Money Talks

Money makes the world go round. And it is no different in the European Union. The process of resource allocation is therefore one of the most important issues.

This week, the European Commission extended its deadline for government proposals on how to reform the 113-billion-euro community budget. The extension keeps the issue off the agenda until Britain and Ireland ratify the Lisbon Treaty. The two nations disagree on the most costly budget item, the Common Agricultural Policy.

This discussion is a great opportunity to ensure that the budget reflects the bloc’s expanding policy ambitions, and my colleagues and I recently sent in a submission to the European Commission, making the case for more funding for foreign policy.

In the past two decades, the EU gradually moved beyond the priorities it set in 1957, and its budget has remained defined by priorities (i.e. CAP and structural funds) that do not correspond to the EU’s new challenges.

Everybody agrees that today’s international challenges – climate change, nuclear proliferation or post-conflict reconstruction – are beyond the capacity and funds of any single EU member.

But despite this, the Union’s spending on foreign policy (including development, humanitarian aid, civilian and military engagement, neighbourhood policies, climate change and the fight against terrorism) is less than some 7% of the EU’s total expenditure.

The EU budget will need to continue to deal with a number of important internal market issues, e.g. competitiveness, cohesion and CAP. But as the EU’s future success will be measured against its ability to become an effective international player and its capacity to address global issues, a consistent change in allocations will be instrumental.

Sufficient funds have to be set aside to successfully establish the new Lisbon machinery, including the new European External Action Service (EEAS), the Permanent President of the Council and the High Representative.

The new budget should also send a strong signal of engagement in the continuing democratic and economic development of EU accession countries i.e. the Western Balkans, Turkey, and Ukraine as well as those countries that take part in the current ENP framework.

Similarly, as the discussion about a Mediterranean Union reaches a political crescendo, sufficient funding should be provided to underpin the ambitions that the EU has towards this region. Lastly, future European Security and Defence Policy (ESDP) initiatives, including police missions, stabilisation interventions and peacekeeping activities, require a stable funding stream.

The EU will need to either cut spending in other policy areas, or decide to increase the level of spending on foreign policy priorities in order to address, inter alia, those issues that generate the greatest public support and interest among EU citizens. The new EU budget should allow the EU to live up to its potential in terms of foreign policy in the 21st century.