The EU's money should support global good

By Clive Bates

Former head of environmental policy at the Anglo-Welsh Environment Agency
It’s not often politicians decide how to spend €1 trillion, but that is what happens when the EU settles its budget for a seven-year ‘financial perspective’. The last one was agreed in December 2005 for 2007-13. The next one is already under way in the form of the European commission’s budget review, Reforming the Budget, Changing Europe.
Of the €1 trillion spend by 2013, about one third will go on subsidising agriculture, one third on grants to poorer regions of Europe and most of the rest on rural development, R&D and the EU’s global role.
The disturbing thing is that most of this spending has no credible justification. In the case of agricultural subsidies, there is no solid rationale for state intervention. To help poor regions, regulation or loan finance should be used instead of grants. And for rural development, spending should be done at member state level – not by the EU.
This isn’t just grumpy Euroscepticism beefing about the money that is spent. We should also be worried about the money that isn’t spent. We need a strategic switch in the budget: away from the Byzantine system of internal transfers typified by the common agriculture programme (CAP) and regional funds, to a much more outward-looking budget that supports Europe’s destiny as a force for good in globalisation. This is what should be done:
l Cut the CAP by at least 80 per cent by 2020 and decentralise the remainder to member state budgets. Resist the clarion call to switch CAP spending from pure farm subsidies to agri-environment schemes and rural development, which should be the business of member states. The crucial budget switch should be from intra-EU transfers to external environmental spending.
l Use a strengthened EU environmental budget to underpin critical global environmental agreements, fund global public goods and support environmental diplomacy with
developing countries.
l Replace intra-EU regional ‘cohesion’ grants with loans. Switch the grant funding to support enlargement and promote sustainable development and stability around Europe’s periphery: North Africa, the Balkans, Middle East and former Soviet states.
l Give up on the myth that EU-sponsored R&D spending promotes competitiveness: other things matter far more.
l Help member states reach the UN target of 0.7 per cent GDP spent on development aid by pooling spending in developing countries and specialising in environmental infrastructure and adaptation to climate change.
l Spend more promoting a European model of human rights and democracy. Develop the diplomatic and military capacity for peacekeeping and interventions to uphold the UN’s ‘responsibility to protect’ principle.

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