A Better EU Budget

BRUSSELS – Stopping Europe’s economic decline and overcoming its competitiveness crisis will require radical solutions. But European Union leaders remain fixated on old priorities – a lack of vision evident in negotiations over the EU’s 2014-2020 Multiannual Financial Framework (MFF).

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.

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.

For example, the proposed budget slashes funding for cross-border infrastructure projects, including the expansion of high-speed broadband networks into rural areas and the development of transport and energy infrastructure. But the EU can add considerable value by coordinating transnational infrastructure projects, thereby achieving economies of scale and avoiding a duplication of national spending. Europeans would benefit directly through improved Internet access, lower energy costs, and more efficient transport links.