Chapter News

EU budget: how to make it more efficient and flexible

The EU’s budget has been criticised for years for relying too much on member states’ contributions and for being too inflexible when unexpected crises occur. MEPs discussed the issue with their national counterparts during a conference on how to finance the EU’s budget on 7-8 September. Most panellists agreed that a reform was necessary to ensure more transparency and efficiency.

In 2014 a high-level group on own resources was created to come up with solutions for the future financing of the EU by December 2016. This was something Parliament pushed for during the negotiations for the EU’s current long-term budget. The group is chaired by former commissioner Mario Monti and its members are appointed by the Parliament, the Council and the Commission
The conference hosted by Parliament in Brussels is an opportunity for MEPs and representatives of national parliaments to express their views on the issue.Their comments will be taken into account by the high-level group when drafting its final report.

Patchwork of exceptions

Speaking at the conference, Belgian MEP Guy Verhofstadt, leader of the ALDE parliamentary group and a member of the high-level group, said the EU’s long-term budget had grown into “an “incomprehensible patchwork of 53 exceptions”.”That’s the reason to stop this crazy game,” he said, “We don’t talk about the EU’s interests any more.” Verhofstadt also noted national parliaments had little control over their governments’ negotiation position.

Former MEP Ivailo Kalfin, who is also a member of the high-level group, said that since the end of the negotiations over the current long-term budget in 2013 a number of crises had emerged that could not be properly addressed. “There is no flexibility at all and this is not a good use of the budget,” he said. 


Joachim Poβ,  a member of the German parliament’s EU affairs committee, highlighted the need for new resources, saying it was a question of political will: “The problems are there. We can either tackle environmental, migration and other issues together or at the national level. However, the nationalist approach will lead us to a blind alley.”

Jörgen Andersson, a member of the SwedishpParliament’s finance committee, said the budget had fuelled euroscepticism. However, his government would be sceptical of proposals removing fiscal competences from national parliaments. Instead, stimulating and promoting growth in the EU would automatically increase the budget and benefit everyone.

Better system needed

The European Parliament has for a long time pushed for an overhaul of how the EU is funded. The objective of the reform is not to increase the level of EU spending, but to avoid that most of it comes from direct contributions by EU countries based on their gross national income. This source was first introduced in the late 1980s as a complementary source of income but has grown to account for about 80% of the budget.

A series of correction mechanisms such as rebates for some member states were also added to the system, which make the overall contribution per member state hard to measure.

Compliments of teh European Parliament