LISBON IN THE EU BUDGET

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LISBON IN THE EU BUDGET

• IAIN BEGG
• European Institute
• London School of Economics

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FIVE KEY QUESTIONS

• The budget in the Lisbon and wider economic
  governance framework
• What are the main purposes of EU spending?
• How big should the budget be?
• How is spending justified added value?
• What public goods could the EU level produce?

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Facing up to globalisation and the modernisation
of European economic and social models has been
the central theme of my Commission, and goes to
the heart of where citizens expect a European
response

• Barroso
• Joint Parliamentary Meeting on the Future of
  Europe, 9th May 2006

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TODAYS POSITION

• Up to 40 of budget spent on Lisbon aims
• but only by including cohesion spending
• Competitiveness budget did rise considerably, but
  remains very low
• Progressive increase in new demands, notably
• In relation to energy policy
• Climate change
• Lisbon budget seen as one to cut in 2005

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CONCEPTUAL ISSUES

• Economic justifications for EU level funding
• Market failures economies of scale/scope
  spillover effects and externalities disparities
  in fiscal means
• What to look for in European added value
• Priorities for EU level, given tight constraint
  on available resources
• Goals other than economic efficiency
• Governance and the choice among modes of EU
  policy-making

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THE EU AS A POLICY ACTOR
HARD LAW directives and regulations
C O O R D I N A T I O N
F I N A N C I N G
EU Interventions affecting Member States
IMPACT ON MEMBER STATES
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OBVIOUS LISBON LINKS

• Growth and employment strategy lays great stress
  on raising RD and boosting employment
• The 3 of GDP target
• Life long learning and skills enhancement
• Energy and climate change since 2007 E. Council
• All Member States include research priorities in
  National Reform Programmes
• Yet resources for 2007 minimal at 0.05 of GDP
• Hence wide gulf between aims and means

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USING SCARCE RESOURCESPossible Lisbon
priorities

• Hard choices needed
• Concentrate on areas of obvious spillover
• TENs and other infrastructure research
• Policies that overcome obstacles to growth
• Lessens pressures for juste retour
• The excellence ? cohesion/solidarity conundrum
• The need for suitable allocation criteria, or
• does efficiency in delivery trump who delivers?

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PAY-OFF FROM MOREThe RD example

• Boosting the EUs global position
• 2010 target already beyond reach
• New challengers in India and China
• China now worlds 2nd biggest spender (PPS)
• Benefits of research take time
• Basic gt applied gt market
• But stages also inter-twined
• Need to overcome past shortfall
• RD effort stalled, despite prominence (UK)

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A SHOPPING-LIST

• High-level study group, reporting in late 2008
• Clear commitments from 2008/9 review
• Articulation of principles for EU added value
• Ideally, symbolically important changes
  implemented in 2nd half of MFF
• Integration of budget in Lisbon strategy
• Opportunity of 2009-11 cycle
• Major reform for post-2013 period

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LISBON IN THE EU BUDGET

• IAIN BEGG
• European Institute
• London School of Economics