Towards a Reform of the EU Budget

Summary:

Editorial by the author.

Twenty years ago, the Sapir Report famously defined the European Union's (EU) budget as 'historical relic'. Today the EU budget remains outdated and unfit to face current EU policy challenges. Priority has been given to stability and budgetary peace, with limited attention paid to more strategic goals linked to the EU's domestic and international agenda. The size of the EU budget remains inadequate As a response to the COVID-19 (coronavirus) pandemic, the budget has been supplemented by NextGenerationEU (NGEU) with the Recovery and Resilience Facility (RRF) at its heart, but the programme is set to expire in 2026.

Given its composition, the EU budget cannot credibly deal with the green and digital transition, preparedness in case of a resurgence of the pandemic, the fallout of the war in Ukraine and in the Middle East, and ongoing migration inflows. Such a state of affairs could have been acceptable in a relatively stable environment, but it has become increasingly costly in uncertain times. Unless the EU budget is reformed in earnest, the forthcoming enlargement – that will bring the EU to over 35 members – might lead to a breaking point. To live up to expectations and effectively tackle these challenges, the EU budget needs to be radically reformed both on the revenue and expenditure side.

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