Putting Europe into the EU Budget

Most independent observers agree that the European Union’s budget no longer reflects its main tasks and policy goals. Aid to agriculture, a declining sector, consumes over 40% of spending and little is spent on the future (R&D) or on fields in which the EU must assume new responsibilities, such as internal and external security.

Moreover, contributions from national budgets constitute the vast majority of revenues. Member state governments consider these revenues “their money” and compare them to “their receipts.” Thus, EU budget negotiations are framed exclusively in terms of what national treasuries have to pay and what farmers and regions at home receive. European citizens have no clear perception of the Union’s total cost and are only interested in preserving transfers in their favor indefinitely.

The increasing detachment of the budget from the Union’s objectives is sustained by decision-making procedures that authorize the European Council, representing member governments, to take all the important decisions according to a rule of unanimity, with the European Parliament and the European Commission confined to a minor role.

Negotiations for the new multi-year fiscal framework for 2007-13, already underway, are not tackling the issue, because the longer-term interests of the EU are absent from the negotiating table. Neither of the two proposals on the table makes sense. The Commission is proposing to increase budgetary appropriations to 1.24% of the EU’s combined gross national income. Without cuts in spending on agriculture, this would increase the national contributions of net payers to unsustainable levels, with scant value added to common policies.