Sunday 4 November 2007

EU reform camp building

The Swedish Institute for European Policy Studies Sieps is looking around for allies for budget reform within the European Union. The annual conference of the Institute, on 26 October 2007, was dedicated to The Purse of the European Union: Setting Priorities for the Future. On Tuesday, 6 November 2007, Sieps and the Centre for European Policy Studies (CEPS) jointly host a seminar The EU Budget Review: Possibilities and Challenges for the Future.

At the Sieps conference Sweden’s EU minister Cecilia Malmström recollected that the current financial perspective of the European Union was a step in the right direction, but it was not far-reaching enough. She stressed the importance of the built-in review mechanism.

According to Malmström, citizens rightly expect the EU to use common funds well and efficiently. The Reform Treaty will lead to major improvements in this respect. The second major tool is a modern budget. The Swedish government believes that substantial reforms of EU spending – including re-prioritisation between areas of expenditure – are needed in order to achieve a budget that can contribute to the EU meeting the challenges of the 21st century.

Subsidiarity, European added value, proportionality and sound financial management are fundamental principles for a reform. The Swedish government has drawn some preliminary conclusions on the direction of the future EU policies: competitiveness, justice and home affairs, migration and asylum as well as external action.

The future Common Agricultural Policy (CAP) should be guided by market orientation, consumer demand, environmental concern, deregulation and reduction of budget expenditure.

The European Union could contribute with strategic coordination of regional development in the wealthiest member states, whereas the actual European funding for cohesion policy should be reduced and allocated differently in the future.

An ideal income system based on member state wealth would probably be sustainable, transparent and legitimate, but as long as the EU budget is unreformed, it would lead to disproportionate net contributions. Fair burden-sharing between member states can only be achieved if a new income system is accompanied by spending reforms, Malmström concluded.

Malmström’s speech and presentations by Iain Begg, André Sapir and Göran Färm as well as a recording of the Sieps seminar can be found on the think-tank’s web pages.

Zero-based budgeting

Sieps has initiated a debate on the European Union’s budget review 2008/9 by publishing a discussion paper ”Agenda 2014: A Zero-Base Approach” by Daniel Tarschys.

According to Tarschys zero-based budgeting has been a heavy instrument in annual budget processes, but might suit the multiannual financial framework of the EU.

Research is needed well ahead of the closing stages, when quarrels on burden sharing between member states exclude all other considerations. The European Union has a multitude of aims, but the real high-level priorities of the Union should be sifted out. The efficiency and effectiveness of Union programmes should be analysed, not only historically, but with a view to the future. The starting positions and expectations of member states should be examined. Programmes with diminishing returns still have their beneficiaries and defenders; phasing-out mechanisms and compensation packages should be planned.

The Swedish Institute for European Policy Studies is showing its pro-active stance in putting the crucial questions for the future of the European on its agenda and by its efforts to build coalitions for a reform agenda. The next long term budget (financial perspective) for five or seven years from 2014 is certainly one of these crucial areas of the Union.

To get started

Here, in addition to my previous posts, are a few sources for those who want to know more about EU (budget) reform:

The present long term budget (from 2007 including 2013) of the European Union is a good starting point: ”New budget, old dilemmas” by Iain Begg and Friedrich Heinemann.

If you want to reflect on a better budget for the EU, there is no turning back from the Common Agricultural Pollicy (CAP), still the biggest area of outlay in 2007. ”Why Europe deserves a better farm policy” by Jack Thurston presents the fundamental problems.

Iain Begg sorts out the basic budget terms and looks at both the budget review of 2008/9 and the financial perspective starting in 2014 in ”The 2008/9 EU budget review”. Is it possible to find solutions better adapted to the common good?

Ralf Grahn


Swedish Institute for European Policy Studies: The Purse of the European Union: Setting Priorities for the Future; 26 October 2007; presentations by Cecilia Malmström, Iain Begg, André Sapir and Göran Färm; web-tv recording;

Daniel Tarschys: Agenda 2014: A Zero-Base Approach; Swedish Institute for European Policy Studies; October 2007;

Iain Begg & Friedrich Heinemann: New budget, old dilemmas; Centre for European Reform; 22 February 2006;

Jack Thurston: Why Europe deserves a better farm policy; Centre for European Reform; December 2005;

Iain Begg: The 2008/9 EU budget review; EU-Consent EU-budget Working Paper No. 3; March 2007;

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