The EU’s Financial Perspective (2014–2020)

Development and Finance from issue 2011/1
András István Türke
- Abstract -

In order to understand better the debates within EU institutions and positions of EU Member States’ as regards 2014-2020 financial perspective the interests of net contributors to the common budget
should be considered.

1. It seems very likely that the current 1% budget ceiling remains unchanged and Germany does not allow it to increase. There are, however, new factors as well that have to be taken into account. It was a common knowledge that Germany has been traditionally against the CAP and it would prefer more competitive and liberal solutions. Despite this traditional view German attack against CAP is unlikely.
2. During the debates of previous budget perspective EU15 countries realised that after enlargements they would be pushed out from structural actions (structural funds and the cohesion fund) in favour of poorer regions. In 2004 they found two immediate responses: (1) they maintained the same EU budget limit (the EU15 limit remained for EU25 and later for EU27, and (2) they started a new financial policy the aim of which was to retain the maximum possible EU funds at national level and using them for own investments and regions.
3. Later on other items of the common budget gained importance as channels for getting additional resources (and they are not bound to development level): the CAP was a logical field for Germany.
4. As regards the French the changes were even more pronounced than in Germany, as the weight of France in the EU budget changed significantly. This partly resulted in increasing financial involvement and led to more difficult domestic political situation.

In spite of the fact that several countries have already elaborated detailed opinions, the German position is still not clear; they are, however, perfectly aware that their behaviour is decisive as regards the future of the budget. Their share decreased by one third and their interest turned to fields that were not important for them previously (CAP). It is also a fact that according to GNI/capita and GNI France’s contribution is the highest in the EU budget. However it is probably not enough to increase its weight in decision making. Steps of Sarkozy have worsened the French-German relation and France can easily be isolated during the next budget debate.

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