Atlantic Council

On Wednesday June 29, the Barroso Commission presented the European Union 2013-2020 budget. The negotiations between the member states and the European Parliament have thus begun, and the process will be long and difficult. Long, because the final agreement will have to be decided unanimously in the midst of the worst financial and economic crisis that Europe has experienced in recent years; difficult, because public opinion in the contributing states does not support transfers to Brussels, whilst the new eastern partners, who are for the first time seated at the negotiation table, continue to seek Community resources.

In this difficult political context, the European Commission proposal should maintain continuity while at the same time allowing for innovation. It would be a shame if the difficult economic conditions which Spain is currently experiencing were to overshadow some aspects of this package that should be of particular interest to a country that has been among the biggest beneficiaries of EU funds over the past 25 years.

Why is the EU budget unique? The EU does not directly fund health and education spending, nor does it subsidize security services, police or defense. These services continue to be financed entirely from national budgets. EU spending is concentrated only on matters concerning European competition in which the states themselves cannot or do not provide solutions. Agriculture, cohesion funds, the internal market, innovation, environment and immigration are the areas where Europe focuses its spending and produces added value.

Although the Euro-skeptic press and populist politicians rant about the "eccentricities" of administrative expenditure, the fact is that only 5% of the budget goes to salaries and European Union institution buildings. This point should remain clear.

What is new in the proposed financial framework? The Commission proposal is built on a new philosophy: Unlike in previous years, it is not about spending more money, but rather about investing money differently. More emphasis will be put on results and individual policy implementation rather than on predetermined allocations of money. The Commission is distancing itself from those voices calling for decreased ambitions. Realization of these demands would only lead to a situation in which the EU-27 would
have fewer resources than the EU-15.

The real issue at hand is the reassurance of the investment community, not the mere allocation of funds. The primary objectives of the one trillion Euro plus budget proposal are job creation and growth.

The Commission also highlights the need to safeguard funding for poorer regions and maintain the same level of agricultural support. At this stage, the management of the new Common Agricultural Policy (CAP) funds will have to be refined and the policy itself should be made more environmentally friendly.

The Commission insists on more equitable CAP subsidies for large and small farmers and in addition stresses that rural development funds be sufficient to deter farmers from abandoning their villages, farms and crops.

The new element of the Commission proposal is the creation of a new fund which will enlarge transportation, energy and information technology networks. Reconnecting Europe has been a continuous effort since the Roman Empire. Now is the moment to fasten the Union's disconnected links. Only in this way will the EU finally achieve what Loyola de Palacio first proposed ten years ago: a Europe that is interconnected via state of the art infrastructure that overcomes physical borders and integrates those regions
whose isolation has endured into the twenty first century.

Finally, it should be noted that for the first time the Commission has proposed the creation of an additional source of funds for the European Parliament, which the Parliament has been requesting for many years. This would be financed via a tax on financial services and would provide the budget with a new source of income.

We hope that the negotiation over the next seven years of the European budget demonstrates once again that European integration continues to advance in difficult times and that "more Europe and less member state nationalism" has always brought new solutions to overcome severe crises and challenges. As a result of integration and in order to advance it, Spanish political parties, the central government and autonomous communities, civil society, social partners and public opinion will continue to move the negotiation process forward with interest, solidarity, and a spirit of cooperation. Reconnecting Europe and connecting with Europe is the double challenge of the times.

Ana Palacio, an Atlantic Council Board member, is former foreign minister of Spain, and Margaritis Schinas is Deputy Director, Office of European Policy Advisers (BEPA) of the European Commission. This column was originally pubished in Spanish in El Pais. Photo credit: Reuters Pictures.