A new package for finance and expenditure in the EU budget. / Benedetto, Giacomo.

PE 646.143 ed. Brussels : European Parliament, 2020. 9 p.

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Abstract

Every time a new multiannual financial framework (MFF) is negotiated, there is a call for the EU to invest in new policies that provide added-value. What would this mean? Firstly, that EU investment is cost effective and that it is cheaper to run a single EU expenditure policy even in a policy such as agriculture than as 27 or 28 different national expenditure polices. Secondly, that there are cross-border benefits, efficiently linking areas of opportunity between the Member States. Erasmus+, Horizon 2020, or the Connecting Europe Framework are examples of this. Thirdly, it is the ability to afford expensive investment in the collective good that any one Member State alone would not be able to afford. Examples include Galileo and the nuclear fusion ITER programme. These three types of added-value are the basis for the case of reform of the budget. They always face challenges from the Member States concerned either to maximise their economic benefit, or to minimise the cost for their Treasuries. Others simply call for a lower budget, even if most of them recognise the collective benefits of added-value. Moreover, some Member States in the face of expenditure reductions, move to salvage their benefits in agricultural or cohesion expenditure. The predictable results in negotiating the MFFs in 2006 and 2013 were somewhat smaller budgets. These contained less of an increase in added-value expenditure than originally proposed, and smaller reductions than anticipated for agricultural and cohesion expenditure, against a backdrop of net balance or juste retour calculations by Member States. The question is how to break this logjam. In 2013, the Parliament accepted a package deal of expenditure reductions in exchange for significantly more flexibility in the budget, a full scale review of the MFF in 2016-17 and the establishment of a High Level Group on Own Resources to investigate new sources of finance for the budget (Benedetto 2019). The flexibility and the mid-term review may have allowed for a larger real terms budget to have taken effect despite the reduction in commitments and payments in the official figures. In turn, the paper will focus on the European Commission’s proposal of 2018 for the new MFF, the challenge of net balances, funds and instruments outside the EU budget, and possible packages for reform.
Original languageEnglish
Place of PublicationBrussels
PublisherEuropean Parliament
Commissioning bodyEuropean Parliament
Number of pages9
EditionPE 646.143
Publication statusPublished - Mar 2020
This open access research output is licenced under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

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