Report Euromyths (3/10)

EU budget — little money, much waste

The EU spends too much money and it does so for pointless projects, goes the usual reproach. But is it really so wasteful? asks Groene Amsterdammer in its third Euromyth investigation.

Published on 25 July 2012 at 10:35

In 2012 the budget of the European Union was 147.2 billion euros, approximately 1% of the combined GDP of all its members. By way of comparison: in an average member state the budget comprises 44 percent of the GDP. A federal government like the United States spends a quarter of the national income. Nevertheless, these comparisons are like comparing apples and oranges. The US budget includes defence, police and all sorts of other matters.

The question is whether that 147 billion of the EU is too much. Brussels itself tends to trivialise it: “A half a cup of coffee a day.” But this doesn't say much either. Is the money used in the right way, for the right things?

The biggest cost headings of the EU are the cohesion policy and the common agricultural policy. Bernard Steunenberg, a lecturer in public administration in Leiden, calls the latter a “blemish” — “Agricultural policy is a costly phenomenon which does little for us. Maintaining specific prices has turned out to be a very poor, wasteful instrument.” The policy is being phased out, but the amount remains 40% of the EU budget.

The money is often not spent

Almost just as much goes to the cohesion policy. Hundreds of thousands of projects which are intended to ensure that the gap between poor and rich regions is closed. An “investment”, according to EU commissioner for Regional Policy, Johannes Hahn. “In your country tax money is also transferred from rich provinces to poorer provinces.”

But there are two big problems. First of all the money is often not spent, or is not spent on useful things. “If there are no projects, or if a country does not have money for co-financing, the reserved money is just held for that region,” says Fabian Zuleeg of the European Policy Centre.

Second problem: the results cannot be assessed. The European Audit Office has been trying to do so since 2001, but still has not been able to issue a positive opinion. National governments cannot properly account for the EU monies they manage. According to recent research of the European Audit Office, many of the 31 agencies of the EU cannot account for a substantial part – in some cases up to half – of their expenditure. 147 billion euros provided by 27 countries may not seem like that much. But if the money is primarily spent on subsidies for farmers and questionable regional projects, the EU loses credibility.

Part 2 of the series

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