Authors Iain Begg | Gabriel GlÃ¶ckler | Anke Hassel ... - The Europaeum

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(GNI), the interests of the member states are so divergent, that negotiation exhaustion frequently sets in before changes can be agreed. Some critics argue that the size of the European Union budget is simply too small for its ambitions of political union. However in the middle of the greatest financial crisis since the Second World War, this particular criticism has largely been put on ice. The characteristics of the EU budget The European Union budget, unlike the budgets of its member states, cannot project either deficits or surpluses; budget revenue is raised simply to equal budgetary expenditure. Even investments are treated as current expenditure, which has to be met by own resources. The only budget recognised by the current treaties is the annual budget. However, the annual budget has to conform to the medium-term financial perspective, which is usually decided for a period of seven years. The financial perspective therefore establishes a degree of financial discipline in the annual budgets, because, unlike many national medium-term financial plans, it creates legally agreed ceilings for the different categories of expenditure which are identified. While the negotiation of each financial perspective takes around two years and is accompanied by loud contestation between member states, its existence appears to have made the agreement of annual budgets a rather smooth operation. Institutionally the financial perspective and the annual budgets are dealt with in radically different procedures. The financial perspective is decided unanimously by the Council. The European Parliament always tries to influence the decisions on the financial perspective but in the past it has had little impact. However the implementation of the financial perspective is governed by an inter-institutional agreement through which the Parliament, the Council, and the Commission agree on the rules of its operation. The annual budget is proposed by the Commission and then passed to both the Council and the Parliament, with the Parliament having the decisive vote on non-obligatory expenditure and the Council on obligatory expenditure (expenditure on the CAP, on international agreements and pensions). The EP’s role in the approval of the annual budget is one of its most important powers in the Union’s institutional arrangements. Ratification of the Lisbon Treaty would increase the power of the Parliament both through the abolition of the distinction between obligatory and non-obligatory expenditure, and through the requirement 64 After the crisis: A new socio-economic settlement for the EU
that the Council obtains the consent of the Parliament for the approval of the financial perspective. The overall limit to the size of the budget is decided by unanimity in the Council, without the participation of the other Community institutions. The current limit is 1.24% of the Union’s GNI. However the present size of the budget, in payment appropriations, is less than 1% of GNI (0.89% in 2009), leaving a considerable amount of head-room below the own resources limit. In fact the annual budget has declined in size as a proportion of GNI since 1993 when it was 1.21%, and actual spending has been considerably lower than that foreseen by the annual budgets. In nominal terms of course there has been a steady increase in the size of annual budgets, reaching €134 billion in 2009 (commitment appropriations). The EU budget is therefore at the same time small in relation to public spending in the Union (approximately 2%) but quite substantial in nominal terms. The resources required to implement the agreed expenditure, so-called “own resources”, consist mainly of transfers from the member states based on the size of their gross national incomes. Traditional own resources, that is to say customs duties and certain agricultural duties as well as the VAT- based own resource, now account for only 33% of the required resources, the remainder coming from the GNI-based resource. Thus only a relatively small proportion of the resources needed to meet planned expenditure come automatically to the Union and are therefore “own resources” in the strict sense. The current structure of the EU budget Expenditure It is a well-known fact that, however the budget figures are presented, around 80% of the budgetary funds go to finance agricultural spending and cohesion policy. In the 2009 budget, agriculture, fisheries and rural development accounted for 42% of commitment appropriations. Cohesion policy amounted to a further 36%. It is certainly true that the Union has made an attempt to reduce spending on the Common Agricultural Policy over several years. In the 2008 budget for instance narrow agricultural expenditure was the only major budget line to decrease over the previous year. Indeed, expenditure on agriculture in the current financial framework is expected to increase in nominal Chapter 4 – Alan Mayhew 65
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Authors Iain Begg | Gabriel Glöckl
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Published in 2009 by Policy Network
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4 After the crisis: A new socio-eco
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6 After the crisis: A new socio-eco
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Simona Milio is associate director
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Chapter 10 Simona Milio ...........
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Before the crash: the EU as a parti
Page 16 and 17: liberalisation. The City of London
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Page 20 and 21: confidence and world trade, to whic
Page 22 and 23: following the ECJ’s controversial
Page 24 and 25: signals are in place to promote a n
Page 26 and 27: need to be constructed to create ac
Page 28 and 29: or indeed re-impose, what they rega
Page 30 and 31: Markets with rules The overall conc
Page 32 and 33: 30 After the crisis: A new socio-ec
Page 34 and 35: Target financial stability The EMU
Page 36 and 37: Belgium, the Netherlands and Luxemb
Page 38 and 39: mortgage banks and the insurance se
Page 40 and 41: financial market rules. The ESFS au
Page 42 and 43: prudential regulation - though only
Page 44 and 45: initiatives vis-à-vis ratings agen
Page 48 and 49: Even if membership in a monetary un
Page 50 and 51: emained relatively contained to spe
Page 52 and 53: The second channel of functional sp
Page 54 and 55: But even so, the depth and intensit
Page 56 and 57: governance in the EU and the euro a
Page 58 and 59: in the EU show, authorities at the
Page 60 and 61: factors will remain prevalent and b
Page 62 and 63: centralised decision-maker. Similar
Page 68 and 69: terms only very slowly and as a per
Page 70 and 71: policy proposal asks itself what th
Page 72 and 73: ensure that a ceiling is put on the
Page 74 and 75: Reform of EU expenditure Spending 4
Page 76 and 77: The medium-term financial framework
Page 78 and 79: unanimity. The need to obtain the c
Page 80 and 81: therefore, was weakening the Europe
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Page 84 and 85: Since then, member states have name
Page 86 and 87: in the world monetary system. It al
Page 88 and 89: a Treaty that not only ignores trad
Page 92 and 93: Firstly, they should include policy
Page 94 and 95: emanate from demographic trends. Ho
Page 96 and 97: Furthermore, the Lisbon agenda may
Page 98 and 99: Strengthening, if not really crafti
Page 100 and 101: incentives in the welfare schemes a
Page 102 and 103: security, yet at a lower cost than
Page 104 and 105: 102 After the crisis: A new socio-e
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Page 108 and 109: in an increasingly global age the
Page 110 and 111: So what kind of social role for the
Page 112 and 113: effective common policies in areas
Page 114 and 115: help by ensuring a thorough audit a
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irrespectively of benefit and costs
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to the European Innovation Scoreboa
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flexible labour regulation than cou
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to cope with change is germane to a
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average job tenure figures in the E
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(74), and road vehicles (78). On th
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Towards a less dogmatic approach Wh
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128 After the crisis: A new socio-e
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will be reinforced rather than cont
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Where do we come from? The EU agend
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However, so far the flexicurity app
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existing practices of wage subsidie
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minimum wage tend to have higher pr
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commitment for employment”, 18 un
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provisions for minority protection,
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eflected in the objective of the Li
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instruments have been criticised fo
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However, the countries’ planning
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ich developed country pre-occupatio
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emerging markets (indeed the rules
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Energy and carbon use depend on fou
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concentrate on the size of the cake
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esurgence of long-term unemployment
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22 Financial Services Authority (FS
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7 This idea is not new. The 1970 We
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33 Arpaia, Alfonso, Declan Costello
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9 See Garabiol-Furet, M.-D. (2006)
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Chapter 11 1 Victor, D.G. (2006)
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Authors Iain Begg | Gabriel GlÃ¶ckler | Anke Hassel ... - The Europaeum

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