Reforming the Budget,Changing Europe

Dr. Dalia Grybauskaitė Commissioner for Financial Programming and Budget

Brussels, 12 September 2007

Why budget reform?

Today’s dynamic world presents new challenges – an effective response is promptly needed;

Internal - economic, social, demographic – EU developments demand a fresh look;

The EU is substantially reforming its political and institutional shape;

Lessons from former enlargements should be taken into account when assessing the EU’s integration capacity – political, economic and financial;

The EU budget needs to better reflect new realities and become an efficient instrument in implementing new decisions.

The changing EU in a changing world needs a reformed budget

Reform has already started

The EU dared to acknowledge the need for change (Council, 2005);

The decision on a Review agreed between the Institutions (2006);

A strong determination signalled – Commission was invited to undertake a comprehensive review covering all aspects of: EU spending, including the Common Agriculture Policy, EU resources, including all correction mechanisms.

The Commission - a strong advocate of modernisation - without any delay undertook piloting an exercise by: launching all preparatory work (studies, collection of data, analysis); presenting the Discussion Paper as an invitation for a debate.

Reform is about Europe, not just about money

The Budget Review IS…

… a policy-driven exercise;

… a fresh look at a wider picture of Europe in the World;

… a reassessment of new risks and challenges;

… an analysis of the value added by EU spending in tackling challenges;

… a long term strategic vision of EU finances;

… a shift towards a new quality of EU spending.

Discussion paper: a call for a fresh look

Aim: to clearly define the aims of the reform To launch a frank debate on future policy challenges and EU finances; To encourage participation of all actors at all levels.

Principles: fairness, responsibility, ambition No pre-conditions, no taboos – a fresh look at everything; Innovative ideas are welcome; All voices should be heard and considered.

Content: we are not imposing answers, we are inviting for debate Pointing to key issues up for discussion; Presenting state-of-play, exposing problematic aspects; Posing basic questions to be answered before decisions are taken.

Issues to discuss

1. The budget as a tool - to reflect changing reality, to promote changing political goals;

2. The EU’s top policy priorities, responding to new challenges;

3. The EU’s spending priorities, fully matching policy agenda, providing maximum added-value in meeting new challenges;

4. Delivery of EU policies - towards a maximum efficiency;

5. The financing of the EU Budget – focus on efficiency, simplicity and transparency, ensuring that resources fully mach ambitions.

All aspects and all their interconnections should be re-examined:

Budget: meeting tomorrow’s challenges

Issues to discuss:

Challenges and risks for the EU and the world in the 21st century;

The EU’s ability to respond to and proactively shape change;

Long-term policy agenda for the next decade and beyond;

Optimisation of spending ensuring maximum added value for the common European interest;

Role and potential of the EU and of MS to manage agreed priorities.

Questions to be answered:

? Has the EU budget proved to be sufficiently responsive to changing needs?

? What are Europe’s policy priorities for the decades ahead?

? How can added value be maximised to make the best use of resources?

? How should policy goals be reflected in spending? What shifts are needed?

Delivering: striving for maximum efficiency

Issues to discuss:

The focus of EU funding – wide spread or greater concentration;

Variety of management – centralised, decentralised, shared, joint;

Co-financing – experiences, advantages, problems;

A balance between stability and flexibility, discipline and simplicity;

Transparency and accountability.

Questions to be answered:

? How could effectiveness and efficiency of budget delivery be improved?

? Over what period of time should reorientations be made?

? How could transparency and accountability of the budget be enhanced?

? Could enhanced flexibility help maximise the return on EU spending?

Resources: to mach political ambitions

Issues to discuss:

1. The current system:

in theory – a simple scheme of three major sources;

in practice – each of the sources is affected by corrections;

2. Basic methods of contributing to the budget, helping to identify both:

stable and sufficient sources of funding the budget;

fair contributions to the budget.

Questions to be answered:

? What principles should underpin the revenue side of the budget?

? Is there any justification for maintaining corrections?

? What should relations between citizens and the EU budget be?

Next steps towards a result

Nov 2007EU Presidency initiative: Debate of the Budgetary Committees of the European and National Parliaments;

Political Conference in association with the European Parliament: initial analysis of the results of the debate;

Spring 2008

Commission starts preparing its proposal for the ReformSpring 2008

Public consultation: collection of opinions Now – April 2008

2008/09 - Commission presents the Budget Reform proposal

Commission’s initiatives to encourage discussion:• In-depth exchange of views with MS and the EP at all stages;• Meetings, debates with all interested parties.

Ongoing

2009/10 - discussion and endorsement by the EU Institutions

2010/11 – proposal for the next Financial Framework

Be informed!Have your say!

http://ec.europa.eu/budget/reform/index_en.htm

http://ec.europa.eu/commission_barroso/grybauskaite/index_en.htm