THE BLOG

EU Budget Deal Not Good Enough

13/03/2013 17:30 GMT | Updated 13/05/2013 10:12 BST

The European Parliament has now clearly stated its opposition to the proposal from heads of state on the EU's long-term budget, with the vast majority of MEPs listing several key demands before any deal can be signed off.

My own group decided already at the end of February that we would not contest the 3.3% overall budget cut that was agreed in the European Council earlier that month. At a time when national governments and individual taxpayers are feeling the pinch of recession, it is hard to argue that the EU should not be tightening its belt as well. However, we believe that the overall structure of the budget was insufficiently oriented towards policy areas that will support economic growth - such as R&D, infrastructure and the digital agenda.

The deal reached by EU heads of state was not a budget of the future, but a budget of the past. The proposed 9billion euros set aside for expanding broadband networks was cut to just 1billion. Agricultural spending was left almost untouched, at almost 40% of the entire budget, and the deductions which were made were largely from rural development rather than direct subsidies. Planned spending on research and development was cut, while the budget for growth and competitiveness - including funds to help address the growing scourge of youth unemployment - was also slashed. This may have been a good compromise for national treasury officials, all seeking to minimise their contributions and maximise their receipts while defending their own national vested interests. However, it was not a good deal for the many citizens across Europe who depend on EU programmes. That is why we are calling for a more modern, forward-looking budget which promotes competitiveness and innovation, not one based on Europe's needs in the 1960s.

We also need to improve flexibility, so that the EU is able to adapt to changing circumstances and spend money as effectively as possible - taking unspent money from some areas and investing in others. In addition, it makes no sense to vote on a budget for the next seven years when the context is likely to have changed dramatically. Even the Soviet Union only planned five years ahead. Rather than being tied down to a seven year austerity budget, there should be a binding review around 2015 which would allow the next democratically elected European Parliament to have its say.

Finally, we believe that there should be a long-term move towards giving the EU its own financial resources so it is no longer dependent on national contributions. This will help prevent the constant horse-trading between member states which always results in a lowest-common-denominator outcome. Various proposals have already been made, such as a 'Robin Hood tax' on financial transactions, or a share of the profits from the EU's carbon emissions trading scheme. In any case, we should not wait another seven years before addressing this vital issue.

The next stage is for representatives of the European Parliament to negotiate with heads of state in the Council, before a final vote in Parliament expected sometime in June. Let us hope that we can get a better deal for taxpayers across the EU, one that makes the best use of scarce resources whilst prioritising future growth, innovation and jobs.