26th Oct 2016


EU budget: Don't cut the left arm to save the right

  • The European Parliament can still veto a deal on the seven-year EU budget (Photo: Images_of_Money)

EU heads of state and government will congregate for their extraordinary EU summit in Brussels Thursday evening (22 November).

But the biggest losers of the power struggle on the Union's budget for 2014 to 2020 known as the "multi-annual financial framework" (MFF) are already certain: the European citizens.

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Promoting the argument of the general spending squeeze, big players in the European Council will almost exclusively focus on cutting EU's allocations aimed at stimulating growth and jobs across the Union.

Given that 94 cents of every euro spent by Brussels flow back to Europe's regions, allowing local communities to upgrade transport links, invest in new technologies, and regenerate city centres, cutting the EU budget can be seen as cutting off the left arm in order to save the right.

Regardless of the detailed outcome on the actual figures, member states' rhetoric suggests that they will be unlikely to find a solution which improves both the transparency and the flexibility of the EU's long-term budget.

Moreover, the zero-sum infighting over money, dividing member states into winners and losers without a clear focus on the actual financing needs, will once again take place.

The current - and parallel - negotiations on the 2013 EU budget illustrate this clearly: member states are always keen to come up with EU projects if they are high up on their own national agenda. Yet, when it comes to financing the commitments, they are reluctant to foot the bill, leaving little or no flexibility for short-term spending adjustments.

Worse still, having 27 member states argue over billions of euros in the early hours of the morning, with each national leader having to present at least a shred of victory to his national media, is an open invitation to a deal achieved through pork-barrel politics.

The current procedure centred on haggling over national envelopes also thwarts an allocation of money to where it is most needed. The solution would be to replace national gross income-based contributions and the linked rebates and correction mechanisms by real and viable own-resources for the EU budget.

The system would then not only become simpler and more transparent, but also fairer without putting an extra burden on citizens. Revolutionary? Hardly. The EU treaties actually foresee the financing of the EU's budget largely out of a share of taxes raised at national level.

The European Parliament has made it clear - by a broad majority comprising all major political groups - that it will slam the brakes on member states' attempts to once again resort to a behind-the-doors deal which does not serve the interest of the European citizens.

We need to go back to the future, allowing for a budget that is well equipped to tackle future-challenges, flexible to react to unforeseen needs, and above all transparent. That's the real debate which will start once the mist of the budget battle lifts over the Council building.

Agreement or no agreement at this week's Council: in any case, the European Parliament will get the final say over the MFF. It will push hard to put the interests of Europe's citizens back into the game.

Joseph Daul is chairman of the European People's Party group in the European Parliament. Reimer Boege is the Parliament's chief negotiator on the multi-annual budget.


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