Committee guide: It's time to rethink the EU budget

Written by Jean Arthuis on 5 April 2017 in Opinion

When considering the future EU budget, we must figure out what kind of EU it is that we want, says Jean Arthuis.

Jean Arthuis | Photo credit: European Parliament audiovisual

Working on budgetary matters is an uphill struggle. Figures never lie and budget experts seldom make friends. At national level, working on budgets means telling the hard truth about what a government can do, shedding some light on the financial state of affairs and, sometimes, taking unpopular decisions.

At European level, the struggle is of a different nature. The EU is expected to respond to unprecedented challenges with a budget that makes up for no more than one per cent of the European GDP. 

Summit after summit, our heads of state entrust the EU with more tasks but fewer resources. They want the end without putting the necessary means at disposal. This is putting the European project's credibility at risk. 


What's more, the European Parliament does not vote on the EU budget's resources - MEPs only have competences over spending. We walk on one leg. To my knowledge, ours must be the first parliament in history that doesn't have a say on taxation. I believe this is one of the reasons why so few citizens can relate to what we do at EU level.

In this context, Parliament's budgets committee does its best, within a very constrained framework.  Our job is to steer the EU paymasters - the member states - in the right direction. Since the beginning of the mandate, we have passed three budgets with a particular emphasis on youth and the challenge of migration.

We have fought the mountain of unpaid bills we inherited from the previous multiannual financial framework(MFF), the EU's seven-year budget. We did our best to preserve future-oriented programmes when member states refused to provide fresh money for the Juncker plan to relaunch investments in Europe.

My feeling is that the EU budget in its current form has run its course. Citizens' expectations are enormous - we have a responsibility to live up to them. Several items will be of particular importance in the second part of this legislature.

The first is the next MFF. Parliament must seize the opportunity to express a vision for the EU and translate this into budgetary terms. The Commission will present its proposal by the end of the year, right in the middle of the Brexit negotiations.

We must ensure these talks do not distract us from what is really important when considering the future EU budget: what kind of EU do we want? Should the EU budget remain a way to redistribute money? Should it act as a multiplier? Should it be used provide economies of scale? Should it become a more agile and reactive budget or should it focus on long-term projects? All these avenues have pros and cons. Could they all be explored? How could they be combined? Our committee will attempt to steer this debate.

We also have a duty to simplify the EU budget. We must streamline the budget's architecture. Because the EU budget is very small and rigid, we react to crises by creating budgetary satellites (trust funds for Syria and Africa, Turkey facility, European fund for strategic investments, etc.) hoping to pull additional resources from member states. 

This trend has gotten out of hand. The EU budget has become even more complex and opaque since most of these budgetary tools escape parliamentary scrutiny - a crucial task for a parliament, especially when it has fewer texts on which to legislate. We also must simplify the EU budget for end-users and beneficiaries.

Currently, rules attached to the EU funds are cumbersome and numerous. We need to change this, but the answer to that question depends on the one raised above: what do we want the EU money to be used for? What do we want the EU to do? Brexit and the departure of a net contributor should also be an opportunity to look into the way the budget is funded. 

Formally the European Parliament does not have a say on the matter but it is thanks to MEPs that a high-level group on the budget resources, chaired by Mario Monti, was created. It was a condition for the previous Parliament to sign up to the current MFF in 2013.

The Monti group presented its recommendations a few months ago. They are both ambitious and realistic. It is now our duty to promote and properly explain these recommendations. 

The Monti report is not about giving more money to the EU, budget but about creating closer EU policies and their stream of revenue. Furthermore, new resources, levied at EU level, would save national coffers money as the EU budget would be less dependent on national contributions. 

Finally, new genuinely European stream of revenues would break 'juste retour' logic by which member states, since Margaret Thatcher's famous "I want my money back", see the budget as a zero-sum game. We have to get these messages across.

Together with the economic and monetary affairs committee, we adopted, on time for the celebration of the anniversary of the treaty of Rome, a report fleshing out what a Eurozone budget could look like.

Parliament's voice should be heard much more on important topics such as the future of the euro. This debate is somehow on hold until the French and the Germans have gone to the polls. Once these two decisive events have taken place, the EU must be ready to act and play its part.


About the author

Jean Arthuis (ALDE, FR) is Chair of Parliament's budgets committee

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