A Better EU Budget

Putting Europe into the EU Budget

Today, the situation has changed in three important respects. EU farm policy has started to be reformed, and its share of the EU budget has fallen from over 60 to 40

Not all member states contribute equally to the EU budget some are net contributors, while others are net beneficiaries. At the end of EU financed investment projects payments for which are agreed and executed in the annual budget framework the money is transferred to the beneficiary.

The situation has highlighted the ambiguity surrounding the EU budget s role in European integration. While all EU leaders have advocated using the budget to stimulate economic growth, little action is being taken.

And 50 percent of the EU budget is going to subsidize agriculture from mountains of stuff that people have overproduced.

To be sure, the EU budget contains flexible instruments, such as the EU Solidarity Fund, which provides emergency assistance after natural disasters. But these tools have not always been used as effectively as possible.

European leaders must therefore substantially increase research funding when the EU budget is next due for revision in 2008 and 2009.

A similar political signal is needed today to overcome EU member states resistance to decisions that advance a common foreign policy. Here, too, the sum needed would probably be rather small compared to the overall EU budget.

This contradiction signals that national interests continue to prevail in EU budget negotiations, which are often exploited for domestic political gain in member states. Unless a mechanism is introduced that facilitates the rapid disbursement of EU funds, thus insulating the budget from destructive politicization, these funds cannot be used to stimulate growth in times of crisis.

The situation screams emergency and has triggered a response by the EU. Most notably, the EU has tripled the budget of Operation Triton, designed to strengthen border security launched an EU wide naval operation against human smugglers and traffickers in the Mediterranean (EUNAVFOR Med) and allocated additional funds to overwhelmed frontline member countries.

Within days of the votes, they failed to agree on the EU budget for 2007 13. French and British leaders engaged in a heated quarrel that derailed the subsequent summit, before Britain assumed the rotating six month EU presidency in July.

In any case, the total EU budget, at around 1 of EU output, is relatively small, and has not changed for more than 30 years. The recalculation simply attempts to achieve a more accurate picture of the EU economy, correcting for activity not officially measured in national accounts, such as charity, drugs, and prostitution.

But the EU budget has already enabled an indirect form of leveraging the European Commission s use of implicit budget guarantees to raise capital on financial markets. These funds are used to provide financial assistance to non eurozone EU countries through the Medium Term Financial Assistance Facility, to eurozone countries through the now expired European Financial Stabilization Mechanism, and to partner third countries.

The EU budget should facilitate such transfers in the eurozone, using structural funds. Tax transfers should also act as an automatic stabilizer in the case of asymmetric shocks.

Nonetheless, steps can be taken to prevent political deadlock in budget negotiations, while increasing the budget s flexibility so that it can be used to stimulate growth. For example, some leveraging of the budget could be allowed, although this would spark controversy, given that EU treaties require that the budget remains balanced at all times.

The 25 Member States of the EU collectively make an important contribution to the Agency's budget and provide a significant proportion of the voluntary contributions to its Technical Cooperation Fund.

Given this looming negotiation between old and new and between rich and poor and because Chirac has no cunning proposal for resurrecting the EU Constitution, he has sought and found a second scapegoat Britain has, for over 20 years, benefited from a large rebate in its outsized contribution to the EU budget.

The EU would invite non EU states to do likewise

Moreover, it would be useful to synchronize budgetary decisions with the Parliament s electoral terms. The EU budget should become a main theme in European Parliament election campaigns, increasing voter interest and thus turnout.

Report of Reuters on September 28 in Brussels The European Union took a non confrontational stance against Italy on Friday after Italy looked down upon EU demands and surprised the market with a massive budget deficit plan. But if Italy stuck to a too bold goal, the EU might take a more radical stance.

The other problem for Europe is a dog that does bark, but for no reason. This is the case of the United Kingdom, which has been asked to pay an additional contribution to the EU budget of about 2 billion ( 2.5 billion, which amounts to a rounding error of the UK s own budget).

EU PROPOSAL

Once again, short term national interests are taking precedence over the need for a forward looking, flexible, and efficient EU budget. The European Parliament, which for the first time must approve the MFF, should use its new found influence to uphold the EU wide public interest and offset the blinkered, vested interests of individual member states.

The EU s role in fostering productivity gains, economic growth, and employment should increase, with as much as a quarter of spending from the EU budget devoted to human capital and research. Research spending should be made more effective by scrapping bureaucratic management by the Commission and Council and opening all national research funds to EU wide competition.

Mr. PAANS (Netherlands), speaking on behalf of the European Union (EU) and of Bulgaria, Romania, Turkey, Croatia, Albania, Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia, Serbia and Montenegro and Norway, referred to the statements made by the EU with regard to the report of the Programme and Budget Committee (PBC) at the Committee's twentieth session.

To help achieve financial viability and sustainability by local police, the EU Police Mission has made progress in developing local capacity in regard to setting salary scales, budget planning for organizational units, revising maintenance costs of premises, rationalization of the use of police equipment, control over inventories and payrolls, and general budget implementation and management.

Blair s EU disaster

Post EU Depression

EU European Union

Europe s banking system already has more than 1 trillion in capital. The addition of 21 billion, in the form of guarantees from the EU budget, is unlikely to have a significant impact on banks willingness to finance investment.

In 2006, the EU established a Globalization Adjustment Fund to cushion those sectors hardest hit by rising imports. Though the Fund initially was allocated only 500 million, a rather modest sum compared to the overall annual EU budget of around 100 billion, its creation was an important signal of the EU s readiness to compensate those who lose out from a common policy.

In a climate of budgetary restraint, it is unsurprising that the European Council agreed earlier this year to reduce the EU budget by 3.4 relative to the 2007 2013 MFF. But, with austerity under fire and EU countries looking to encourage spending, the Council should also consider the budget s shape, ensuring that the MFF does not impede future growth and investment.

Britain s Last EU Straw?

Politicizing EU Competition Policy

Righting the EU Constitution

The EU vs. Democracy

Statement of the EU

Third, member states should not cut the EU budget indiscriminately during negotiations on the Union's long term spending plan for 2014 2020. If we are serious about a master plan for growth, we need to provide the necessary means.

A major task of the Fiscal Council will be to ensure that the consolidated budget of Bosnia and Herzegovina contains enough space to accommodate the funding needs of those institutions crucial to the country's security and its EU aspirations.

The EU does not have a significant budget, and it sets at most a general framework for economic and social rules that vary widely across a large and diverse continent. Success and failure are largely determined at the national level.

In just two years, Greece s budget deficit jumped from 4 of GDP to 13 . Now other European Union countries seem under threat, and the EU and the International Monetary Fund are grappling to stem the crisis before another nation trembles.

The Challenges Of EU Enlargement

26 http europa eu un.org.

The regular budget and the project budget together comprise the total budget volume for 2006 2007.