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Understanding the EU Budget

Tuesday, 24 May 2011 13:32

by Ben Patterson

9781907720239_frcvrThe EU’s Budget currently totals over €140 billion or about £117 billion a year.

 

But is an EU budget necessary? How large should it be? How is it decided and funded? And is it under proper control? These are some of the questions which Understanding the EU Budget seeks to answer.

Understanding the EU Budget ends with two recommendations for the future which both Eurosceptics and federalists alike may find controversial. Meanwhile, businesses and individual taxpayers deserve as good an explanation as can be provided of how the money they pay to Europe is raised and spent on their behalf.

Published: July 2011

ISBN 978-1-9077-23-9

100 pages

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Description


The Budget of the European Union – the “Common Market” which Britain joined in 1973 – will soon be back in the news. Decisions are to be taken later this year on how much the EU will be able to spend between 2014 and 2020, and how much British taxpayers will have to contribute.
The EU’s Budget currently totals over €140 billion or about £117 billion a year. But is an EU budget necessary? How large should it be? How is it decided and funded? And is it under proper control? These are some of the questions which Understanding the EU Budget seeks to answer.
Even when decisions are not pending on the long-term, the EU’s annual budgets are a perennially contentious issue. The UK is the second largest contributor; and at a time when national belts are being tightened, it is not surprising that the UK is not alone in calling for a freeze on EU spending. Yet some EU expenditure is essential – contrary to popular belief the size of the so-called “Brussels bureaucracy” is comparatively tiny. In addition, much EU spending genuinely adds value: more can be achieved when countries pool resources than when they go it alone. Whether the current pattern of spending – 40% on agriculture, for example – is the right one to stimulate Europe’s lagging economies is, of course, another matter.
Written by former Member of the European Parliament, and of its Budgetary Control Committee, Ben Patterson, ‘Understanding the EU Budget’ explores the historical background, including the Court of Auditors’ reports on mismanagement by the Commission which led to the latter’s resignation en bloc in 1999. It clarifies the opaqueness of the Budget’s structure and of the procedures leading to its adoption and the likely future shape of those to come.

Contents


Introduction

Chapter 1:  Three key questions
Why have an EU Budget at all?
How big? The budget and fiscal policy
Where does the money come from?

Chapter 2: The historical background
The Three Communities
The Merger Treaty and “own resources”
The Court of Auditors and the Parliament
The UK rebate issue
Budgetary discipline
Financial perspectives
Developments in the 1990s
The crisis of 1999
‘The Affair of the Commissioner’s Dentist’
21st century reforms

Chapter 3: How the Budget is decided
The Lisbon Treaty
The Article 272 procedure
No representation without taxation?
Amendments and transfers

Chapter 4: The structure of the Budget
The Financial Perspective
The Financial Regulation: budgetary principles
The Annual Budget
Differentiation, commitments and payments
Cancellations, carry-overs and transfers

Chapter 5: Implementing the Budget
The Financial Regulation: the control of expenditure
The problem of shared responsibility
The Discharge

Chapter 6: The 2011 Budget
Water and wine
The figures

Chapter 7: The future
The 2014-2020 Financial Perspective
The Budget Review
The view of the Parliament
The revenue side: Future Financing
Fiscal federalism?

Chapter 8: Some conclusions
Expenditure
The revenue side

Bibliography

Figures and Tables
Figure 1: Sources of funding for the EU Budget 2000-2010
Figure 2: The budgetary procedure in 2011
Table 1: The Financial Framework 2007-13
Table 2: The agencies: location and budget (payments) in 2009
Table 3: The Commission budget for 2011
Table 4: The 2011 budgets of the other institutions
Table 5: Financial perspectives 1998-2013

Author

Ben Patterson was a journalist, lecturer and a London borough councillor before Britain joined what was then the European Community, when he became Deputy Head of the European Parliament’s London Office. In 1979 he was elected Member of the European Parliament for Kent West, sitting on a number of the Parliament’s committees – including its Budgetary Control Committee – before becoming a vice-chairman of the Economic and Monetary Committee in 1992. Earlier, as a member of that committee, he had been Parliament’s rapporteur on the Single Market programme. Between 1992 and 1994 he was a Bureau Member of the Group of the European People's Party.

 

From 1994 to 2004 he was Principal Administrator in Economic, Monetary and Budgetary Affairs Division of the European Parliament’s Research Department, and from 1996 to 1998 of its Monetary Union Task Force.


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