The EU budget for the next six years is a whopping 960 billion euros. That’s a significant amount of cash, though it’s worth bearing in mind that the Union’s budget is only 1% of the EU’s combined Gross Domestic Product (GDP) – whilst the average budget of a European government accounts for 44% of a country’s GDP. Moreover, the EU budget is actually shrinking in real terms compared to 2007-2013.
Still, we get a lot of comments wondering whether the EU is “worth taxpayers’ money”, so we thought we would try to get some responses. Whilst hunting for answers, we recently spoke to Michael Theurer, a German MEP who sits with the Liberal Democrats and is the Chair of the European Parliament’s Budgetary Control Committee.
We started with a comment from Catherine, who thought that the EU should better tackle mismanagement and waste in the budget. Michael Theurer agreed:
As President of the Budgetary Control Committee of the European Parliament, I would like to answer that Catherine is completely right and we have done precisely that with our new budget. We want to see “better spending” not “more spending”, so we reduced the EU budget from 980 billion euros in the period 2007-2013 to now 960 billion euros for 2014-2020.
Also, remember that most of the national budgets in the Member States are increasing, whilst the EU budget is now decreasing. So, that is a huge challenge because there is now less money in the budget so we have to focus the money to invest in future areas like research and investment in infrastructure. That was exactly what the Budgets Committee and Budgetary Control Committee proposed to the European Parliament and what is now imposed in the new compromise for the Multi-Annual Financial Framework.
Next, we had a question from Kevin, who wants to know when was “the last time the EU had its accounts signed off by the auditors?” In fact, the EU had its accounts signed off last year by the Court of Auditors, an independent body established in 1975 to check the accounts of EU institutions. Nevertheless, it’s true that the Court of Auditors sets an acceptable “error rate” of 2% and the EU has consistently failed to hit this target for the past 19 years (the error rate was 4.8% in 2012). So, how would Michael Theurer respond?
It’s not correct, as Kevin suggests, that this indicates fraud. It is true, however, that the accounts have had an error rate above 2% and the Court of Auditors has been calling on the Commission and – in particular – the Member States to find a solution to that. In fact, 80% of the EU’s budget is under “Shared Management”, which means it is under the administration of the Member States themselves, and the error rate comes into existence in the Member States at the beneficiary level. Nevertheless, from the European Parliament’s perspective it is really necessary that these errors are reduced. The European Parliament calls for improvements in financial management, and therefore we only granted discharge for the 2012 EU budget under political reservations.
Do YOU know how big the EU budget is compared to national budgets? Is it shrinking or growing? And do you think the EU budget is being spent wisely? Let us know your thoughts and comments in the form below, and we’ll take them to policy-makers and experts for their reactions.