Time for change in EU budget spending

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EU With Europe facing challenges like climate change and economic crisis, is it responsible to retain a 50 year old policy that earmarks over 40procent of the EU budget to agricultural support? The rhetorical question was posed by the president of the Confederation of Swedish Enterprise, Signhild Arnegård Hansen, at a conference on EU budget and competitiveness in Brussels last week. Her categorical answer was no, it is not.

Signhild Arnegård Hansen

Signhild Arnegård Hansen, president of the Confederation of Swedish Enterprise.

Research, Innovation and a productive and high quality education system was rather her cure to turn Europe into an entrepreneurial and competitive continent. Attractive research- and innovation environments should be created if EU is not to be hopelessly left behind, Arnegård Hansen emphasized with reference to our main competitors, the US and the BRIC countries. The same message was put forward by CTOs and CEOs interviewed in the report from CAP to Competitiveness, presented at the conference by Charlotte Nyberg of Swedish Chambers.

Also presented was the price tag for EU in terms of efficiency and welfare losses. For EU15 alone, the efficiency loss has been at least 34 395 million euro and the welfare loss as proportion of GDP is 47procent. Statistics of how support is distributed within France showed that a minor part of large companies receive most of the funding.”The French farmers have been fighting for the king of Prussia”, Patrick A. Messerlin, Patrick A. Jomini and Pierre Boulanger from Groupe d´Économie Mondiale at Science Po concluded.

Arnegård Hansen pointed to the obvious connection between fulfilling the Lisbon Strategy goals, to become the world’s most dynamic and competitive knowledge economy, and budget spending. “To me, as a business person, it is irrational how EU could form such ambitious goals without backing it up with resources. It seems like the Lisbon Strategy has followed one path and EU budget another” she remarked.

This could also have played a role in the recent election, she speculated. “Is it possible that voters would have turned out in larger numbers if there was something substantial in the making?” We need politicians that are willing to prioritise modern challenges, she continued. “EU must be brave enough to break with poor and old habits. One such habit is the agricultural support.”

Another issue put forward was the open consultation that the Commission launched in 2008. Citizens, organisations, governments etc.have all contributed with views on how EU budget should be spent and how value added is created. The result showed a strong support for investing in research, technical development and in measures to tackle climate change.

But the Commission is dead silent.

“It is not acceptable to keep postponing a formal comment on this result. We from the business community have high expectations on the report that the Commission is to present”, Arnegård Hansen firmly stated both at the conference and to the vice-president of the Commission, Siim Kallas, when they met shortly after. Tax payers, consumers, companies and farmers would all benefit from a budget that meets modern needs and serves as a vehicle for economic growth. It will take political courage both in the current and in the upcoming Commission to make this happen.

The conference was arranged by German Marshall Fund, SciencePo, Swedish Chambers and the Confederation of Swedish Enterprise and gathered around 100 participants, including policy-makers from EU-institutions.

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