Money for Europe won’t be raining from the sky!

What we all love about fairy tales is that they always have a good ending.  And given the actual situation the EU finds itself in, a fairy tale like ending would be desirable. A suitable example is the German fairy tale called “Sterntaler” which is about a poor lonely girl that gives away her last belongings – her last piece of bread, her hat, her skirt and her shirt – and thereupon the stars fall down from the sky and  turn into silver coins. All is well that ends well. At least in a fairy tale.

But as generally known we do not live in a fairy tale world and hence unexpected money raining down from above is unlikely. It is comprehensible, therefore, that critics turn louder asking how the new projects of the EU – especially the new European External Action Service (EEAS) – can be financed.

The current situation: The negotiations about the EU budget for the next seven years failed last Monday night. The European Parliament could not reach an agreement with the national finance ministers in the Council – their positions were too different.  As the European Commission and the Parliament asked for an increase of the budget by 6.19%, the Council agreed on a 2.91% increase. The council agreement on a 2.91% increase was the result of a previous British initiative during the last EU summit in October that gained support of 11 more Member States e.g. Germany, France and the Netherlands. According to EP President Buzek, the European Parliament approached to the Council and would have been ready to accept the limited increase by only 2.91% if it had received in return further rights, especially own resources (e.g. an EU tax). But this demand is on the other hand strictly opposed by the national Finance Ministers.

The Commission is now going to prepare a new budget draft – a time-consuming process. If the impasse continues, the 2011 EU budget will be maintained at this year’s level and disbursed monthly in 12 equal installments.. But this is the starting point of the underlying problem: the new institutions that are created by the Lisbon Treaty and that are to be set up in 2011 are not included in budget. And even if the EP and the Council can one day in the future find an agreement on a slight budget increase it is very doubtful whether this will be enough to finance the new European projects as for example the EEAS or the new European Financial Control. Member States take the easy way out. First they decide to create new institutions and then, they fail to allocate the necessary resources. Just as if they were waiting for unexpected money to rain down from heaven. An honest debate about the EEAS is necessary: We cannot send one-third of our national civil servants currently working for the external service to the EEAS, let Europe pay their salaries and at the same time fail to provide the EU with the required founding. To save money at the expense of the EU is not the way to build a strong global Europe.

But the message behind the conflict is even worse: For most of the Member States, Germany included, Europe is of little or even no value at all! Not even the political discussion about the direction the EU should take and about what the EU should be able to achieve – and which price this would have! This is a shame since there is – in the long run – no future beyond Europe, not even for Germany. But still this fact is not fully understood in Berlin (at least some people did not yet get it and many more often like to forget it) because Europe is complex and the sustainability of its advantages is often difficult to grasp. Hence, it is easier to have a Germany-as-net-contributor-discussion. Is there anybody who stands in for 1% of GDP? And that even additional 4 bn Euros for Germany (in case this is going to be reality) are a relatively small amount of money for this portion of “peace, freedom, rule of law and prosperity” on the European Continent, which are still unique in the entire world.

It seems as if the situation is convenient now to everyone. EU budget negotiations are postponed –Europe is adjourned while the rest of the world keeps on turning round. This is not just irresponsible but even dangerous.

Ulrike Guérot

About Ulrike Guérot

Ulrike Guérot is Senior Policy Fellow and Head of the Berlin Office of the European Council on Foreign Relations(ECFR). The office focuses on advocacy and research related to German-Franco relations, EU-US relations and the broader geo-strategic perspectives of the European Union at large. The office has built a high-level network with policy-makers, government officials, think-tankers and academics. Dr. Guérot is member of the executive board of Europa-Professionell.