Written by Tim Peters, Head of the Budgetary Policies Unit.
The European Union’s budget is currently under significant pressure: the EU has sent massive financial aid to Ukraine. Russia’s war of aggression against Ukraine has led to high inflation and high interest rates, which mean that the space available within the EU budget has become even tighter.
Against that background, three influential members of Parliament’s Committee on Budgets and one renowned academic expert discussed the future of the EU budget in Parliament’s library: the two co-rapporteurs for the revision of the MFF, Margarida Marques (S&D, Portugal) and Jan Olbrycht (EPP, Poland); one of the two co-rapporteurs for the reform of the own resources, Valérie Hayer (Renew, France); and Iain Begg, Professor at the London School of Economics and Political Science. All panellists agreed that the current multiannual financial framework was not fit for purpose and urgently needed a pressing and meaningful revision. Albeit not perfect, the European Commission’s proposal was judged a significant step forward in the right direction. In their opinion, the European Parliament would, therefore, broadly support the Commission proposal and be likely to ask for top-ups for certain headings and an enhanced flexibility to cope with unforeseen events.
The panellists concurred that the EU needed to reform its institutional and budgetary setup to be ready for the forthcoming enlargement to include Ukraine, Moldova and several Western Balkan countries. Due to the significantly lower level of prosperity and the high relevance of the agricultural sector in those candidate countries, the budgetary consequences of their accession would be massive.
The Members underlined that the EU has to commit the budgetary means necessary to meet its political priorities. It is not sustainable, in their view, for Member States to allocate more and more tasks to the EU while simultaneously refusing to provide appropriate financial and human resources allowing the EU to deal with those tasks. The Members pointed out the need to replace GNI-based own resources with genuine own resources, based on EU legislation such as the Emissions Trading Scheme or corporate taxation of large multinational companies.
Further reading
- Topical digest: EU long-term budget: Does the EU have enough resources to finance its priorities?
- Revision of the EU’s long-term budget for 2021 to 2027: Securing sufficient resources for the EU
- System of own resources of the European Union
- Financing Ukraine’s recovery: Consequences for the EU budget and budgetary control, and principles for success
- Prof Begg’s presentation
It is important to set priorities right, before taking on new challenges. It is irresponsible to do otherwise. If the EU wants to enlarge it has to restrain it’s ambitions on integration.