public opinion, score political points or court non-EU countries. Europe must not preach austerity to the member states and then go on a spending spree itself. Increased EU spending would be justified if EU investment led to increased efficiency and, at the same time, to rationalisation (in other words, a reduction) in member states' spending. Re-allocating funding from the richest to the poorest countries is vital but there should be closer scrutiny of what is done with economic cohesion funding. In addition, the sourcing of income must be made more European to change the system whereby most of the EU's funding comes from easily identified sections of the member states' budgets, leading to much weeping, wailing and divisions between “net contributors” and the rest.
We await the Commission… The first internal document produced by the European Commission did not meet the above conditions. Changing the cohesion policy so it becomes little more than a shifting of capital from the richest member states to the poorest would kill off the “common European interest” in programme selection, removing the ability to properly scrutinise how the money is used and how successful it is in achieving targets, and ignoring the European grids and networks objectives. Removing aid for agriculture from the CAP and sending it back to the member states would suck the common European marrow from the CAP bones because only the richest member states would be able to provide funding to their farmers and this would result in greater, rather than lesser territorial imbalance.
How can the requirement that member states rein in public spending be reconciled with ensuring the EU has enough cash to meet all the objectives the EU institutions have set themselves - the very EU institutions clamouring so stridently for the member states to cut back? There is no easy answer but we do have to start discussing the matter. The official Commission document is expected to be published in September (the delay gives an indication of the scale of the problems involved).
Two arguments. Meanwhile, I would like to comment on two arguments. The first is made by Alain Lamassoure, chair of the European Parliament's budgetary committee. He says it is not a matter of deciding whether to spend less or spend more but rather a question of spending better. He says something entirely new must be done - dividing up the tasks among the EU's budget and member states' budgets, and this will mean getting national parliaments involved in EU governance. The member states have run out of money but the EU is funded by the member states so it is time for bold, imaginative action, he argues. He describes the current situation as a choppy sea of incertitude with the European summit adopting the 2020 agenda with its six key priorities, but which will have zero credibility if there is no money behind it.
The second argument is put by Tommaso Padoa-Schioppa, president of Notre Europe. He argues that the EU should be a key player (rather than simply coordinator) of policies for which it is given shared responsibility by the EU Treaty (sharing responsibility with the member states in domains like energy, transport, research and the environment) by introducing EU investment programmes and EU public spending because this has been shown to provide true value-added. To do this, the EU will need a more flexible budget with some income coming directly from taxpayers and other income borrowed from the markets. One or two European taxes should be introduced (Padoa-Schioppa suggests a carbon tax and the bank tax currently under discussion).
Pipedreams? Probably. But at least the debate has got off to a good start.
(F.R./transl.fl)