CHANGES IN THE EU BUDGET: A VIEW TO 2011 PROPOSAL

Negotiations on the 2007-2013 financial proposals took place in a very negative political and economic context. On the one hand, the existing economic crisis in the Euro-zone has been translated into immense pressure on the EU budget, where the total amount has suffered substantial cuts. The pressures exerted on France and Germany to meet the fiscal criteria contained in the Stability and Growth Pact have made these member states argue their contributions to the Community budget as justification for the criteria. Meeting the Maastricht criteria has been used by some member states to justify their budget deficits. From the Spanish perspective, these statements are inaccurate, since each country’s balance in the budget only reflects that country’s initial situation, and is not an assessment of its macroeconomic stability. On the other hand, Spain’s spectacular economic growth in the past decade and the recent Eastern European enlargement have brought it up to near the EU average in terms of income. These three effects combined explain the reduction of Spain’s positive balance over the next few years. However, Spain’s success in the negotiations is clear: its net balance for the following period will still be positive; cohesion funds will be extended to account for the “statistical effect of enlargement ”; Spain’s least developed regions will continue to receive funds (although these will decrease gradually); the EU will put more effort into controlling migration; and, finally, a technology fund has been created specifically for Spain, the first in EU history.

Trends for new budgetary perspectives within the European budget are mainly defined by a decrease in agricultural transfers linked to the European Agricultural Guidance and Guarantee Fund (EAGGF) and an increase in measures that focus on research, development and innovation policies, on which the Lisbon Strategy is based. Spain’s situation in this regard is among the worst of all member states. In basic terms, the proportion of GDP set aside for research, development and innovation is around 1%, which is a third of the target set in Lisbon for the year 2010. Only countries such as Sweden, Denmark or Finland get anywhere near this target. In Spain, greater participation by the private sector is needed.