The EU budget is built on the member states’ contributions in order to enhance the role of the union at the global level. Financial collaboration allows the union to achieve success in areas such as agriculture (CAP), healthcare, climate change, cybersecurity, human rights, and cohesion policy. The latter is a crucial part of the EU budget, including sectors like education, employment, energy, innovation, and the common market.
It aims to reduce economic inequalities within the Union and encourages territorial bonds among member states. According to the number of above-mentioned problems, it is hard to accept an unused part of the budget as true and fair.
The Paradox
The discrepancy between the unspent funds of the union and the problems to be solved should be called a “paradox” which indicates inefficient use of the EU’s budget.
What does an unspent budget mean when dealing with a progressive problem such as climate change, which threatens the availability of various resources and the health of people?
Although the European Union is funding the Green Deal, no substantial changes are seen in terms of improving environmental conditions, indicating that positive changes need greater financial effort.
The current state of the climate may not seem outrageous, however, neglecting this problem will lead to a worse situation.
For budget use, the EU establishes an extended plan known as the Multiannual Financial Framework, which controls expenditures and provides key priorities of the union. Allocation of resources depends on concerns based on the member states’ political directions, considerations, and common strategy. Often, devoted resources and priorities do not match; therefore, some areas receive less money than necessary.
The 2022 agreement of the Council and the EP regarding the 2023 budget, with total commitments of €186.6 billion and total payments of €168.6 billion:
Similarly, at the end of 2023, the Council and the European Parliament agreed on the 2024 budget, with total commitments of €189.39 billion, while total payments are approximately €142.63 billion.
One widespread problem of the 21st century is cybercrime. The EU must prioritize this issue and invest significantly more money, as cyber-attacks erode democracy.
How is it possible not to use the budget entirely while witnessing a full-scale war between Russia and Ukraine? Are there more important duties than peace and security?
Something has to change…
Last year, Brussels asked member states for additional money for Ukraine to plug budget gaps. EU member states discovered €16 billion in unspent funds from the Union’s budget, revealing that the Commission’s duty was performed ineffectively.
Denmark, who was the main identifier of this irregularity with Germany, rejected Brussel’s request for additional funds.
While member states had previously agreed to help Ukraine with grants, after Brussels’ notice, they shifted their approach and donated only loans. Berlin was ready to provide additional funding directly to Kiev, but refused to contribute the amount to the EU budget. It’s not the first time Germany opposed certain aspects of EU proposals. During the negotiations for NextGenerationEU, Germany together with France supported a mix of grants and loans. Hence,it isn’t surprising if Germany sometimes says “no” to a specific policy, since it contributes the largest share to the EU budget:
Today, the level of Euroscepticism has increased dramatically. The reasons for such an approach are the lack of transparency and democracy within the union. 27 different countries mean 27 different requirements. Reaching unanimity among MS seems complicated and hinders the implementation of the funded programs in proper time. The background of facts, criticism, and mistrust makes it clear that restoring faith among the member states has become one of the main goals of the European Union.
In 2022, Social Democrats (S&D) expressed their criticism of budgetary ineffectiveness and irregularities. They criticized the European Commission for not being able to present a realistic plan for the targeted use of the budget. S&D discussed the importance of assisting neighboring countries (in terms of democracy and economy) that struggle with threats from Russia. They condemned corruption and urged the Commission to come up with a more flexible plan that would meet the people’s social needs. They believe that the EU should’ve been able to redistribute the budget properly to ensure that it deals with pandemics, asylum seekers, and conflicts in neighboring countries.
The EU budget in the future
Inefficiency or fraud? Despite the Commission condemning fraud, this remains the main question regarding the EU budget.
Therefore, it is necessary to outline future plans to resolve misunderstandings around money. There are some suggestions for the Commission to create mandatory schemes for expanding budget flexibility. The EU funding programs should not focus on short-term, intermediate success, but on effective long-term results that will bring significant changes and improvements. They should be equally attentive to problems of the same nature in different regions. Money that is not implemented should be restored to the EU budget instead of being lost. More importantly, the Union must remember what makes it a unique entity – the values shouldn’t be in question.