The EU cuts back on the future

It is not a matter of framing a system of fiscal federalism, which is what is really needed to cope with the crisis, and to consolidate an effective European Union. Though a strong budget for the EU would be a way out to break free from strict national austerity, a similar austerity is now asserting itself in the EU accounts. But with a budget equivalent to a mere one percent of the GDP of the Twenty-seven states, the EU at least ought to ensure that, during the next seven years (2014-2020), it has the necessary means for carrying out common policies. Europe seems to be advancing crabwise toward the future, giving priority to policies that represent the past.

The divorce between rich countries, who pay more into the Union coffers than what they receive, and the fund-receiving states — aggravated by the intransigent position taken by the UK’s David Cameron, who is seeking to monopolize debate in order to appease the Euroskeptics in the British parliament — has prevented any agreement in the European Council. The cutbacks that London wishes to impose — in everything except the British rebate, of course — are a way of saying no to stronger unity in Europe.

Once more, in what can only be described as moribund negotiations, the possibility of an agreement has been put off for a marathon meeting set for the beginning of next year.

What has emerged from the unproductive summit in Brussels is cause for concern. Not only in terms of the persistent tendency toward across-the-board cutbacks, in a Union which this year was left without funds for the Erasmus student-exchange program, itself but a drop in the EU funding bucket — but because priorities seem to be mixed up. In comparison with the European Commission’s proposal, of one thousand billion euros for the seven years, the attempt at a compromise solution, advanced by the European Commission President Van Rompuy, cuts back the budget heading for the priority declared by the Union’s Strategy 2020: that of “competitiveness for growth and employment,” including R&D.

Is this the way Europe plans to compete with the United States and China? Another chop has hit the programs aimed at “connecting Europe,” in transport, energy and telecommunications. On the contrary, with the continuance of the allocation for the Common Agricultural Policy, the EU seems to be banking more on the past than the future. There is still time to rectify.

The general bonfire may fortunately spare the cohesion funds, though with a reduction in the maximum (2.35 percent of GDP) that may be received by the neediest regions and states. Spain, should agreement be reached, will benefit from the new modality of “regions in transition,” but in the course of the seven years will become a net contributor. Though this prospect must necessarily change the government’s attitude, the latter has gone to the negotiating table without any novel ideas. The Commission, however, does have ideas: less money for infrastructures, which then require maintenance, and more for creation of employment, small and midsized businesses, and vocational training in Spain. It is not on the wrong track.