Two important things happened last week in the context of the EU budget. The first is that we finally adopted the EU budget for next year. This means business will now proceed as usual without the complications of starting the new year without a budget.
The second is that, during the EU summit, Prime Minister Lawrence Gonzi rejected the approach by British Prime Minister David Cameron to sign up to the UK’s plan to freeze EU spending between 2014 and 2020. The UK had recently already secured Malta’s support on its call to limit spending for 2011.
But Dr Gonzi resisted the pressure. And he was right to do so for Malta’s interests are markedly different from those of the UK when it comes to the EU budget. Suffice it to say the UK is a net contributor whereas we are net beneficiaries. We could therefore hardly have the same interests. Moreover – and this is putting it diplomatically – our European policy is not necessarily consonant with that of Mr Cameron’s government. And we should have good reason not to go down that path.
Be that as it may, last week’s budget deal now paves the way for the start of the big debate on the long-term financial or budgetary framework of the Union for the years 2014 to 2020. The European Commission will come up with its proposals in six months’ time.
This week I would like to focus on the spending side of the EU budget, that is to say how and on what should EU money be spent.
We already know that, as things stand today, the agricultural sector and EU cohesion (or regional) funding take up some three quarters of the EU budget each year. Will this change in the years to come and if so, how?
Yes, it will change if a discussion paper tabled by the European Commission at the end of October is anything to go by.
In essence, the Commission is proposing to divert EU spending until 2020 largely towards achieving a smart, sustainable and inclusive growth under the so-called Europe 2020 strategy. Under this strategy, there are five main target areas EU countries are expected to pursue. These are clear and easy for all to understand, namely: an increase in the employment rate to at least 75 per cent; an investment of three per cent in research and development; a reduction of greenhouse gas emissions by 20 per cent on the 1990 levels, along with an increase of the share of renewable energy sources to 20 per cent and an increase of energy efficiency also by 20 per cent; a reduction in the rate of early-school leavers to just 10 per cent along with an increase of tertiary education graduates by 40 per cent and a commitment to lift 20 million people out of poverty.
In achieving a “smart” growth, the Commission is proposing to move more cash towards research, innovation and education and keep up investment in infrastructure, especially in transport or energy projects that can physically integrate the European market further.
In achieving a “sustainable” growth, the Commission is proposing to put money into helping us mainstream our energy and climate policies into our economic policies.
All too often, European countries have dragged their feet on making the quantum leap to higher environmental standards because of the high price tag that comes with the necessary investment. It is therefore reasonable to shift EU money to resource efficiency, climate change, energy efficiency, greener technologies and greener services. The Commission is also mooting the idea of setting up a dedicated EU fund for this purpose.
Finally, in achieving an “inclusive” growth, the Commission is proposing to retain the existing cohesion policy that has channelled billions of euros in helping poorer EU regions and countries, including Malta, to catch up with the rest. But, in future, this policy would primarily target the 2020 objectives listed above.
The Commission claims that achieving these targets would add an extra four per cent growth in EU GDP and generate 5.6 million new jobs. So if this EU 2020 strategy is to be translated into concrete deliverables, it seems to me EU spending should indeed be diverted to achieving these targets. And if this happens, then the EU budget should change considerably.
But that is easier said than done.
The extent to which the EU budget will change will depend on the degree of resistance from those member states that have a vested interest in keeping things as they are.
Next week, I will round off my three-week review of the EU budget debate with a look at EU revenue, that is, how – and where – should the EU collect its money.
A merry Christmas to all!
www.simonbusuttil.eu
Dr Busuttil is a Nationalist member of the European Parliament.