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Weeklog Dennis de Jong: the battle of the European budget

November 11th, 2012 • EU finance ministers last week failed to reach agreement on the closure of the 2012 budget shortfall of at least €9 billion. There is also no agreement on the budget for next year or the multi-annual budget for 2014-2020. The European Commission and the European Parliament find this shameful. There is nevertheless a great deal to be said for maintaining an extremely critical attitude. While the member states are subject to a straitjacket of strict criteria governing budget deficits and national debts, here in Brussels we carry on writing a cheque for seven years’ money. Imagine that happening in the Netherlands. The national authorities would then have at their guaranteed disposal a fixed budget for the duration of two (or more) governments. Everyone would find that bizarre, but for the EU it’s the most normal thing in the world. Time for thoroughgoing change.

Dennis de JongThe budgetary practices in Brussels and The Hague grow ever . While our national Parliament receives a budgetary proposal from the government each year, on which in the light of the extent of financial and economic elbow-room decisions are taken, Europe is happy to do business for seven years all at once. This is known as the multi-annual budget. This budget fixes the financial framework. If circumstances in the meantime change, too bad, but what’s agreed is agreed.

That sometimes leads to problems, such as when the European Commission observed that in 2012 there were so many remaining payment obligations that a further €9 billion would be needed. An agreement is after all an agreement, and in previous years rather a lot of payments were left outstanding without the concrete means to cover them. For example, for infrastructural projects which had been delayed. This year it turns out that all of these projects will indeed demand concrete means, which is why there is a request for a raising of the budget.

It is very strange that the European Commission applies a completely different policy when it comes to individual member states facing similar problems. In those cases the iron rule of 3% - the maximum level of budgetary deficit allowed in any one year – is imposed. Setbacks must always be offset by additional cuts. This doesn’t apply to the European Commission. In their case, setbacks must be addressed by additional national contributions. This is of course completely illogical. The logical solution would be on the one hand to make the 3% rule more flexible and on the other not to automatically chalk any setbacks in the European budget up to the member states, but first of all to look at where overspending might be compensated for by not doing certain things, for example conducting fewer studies and holding fewer workshops and conferences, imposing a freeze on new staff appointments or giving less money to inefficient agencies.

In addition, it would be better to make the multi-annual budget more flexible rather than, like the Europhiles, stating that EU spending will put economic growth throughout Europe back on track so that it is precisely in bad economic times that more money should be transferred to Brussels. No, setbacks must also have consequences for Brussels. That’s why a multiannual budget must be capable of being adjusted in order to take account of changed economic and financial circumstances. The SP is thrifty, in Europe as well. This is still taxpayers’ money and in Brussels there’s a great deal of fat that could be trimmed. Savings in Brussels would lead eventually to reduced national contributions and that would be good for the Dutch budget and good therefore for everyone in the Netherlands.

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