November 22, 2012
One of the next big challenges for the European Union will be on the effectiveness of its new budget for the next seven years (2014-2020). The reason why it will be a challenge is given for a set of simple reasons. First of all, it s important to notice that in a period of structural crisis, it is important to “design” a budget which can effectively provide some answers to major problems which have been created by national policies and politics. The European Union is still an hybrid, despite the fact that nowadays most of the national policies are decided in Brussels. The problem is then to question why at national level these policies have not been fully applied. Yes, I am not questioning the quality of the policies but on the level of their application at national level. When talking about Europe 2020 Strategy, for example, it is obvious that not a lot has been done, especially when considering Mediterranean Countries, despite the fact that the EU has provided both policy and financial instruments to reach the foreseen results. The problem is then the level of application of EU policies and also on the ability of “politics” to obtain those results, overcoming particular interests. That is the reason why the EU Budget has to put some serious constraints on national “politics”, maybe with a process of centralization of the entire management of the different form and way of funding.
Secondly, it will be important to overcome national differences while considering the nature and scope of the budget itself. Soon the EU will be made of 28 different States. Without considering each one of them, it is possible to rationalize them creating different blocs we have Mediterranean countries, Central European ones, a Northern European bloc, a Southern-Eastern bloc and, finally, Eastern European countries. Each one of these blocs has different internal problems and, mainly, a different vision on the role of the European Union. In order to achieve some relevant results, it will be important then to design an appropriate budget which can accommodate different visions, needs and constraints. One of the most important question that needs to be answered is on the management structure of the budget: which one is the most appropriate form? A centralized one or a decentralized one where each country takes care of its own part of the budget? I do believe that with a rationalization of the blocs it is possible to create a centralized management structure which can provide structural answers to the various needs.
Last but not least, the problem of the allocation of budgetary resources. Unit now we have experienced a budget which has been designed mainly keeping in mind the CAP. Despite the fact that the agricultural policy has to remain one of the pillars of the EU, it is important to design a new strategy for the allocation of resources to farmers. It is not a dogma that the CAP has not given the expected results. EU farmers are no more competitive, our products are not sufficient for the internal market and we do depend from non EU products. The new CAP has to provide an answer to these problems. Moreover, RDI policies have to be linked to all the others form of funding. So far we have not experienced effective solutions to the lack of links between the productive sector and the academic/research one. That is the reason why our level of competiveness when considering different economic sectors has dramatically fallen. About structural funds and cohesion policy: I do support the idea of the necessity to get rid of the GDP as main ratio for the allocation of funds for the regions. It is important to reconsider long term objectives, regional differences and vocations, population and so on. Moreover, a national/regional management of the funds provided by the EU has not given major results because of the administrative burden and because of the lack of serious constraints for the management structures. Because of this, it is important to create a centralized EU structure which can effectively manage these funds and link them to a multi level policy approach. Before thinking about Smart Specialization, we have to create a Smart Management Structure and create strong connection also with different ETC and CBC programme.
Of course this is only a list of the challenges in the definition of the European Union budget for the next programming period and many more considerations can be done. The next few months will be strategically important for the future of the EU in its entirety.
Author : Giuseppe Luca Moliterni