The EU budget is to be turned inside out and restructured – resistance is forming
lz Frankfurt
The highly complex and confusing structure of the EU budget has long been heavily criticized. A large part of the budget is paid out in the form of transfers and subsidies, and there are also a large number of individual programs that have to be handled separately. The large block of agricultural subsidies (around 40% of the budget) is offset by a similarly high budget share of structural aid for individual countries. There were also recently various funds for Covid crisis aid or climate transformation (Green Deal).
Subsidies to the national budget instead of direct subsidies
And now, in view of the competitive challenges, Brussels is demanding as recently stated in the Draghi reportadditional funds for a European industrial and technology policy. In particular, the demand to raise its own funds on the financial market via Eurobonds is met with resistance in Germany, for example, which, as a net contributor to the community, would then also have to be liable and pay for the EU loans on a proportionate basis. In addition, there is the suspicious increase in Brussels’ power through the autonomous allocation of funds.
A paper from the EU bureaucracy that was leaked to the FAZ must be seen against this background. The EU Commission then wants to restructure the budget. The two largest budget items to date, aid for farmers and support for structurally weak regions, are to be eliminated. Instead, the majority of the budget – including agricultural and structural aid – should be transferred to the EU states as a kind of subsidy to the national budget. The EU states should implement concrete political reforms to this end. The model is the Corona recovery fund that the EU created in 2021.
Criticism from the Court of Auditors
At the same time, a European Fund for Competitiveness is to be created, which will incorporate all of the resources and funds previously earmarked for this purpose in the broadest sense. That would be the space program as well as the Horizon research program or the European Defense Fund. The restructuring should be part of the proposal for the next multi-year EU budget from 2028 to 2034.
Such a budget structure would be less complex and significantly less bureaucratic. According to the FAZ, instead of around 530 programs, there are only 27 – one per member state. This also enables members to use the funds more flexibly and to be able to react more quickly to crises.
However, there is also criticism of the reform. The European Court of Auditors had already criticized this approach, which was implemented analogously with the Corona Fund, several times. It was only in September that he complained that there was a great risk of errors if the EU did not reimburse the costs of projects retrospectively – as has previously been the case in the EU budget – but rather paid money as soon as states fulfilled certain reforms and presented individual stages of specific projects .
