Towards a European Budgetary System

Abstract

The present EU budget is inconsistent with the current state and future prospects of European integration. Three failures are most evident: first, spending is heavily tilted towards the support of a declining sector, agriculture; second, it is almost impossible to reallocate spending across time and across policies; and third, its size is unrelated with the goals of the Union. Transforming the Community budget into a means through which the economic policy of the Union is consistently defined and put into practice requires correcting these failures. This can be done by moving towards a fully fledged 'European Budgetary System' in which the EU and national budgets pursue, in a co-ordinated manner, commonly-agreed objectives set in the Broad Economic Policy Guidelines. On a multi-annual basis, the EU Financial Perspectives and the national Stability and Convergence Programmes would be set within an aggregate European Budgetary Programme. Annually, this should give rise to a EU Budget Law to be approved alongside national budget laws.