Czech Business Today

The EU Budgetary Policy is on crossroads. It is especially due to the fact that the EU priorities and circumstances determining the EU developments have been recently radically changing and the EU Budget is not able to effectively reflect to them. The other reason is quite procedural. We are now close to the end of the third year of the Multiannual Financial Framework period which means the right time to think about the next one.

Additionally, its current Mid-term review could be another opportunity for deeper considerations the future EU Budgetary instrumentarium. An own initiative opinion focused on the Performance-based EU Budget and its focus on real results – the key to sound financial management underlines especially the following results and conclusions:

• the EU Budgetary expenditures are not only to comply with the rules of legality and regularity, but there must also be a targeted and systematic focus on the results and performance the budget delivers in addressing the EU priority areas;
• adopting performance culture rules in relation to the EU Budget requires maintaining close linkage between the scope and nature of expenditure, on the one hand, and a comprehensive set of performance indicators for measuring results and performance, on the other hand. The performance culture is not acquired in a single step, but through a process of development that presupposes both the appropriate legal environment and the selection of tools for encouraging key actors to adapt the desired behavior;
• a budget conceived in these terms constitutes an instrument of EU fiscal policy for delivering real results and impacts in EU priority areas that bring a clearly quantifiable added-value. This means that any discussion of a performance-based EU Budget is also a discussion of EU policy priorities capable of bringing about the necessary structural changes;
• there is an enormous need for simplification as the EU Budget remains extremely complex in all manner of ways, which makes it difficult to manage effectively and to measure its real results and benefits. Simplification certainly does not mean to reduce the qualitative benchmarks and requirements; the contrary is true – simplification means a more open space for respecting qualitative standards.

The opening of this autumn EU season has brought a very intensive platform of many debates on this issue, incorporating into this other very important topics, like the debate on the revenue side, the budgetary flexibility during the medium-term period, compliance with the other transfers existing in the EU, among others. This is perhaps a sufficient number of evidence and rational arguments to declare that the EU Budgetary paradigm is really on crossroads. The consensus on result and performance focus would be a good precondition that after the EU Budget crosses the road, its next direction will be the correct one.
The EU Budget can constitute an essential tool in dealing with the EU ́s existing challenges and structural changes. The post-2020 multiannual financial framework should act, together with a new competitiveness and development strategy and the social rights pillar (currently in preparation) as a crucial medium-term strategic platform, with the structure and weighting of particular expenditure items adjusted to real-life needs and priorities.

Petr Zahradník,
EESC Member, Group I – Employers