Driving into the European quarter of Brussels, one does not see crisis. Construction cranes are everywhere. The new headquarters of EU President Herman Van Rompuy, estimated to cost 240mln euro, is slowly but surely being completed. This construction frenzy cannot cover up the EU's fragile foundations. The budget crisis is the next chapter in the permanent quarrel over money. The EU is trying to decide on a multiannual budget for 2014-2020, but leaders of governments are divided on the topic. At the same time, several correspondents in Brussels criticize the culture of spending of the European institutions.
The article by Nikolas Busse in the Frankfurter Allgemeine Zeitung (26-11-2012) called 'Spaceship Brussels' was right on the mark. 'No less than 21 of the 27 Member States have to reduce their budget deficit. The European Commission ordered Greece, Portugal and Ireland to lower the salaries of public servants or even had them fired. In these dire times Brussels in all seriousness demands a bigger budget for itself.' The Commission and the Parliament demand an increase of the multiannual budget of 5%. Busse: 'In a certain way British Prime Minister Cameron is right: Brussels is living in a parallel universe'.
The Budget Committee responded in disbelief. The German MEP Helga Trüpel, member of the Greens, called the European correspondents 'court writers'. 'They look to the European Council because that is where the power is. They are court writers who turn against us. The outside world isolates itself from us.' The Bulgarian socialist Ivailo Kalfin said: 'there is a political consensus emerging on the budget independent of us. It is the wrong consensus, but the public believes it. The public is wrong'.
The outside world is not alienating itself. It is the European representatives who alienate themselves from the outside world. The so-called court writers touched a sensitive issue. Last month the European Court of Auditors did not sign the accounts of the European Union. That is already the eighteenth time in a row. According to the Court of Auditors around four per cent of the budget is spent the wrong way. Something goes wrong in every budget, but in the EU it is a structural problem. The cause for this is that Brussels focuses solely on the quantity of the budget (150bln euro next year) and neglects the quality.
The true democratic deficit in the EU is what Busse calls the 'egocentrism of the European institutions'. He is right. The bureaucracies of the institutions legitimate themselves as the source of European integrity and view the budget as their tool. Brussels develops the mentality of a state planning office in this process. Member States transfer an increasing amount of money to 'Brussels', which then determines who gets what and for what purpose, through a set of detailed rules. This bureaucratic centralism spawns a non-transparent subsidy-industry incomprehensible to citizens.
Thousands of dairy farmers protested in Brussels last week, while 42% of the EU budget goes to the Common Agricultural and Fishery Policy. Everyone thinks: 'those farmers are living the good life'. Yet in fact 80% of the European farmers get no more than 20% of the agricultural subsidies. The largest part goes to big agricultural corporations and above all to the food industry, mostly multinationals. Angry farmers sprayed milk against the walls of the Parliament: they demanded 40 cents per liter. They feel milked by the agro-industry.
In the sector of structural funds (36% of the budget) one finds an enormous flaw. In the period 2014-2020 the European Commission wants to spend 376 billion on poor regions. No less than 40% of this sum goes to rich countries. The multiannual budget of 2007-2013 foresees 35bln for Spain, 26bln for Germany and 14bln for France. This is a needless circulation of money which creates a lucky dip effect. Rich countries try to pay as little as possible to Brussels, and subsequently try to rake in as much as possible. It would be more efficient to limit structural funds to the poorest regions of Europe. Rich countries take care of their own poor regions; they will then pay less to the EU, while poor countries keep their support to the regions. Budget problem solved!
The European ambition to be the largest financial donor in the world - the empire of good intentions - is also misplaced. In the new multiannual financial framework Brussels wants to increase aid to neighbours and the third world from 78bln to 96bln Euros. An increase of 22 percent! The EU however cannot find enough good projects. Yet the money has to go out and the EU resorted to budget support to 34 countries on the basis of 'good governance', among them Haiti, Sierra Leone and Mali. Rwanda gets budget support as well, even though the British government recently stopped its bilateral aid because Rwanda finances rebels in Eastern Congo. Rwanda is the source of many Congolese miseries. In the neighbourhood policy Ben Ali's Tunisia received 61mln and Mubarak's Egypt 107mln. Both regimes are now in the dustbins of history.
If the European institutions want to escape their isolation, they will have to take a better look at the quality of the budget, instead of demanding more tax money for excessive and often conceited ambitions.