In times of economic crisis and instability there is an increased need to mobilize public funds to stimulate growth, but at the same time in these periods there is a scarcity of resources. This situation stimulates a search for more efficiency and effectiveness, and ultimately a better use of resources in terms of concentrating funds and focusing on results. Because of its size, the EU budget has a limited macro-economic impact but its leverage effect and its capacity to mobilize resources through co-financing are important and can make a difference.
The EU Budget has a potential capacity to contribute more to economic governance as it can drive changes in the European economy. There seem to be two necessary conditions for it to achieve this objective: a reform, with a new balance between its redistributive (agriculture and cohesion) and investment (competitiveness) roles, and more efficiency and effectiveness in delivering the expected results.
In spite of a global reduction of resources, the 2014-2020 Multiannual Financial Framework (MFF) has continued this (slow) evolution towards a re-balancing between redistribution and investment. Agriculture has been reduced by more than 13% with respect to the previous period and cohesion policy has been reduced by about 8%, while the heading of Competitiveness for growth and jobs â€“ which includes research and innovation; education and training; trans-European energy, transport and telecommunications networks; social policy; and enterprise development â€“ has been increased with respect to the previous period by more than 35%. This trend was already initiated in the 2007-2013 programming period.
Good coordination of financial efforts and a concentration of funds on shared priorities can have dynamic effects, but only on condition that fundamental EU principles are respected. EU legislation and subsequent support from the EU Budget should only intervene when the principles of subsidiarity and European added value are respected. The EU should only legislate when action at the EU level is more efficient than action at the national level and a European added value can be demonstrated. Another principle is the additionality of funds (particularly for structural funds). EU funds should not replace national funds but always come as a complement. Furthermore, the allocation of funds should not be directed at single projects but should be part of a strategy aligned with EU priorities.
In spite of the control exerted by governments and national parliaments, the full respect for these three principles is at least questionable. In many cases, the adoption of a regulation is more the result of a sum of national interests than genuine European added value.
This article will raise the following questions:
- Can EU policies gain efficiency if resources are allocated according to performance and results?
- Could Member State experiences with performance-based budgeting (PBB) offer support and inspiration?
- Which key indicators (KIs) are more suitable for use as budgetary indicators?
- How can EU legislation influence the introduction of a budget more focused on results?
How can a budget oriented towards results be managed in the EU decision-making process?
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Author : European pratictioner and researcher