EU spending: Added value through cooperation

  

Does one euro spent at the EU level bring more benefits than if it’s spent at the national or regional level? This is a question that will dominate in the coming months as policymakers try once more to make the case to increase the EU’s own resources and redraft the funding map to boost sustainable growth and jobs.

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Overview

EU leaders for years have tried to put a stop to the sovereign debt crisis that has been tearing apart Europe. They have tightened belts and imposed austerity measures that have cut oxygen to the economic recovery. More recently, they recalibrated, adjusting their rigid strategy to revive growth and boost jobs.

At the same time, the EU has managed to adopt a reduced budget for 2014-2020, set at €960 billion. The agreement on the overall legislative framework allows some flexibility and negotiations will continue to clarify the distribution of funds within each policy.

Meanwhile, there is a clear sense that more work needs to be done on the question of the EU’s self-generated revenue, or own resources. A high-level advisory group appointed by the European Commission, Parliament and Council will undertake a general review of the own-resources system and deliver proposals in time for the adoption of the next budget period starting in 2020.

The added value of the EU budget will feature high in the discussions. Some think tanks have already devised methodologies that would help understand whether one euro spent at the EU level brings more benefits than if it spent at the national or regional level.

The Parliament has also asked for increased scrutiny of spending programmes, well aware that the crisis afflicting the EU today goes beyond the economy, and spreads to a deep legitimacy crisis in which financial accountability plays a prominent role.

Compared to the United States, the EU does much less to assess its legislative performance.

The European Court of Auditors (ECA), the independent EU audit institution, has for years focused much more on the financial and compliance audits, rather than performance reviews that examine the efficiency and effectiveness of the different EU programmes.

Together with better spending, significant savings could also be achieved if the 28 member states were to increase harmonisation in some areas, argue some analysts.

A recent study by the Bertelsmann Foundation found that EU countries could save between €420 million and €1.3 billion annually (between 6% and 19% of total annual spending in all countries combined) if they reduced the number of diplomatic missions and pooled their consular services.

Additional savings could result through harmonised defence cooperation, which will be discussed by EU leaders at their December summit.

“A more intelligent response to the austerity challenge is to look at what we spent in aggregate terms - that is, at both national and EU level - and to explore whether we can have efficiency gains by re-organising spending tasks or better coordinating national and EU spending,” said Eulalia Rubio, a research fellow at Notre Europe, a think tank founded by Jacques Delors.

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Comments

Joe Thorpe's picture

How do you know if the EU is a good spender of money? The accounts haven't been audited in a great many years. the EU cant account for the money that has passed through its hands.

Markus Trilling's picture

... and there is good evidence of EU money well spent, www.wellspent.eu - getting it right for the environment and people!

Joe Thorpe's picture

The EU is a dreadful spender of our money, have you seen the Taj Mahal style projects our money is used to fund? I went to Poland to see how its is being spent there. A fortune is being spread in thick clumps benefiting very few people rather than spreading the sauce around & benefitting the many. They have built a new airport in Gdansk that seemingly has little of no flights during most of the day. Roads are being built that would make countries weep at the specification & cost. I have lived in Ireland for 20 odd years & the money spent on similar projects makes your eyes water. You surely know that by providing wells & irrigation you help African countries to Feed & Educate themselves so they can sustain their own economies. The EU throws money at projects that do none of this, quite the opposite. EU funds are dolled out in conjuncture with states adopting the least best practice for the creation of wealth & sustainability. As every day goes by more & more citizens living in the European Union cannot afford the fuel to get to work or heat their homes.

exquisiteur's picture

Apparently, it was told that each €uro issued, circulates only 3 TIMES / year versus 8 TIMES when spending is in locally printed currency within the eurozone.
Money printing is by nature without bearer name, and without place to be cleared locally as value.

Restrict geographically a currency to a tiny place what will happen to the local economy ? What kind of speculation will arise ?

exquisiteur's picture

Apparently, it was told that each €uro issued, circulates only 3 TIMES / year versus 8 TIMES when spending is in locally printed currency within the eurozone.
Money printing is by nature without bearer name, and without place to be cleared locally as value.

Restrict geographically a currency to a tiny place what will happen to the local economy ? What kind of speculation will arise ?

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