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Reflection Paper On The Future Of EU Finances

Foreword

On 1 March 2017, the European Commission published its White Paper on the Future of Europe as the starting point for an honest and wideranging debate on tomorrow’s Europe. To further contribute to this debate, the Commission is presenting a number of reflection papers on key topics that will shape Europe in the years to come. This paper – the final one in the series – focuses on the finances of a future Europe at 27 in a changing world. It takes into account the ideas presented in the previous four reflection papers. It presents possibilities and reform options, mapping out opportunities, risks and trade-offs for each.

At around 1% of the combined Gross National Income (GNI) of its Member States, the EU budget is relatively small. For every €100 earned, European citizens pay an average of €50 each in taxes and social contributions, only €1 of which goes towards funding the EU budget. For less than the price of a cup of coffee a day, Europeans fund an EU budget that manages a wide range of issues that go beyond national borders and necessitate a European or international response. From climate and energy, to migration, consumer protection, globalisation, employment, the single market and the common currency, the budget contributes to the prosperity of EU citizens and the success of common policies.

Experience has shown that even a modest budget at European level can have a major impact on the ground. Many Europeans have first-hand experience of projects funded by the European Union. Students and young professionals study abroad thanks to the Erasmus programme, farmers receive support from the Common Agricultural Policy, researchers and universities benefit from EU grants to further their work. Thanks to investment under cohesion policy and other instruments, the EU helps countries, regions, and cities to improve the quality of life of their citizens. It invests in public transport, water or digital infrastructure, as well as in the health and education sectors. It supports vocational training, small and medium-sized enterprises and innovation.

At the same time, a variety of new challenges have arisen since the current budget was designed. The refugee crisis, security concerns, cyber-threats and terrorism as well as defence require panEuropean responses. The pressure created by these competing demands on finite resources has underscored the urgent need to reflect on what kind of budget is needed for the Europe of the future. The withdrawal of the United Kingdom will signify the loss of an important partner and contributor to the financing of EU policies and programmes. However, it also presents an opportunity for a vital discussion about the modernisation of the EU Budget. At the heart of this debate are some fundamental and inter-related questions: What should the EU budget be used for? How can we make the very most of every euro to ensure that EU spending delivers tangible results for its citizens? What can spending at EU level achieve that spending at national level cannot?

How can policies and programmes be made simpler and more transparent? And now is also the time to ask how the EU budget should be financed to ensure it has the resources it needs to meet the expectations of Europeans. Economic strength, sustainability, solidarity and security must be the focal points for the EU finances of the future. And while we know that the EU budget cannot do everything on its own, a welldesigned budget focused squarely on supporting those priorities can make a real difference to people’s lives and help restore trust in the EU’s added-value. Our reflection paper focusses on all those issues. For tomorrow’s Europe and each of its citizens.

Compliments of the European Commission. Read the full reflection paper here.