Budget bodged

29 October 2007

It is becoming increasingly apparent that the EU budget review launched by the European Commission earlier this year will be largely cosmetic, writes Stephen Gardner. It was Tony Blair who secured in 2005 a promise to carry out a review, as part of a deal on EU spending plans, which are fixed until 2013. But with Blair out of the picture, promises are being watered down. The Commission has said there should be “no taboos” in discussing the budget, but will give no guarantee about if and when any recommendations might be acted on, saying only that the review will be for “the decades ahead”. Furthermore, the Commission has also launched a 'CAP health check' – or review of the biggest single consumer of EU funds, the Common Agricultural Policy. But this will report only at the end of 2008, meaning its findings will not be incorporated into the budget review, which is due for publication in 2008 or early 2009. Now, researchers at a Brussels economic think tank, Bruegel, have found another reason for the Commission's obfuscation. One third of EU money is spent on giving a leg-up to poor regions, thus reducing economic disparities. But does this work? As Bruegel discovered, nobody really knows because nobody reports back to the Commission with data on the impact of the funds. This makes it impossible to judge the merits of the policy of funding lagging regions, to compare regions, or to separate the impact of EU funds from other factors. It also means there is no real evidence for assessing if regional development money really needs to be churned through Brussels, or if cash should simply be 're-nationalised' for member states to pursue home-grown programmes. No wonder the Commission doesn't want too much light shed on this embarrassing gap! A version of this article was originally published in Private Eye.

 

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