The pot of gold at the end of the rainbow

In May 2018, the Multiannual Financial Framework, an important part of the EU budget for the years 2021 to 2027, will be established. President Juncker stressed the importance of such framework in his 2017 State of the Union speech, when he stated that “we have a choice: either we pursue the European Union’s ambitions in the strict framework of the existing budget, or we increase the European Union’s budgetary capacity so that it might better reach its ambitions.” Only a few days ago, Ingeborg Gräßle, a German center-right politician who chairs the Budgetary Control Committee, warned that the EU will adopt a budget that very much looks like the old one – despite the clear objective of reform. Why would we care?

What does this specific budget look like?

In a DDR-like fashion, the EU establishes its long-term budget for six years. This budget needs unanimous consent from both the EU Member States and the European Parliament (EP). The European Commission (EC) tries to influence the budget by proposing one in the first place and hoping (and lobbying) for its approval. The money from the budget is spent on several aspects of EU life. According to the EU’s own website, only 6% of this budget is spent on administration while the rest flows to citizens, regions, cities, farmers, and businesses. Examples of specific projects are Horizon 2020 and funds for several institutions such as the European Social Fund and the European Regional Development Fund.

Why does this matter?

The budget matters because it is the pot of gold at the end of the rainbow. This rainbow is the path towards it and it is paved with negotiations within the EP, consultations of important stakeholders (including the private sector), exerted influence of the EC, and input from individual Member States. Failing to agree to this budget in due time leads to the drying up of funds and a temporary hold of several EU programs.

Budget Commissioner Günther Oettinger will unveil the 2021 to 2027 proposal next week, which has several people worried. This budget was supposed to be different and also a tool for internal alignment. This means that the amount of money a Member State would receive from the budget is closely linked to the extent to which it abides EU values, such as the rule of law. Thus, bullies such as Poland and Hungary would not get as much from the budget, whereas posterchild Member States such as Sweden would.

Therefore, the budget is not only about improving infrastructure or creating an economy that is future-proof, it is also about educating the Member States on how to behave. Simultaneously, the budget could be used to get Member States aboard on several projects and it could send a message to MEPs, since some of them are filling their pockets without any substantial result for the peoples of Europe.

Another setback for the EU?

Yet, all good intentions and great ambitions aside, the budget is looking to be the same old thing. Since receiver countries, such as Poland and Hungary, have majorities on the important committees for the budget approval, there is almost no chance that the reforms in the budget will come through. Other Member States will not budge either, as most of them have no long-lost love with the EU and won’t be eager to help the Union scrape together its budget. But even within the EP there is no intention of reform. One example is that the EU’s agricultural policy, which is part of this budget, would be altered by proposing caps on large farms. However, the EP rejected this proposal, indicating that it is in no mood to change things.

The pot of gold is getting closer, but the necessary changes will probably not be implemented. MEPs fighting for the cause will be left in the cold, Member States disrespecting EU values will not be punished, and we’ll be stuck with this budget until 2027.

Author: Koen Durlinger

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