Discussie over herziening budget begint (en)

EUOBSERVER / BRUSSELS - Moves are gathering pace to reform the EU's budget which critics say is undermined by government bickering and a system that promotes 'pork barrel politics' - lobbying for local interests rather than the common good.

At the moment, negotiations on the bloc's budget - over €860 billion for 2007-2013 - take place under a siege mentality with governments coming to the table with an overwhelming sense of getting juste retour - as much EU money as possible spent on policies that benefit them.

Agreement on the multi-annual budget therefore traditionally takes place at the very last minute and in a cloud of thorough ill-humour.

This form of negotiating was last showcased in 2005 when member states, arguing over Britain's annual rebate from the budget, failed to agree the next seven-year spending plan.

A deal was finally reached at the end of that year when Britain agreed to a concession on its rebate in return for an overall review in 2008 of the bloc's spending policy, particularly in relation to farm subsidies, amounting to some 45 percent of the budget.

The European Commission is now looking into this can of worms.

It is publishing a review paper on all EU spending in July, plans on summing up the results from a consultation paper early next year and presenting a budget review document to EU leaders by the beginning of 2009.

Learning lessons

Vasco Cal, a member of the EU budget commissioner's cabinet, says the commission has already drawn lessons from past budget skirmishes.

He told a budget seminar organised by the Green group in the European Parliament on Tuesday (17 April) that in the future "policies and not numbers" should be discussed first and that there should be no "taboos" in the debate.

Speaking about the last budget round he pointed out that before negotiations had properly begun six member states had already said spending should be capped at 1 percent of gross national income; while farm money was left untouched due to a 2002 Franco-German deal securing farm spending until 2013.

He also said the budget debate should be "launched as early as possible" and that there should be a "key element that unifies the package."

In the previous budget the hot topic was enlargement, for the current budget it is the EU's economic and competitive goals - also known as the Lisbon strategy.

But Mr Cal conceded that this headline goal had not sufficiently united national governments who felt free to siphon off proposed money for areas such as R&D - seen as key to reviving the EU economically - in order to cut down on overall spending.

Meanwhile, Iain Begg, an EU budget expert from the London School of Economics, said that although the UK is the first to say that the budget must be rational and about getting the best returns - something repeatedly said by prime minister Tony Blair in 2005 - this is not always possible to achieve.

Other goals, such as solidarity towards less well-off member states, also have to be taken into account. According to Mr Begg, future reform is going to mean "hard choices" on how to make the bloc more competitive.

The future

Both the commission and parliament are looking to see how the EU's budget - currently a mix of GNI contributions, and levies on agricultural imports, customs duties and a share of national VAT receipts - can be reformed to make it more transparent and less subject to national interests.

They are looking to a system of "shared tax" - a more palatable name than EU tax - whereby the EU automatically gets a share of VAT, energy or possibly copyright taxes.

But this model also has its critics. Friedrich Heinemann from the Centre for European Economic Research, argues an EU tax will not change member states' tendency to fight only for local interests saying that no one will fight for "the general taxpayers' interest."

He suggests instead that there should be a two-tiered budget consisting of "distributed spending" (farm subsidies and cohesion funds) and European public spending with the latter gradually accounting for more and more.

But all agreed that parliament and the commission should seize the momentum for reform provided by current debate or risk the present system remaining in place until 2020 - the end of the next multi-annual budget.