EU resources are under pressure, given the need to invest in defence, climate change and possible expansion into Ukraine.
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It is possible that the European Union (EU) needs a larger budget to address problems such as help ukraine and the investment in the Armysaid a senior official at a conference held this Monday in Brussels.
Brussels’ current budget amounts to little more than 1 billion eurosand the Commission will present its plans for the next period of seven years that ends in 2034.
There should be a “budget that lives up to our ambition of a stronger, more competitive and secure Europe,” said EU Budget Commissioner Johannes Hahn.
“We must avoid falling into the obsession that the budget cannot exceed 1% of the EU’s gross national income,” Hahn added. “Once we are clear about our common priorities and agree on them, we need to have underfunded to satisfy the common needs“.
Current rules limit the bloc’s central budget to around one-hundredth of the size of its overall economy, equivalent to about €170 billion a year, of which almost a third is spent on agricultural subsidies and other elements of the Common Agricultural Policy of the block.
Many EU members are also seeking increase defense spending due to the war in Ukraine, a relatively poor country with a large agricultural activity that is also seeking to join the bloc, something that could cost the EU budget around 136,000 million euros in the next seven years, according to the Bruegel think tank.
The EU agreed to what Hahn called the “largest stimulus package in the history of our Union” during the pandemic, but there is less consensus on how to repay hundreds of billions in common EU loans generated by the program called ‘Next Generation EU’.
The plans to raise new forms of EU revenue, based on corporate profits or green taxes, they haven’t taken offpartly because taxation is a national prerogative, and that suggests that future demands from Brussels will have to be financed by writing even bigger checks by Member States.
However, many of these EU countries face budget deficitsvertiginous and Brussels is putting pressure on them to bring them back under control after years of pandemic-era laisser-faire.
Hahn mentioned the ways in which EU investment can contribute to longer term growthas the reform of labor markets in Spain and help to eliminate the Italian judicial backlog that was hindering business investment.
A simplified budget
The commissioner also said that he would like to see a budgetmore streamlined and simplified rather than a multitude of programs that often overlap, but EU money is also likely to be asked to come with additional conditions.
“When we allocate resources, it is essential that our budget actively reinforces the fundamental values that define us,” Belgian Foreign Minister Hadja Lahbib said at the event, adding that there had been “significant progress in recent years” in the safeguarding of the democracyrights and Rule of law through the financing tools of the EU.
This was likely a nod to the recent controversies in Poland and Hungarywhere the EU initially withheld significant funds amid concerns about democratic backsliding and judicial independence.
There is no doubt that the importance of the enormous amount of money from Brussels is drawing attention of national leaders, including Croatian Prime Minister Andrej Plenković, who is sometimes seen as a rival to current President Ursula von der Leyen.
“We should explore the possibility arrest a more ambitious budget“Plenković told the conference attendees. “The future of the budget is the future of the Union.”
Portugal’s Foreign Minister Paulo Rangel defended more succinctly the need to expand Brussels’ resources. “If it is not increased, the EU will die“said Rangel.
