The EU budget review

Elcano Royal Institute
Although it cannot be exactly considered as a highly salient topic in Spain, it is worth mentioning that the national preferences in the process of EU budgetary reform were published after the summer.[1] The conference held in Brussels on 12 November of 2008 marked the end of the public-debate phase that began with the European Commission’s presentation of an issues paper in September 2007. It also marked the beginning of a new phase in which the Commission is expected to present a White Paper in mid-2009, with discussion later among EU leaders. In this context, the Spanish government’s position on budgetary reform and in ensuing negotiations on financial prospects after 2014 will be different from that which it held in earlier discussions on budgetary issues. Although Spain has been a net beneficiary of EU funds since it joined the bloc, one can expect that, starting in 2013, it will achieve a net balance that is in equilibrium with regard to the EU. Thus, any budgetary reform that is agreed will have a significant effect on Spain. Reforming the income-and-spending aspect of the EU budget takes on special importance for Spain because of the financial implications that such changes might have in the context of future negotiations. Thus, the net balance depends not just on the future of the cohesion policy and possible new policies, but also on reforms of the Common Agriculture Policy (CAP), a hugely important part of the EU budget. In fact, Spain now receives more for agriculture than in structural funds, and that trend is going to continue in the coming years. On the other hand, the new position could be seen as a comfortable spot from which to launch initiatives, mainly in discussions on new policies, including the role played by the Lisbon Strategy, and on the future of the cohesion policy. The Spanish government might try to take advantage of its position and aim its focus on overall debate covering both EU revenues and expenditures in order to keep all its options open.[2]
The Spanish contribution to the process of consultation launched by the Commission stresses two lines or basic principles: fairness in revenues and quality in expenditure, and it is based on the position held in negotiations on Financial Perspectives for the period 2007-13, in which Spain has defended three basic principles, which are still valid: the ‘principle of sufficiency of budgetary means’, the ‘principle of fair distribution of the costs of enlargement’ and finally, in application of the ‘principle of gradualism’, in the last negotiations Spain defended the need for adequate transitional measures for those regions which lose their eligibility for the Cohesion Fund, either because of a ‘statistical effect’ or through natural growth. Regarding the spending side of the budget, new priorities to defend were introduced in the last negotiations and they stem from challenges such as migration since Spain considers it will be essential to develop a European immigration policy with specific goals and a budget with enough funding to respond to the challenge. Other new policies would be the promotion of renewable energies and investment in research, development and innovation (R+D+I).[3]
Precisely, the importance that the Spanish government gives now to bridging the ‘technological gap’ that exists between the North Western most developed countries of the EU and other member states – such as Spain –, is quite present in the current political discourse. The increase in budgetary resources available for technological innovation[4], the priority given to the Lisbon Agenda (which has continued during the Zapatero years despite the Strategy was originally set out in Lisbon in March 2000 within the framework of the mutual understanding between Tony Blair and José María Aznar), the creation of a new Ministry of Science and Innovation some months ago, as well as Spain’s efforts to serve as headquarters for the European Institute for Innovation and Technology are some examples of this priority which is obviously connected to the deep economic crisis and the need to change a growth model based on low skill labour and high weight of the construction sector during the last decade. However, to overcome the technological distance between Spain and the most advanced EU members requires much more effort.

[1] See the Spanish contribution to the response to the European Commission issues paper, available at: http// (last access: 30 March 2009).

[2] See Cristina Serrano and Mario Kölling, 2009, Spain and EU Budgetary Reform (Elcano Royal Institute WP 12/2009), available at: (last access: 30 March 2009).

[3] See Cristina Serrano and Mario Kölling, 2009 (ibidem).

[4] In recent years spending on R+D+I in Spain increased around 100%, achieving in 2007 a record of €6,450 million.