Jorge Núñez Ferrer, CEPS; jorge.nunez@ext.ceps.eu

Presentation for the European Parliament lunch seminar 2 February 2010

PreludePrelude

• EU is inefficiently using its aggregate EU is inefficiently using its aggregate public resources and those are often public resources and those are often incoherent with objectivesincoherent with objectives

• The EU budget is also used inefficiently The EU budget is also used inefficiently and is thus underminedand is thus undermined

• MEMBER STATES AND THE EU NEED MEMBER STATES AND THE EU NEED A RESTRUCTURING OF PUBLIC A RESTRUCTURING OF PUBLIC EXPENDITURESEXPENDITURES

Aggregate EU public expenditure vs. Switzerland and Canada

SOCIAL EXPENDITURE

41,4% 20,8%

20,7%

Competitiveness and growth

15,2% 30,1% 20,2%

Source: Centre d’Analyse Strategique (2009), Scoreboard of public spending in the European Union and its Member States, Paris

EU BUDGET• Best role is leverage and solidarity• CAP is too heavy and too big as a

share of the EU budget, not necessarily EU public expenditure

• Use budget for leverage and solidarity also for the CAP (different co-financing rates depending GNI or GDP)

• Competitiveness concerns imaginary, CAP is today completely unfairly distributed, ironically co-financing can reduce unfairness.

• CAP and budget can free themselves from present policy straightjacket.

CAP pillars 1&2

CLIMATE AND BUDGET• CLIMATE CHANGE IS A HORIZONTAL

PROBLEM• ENSURE COHERENCE WITH CLIMATE

OBJECTIVES (and other objectives too)

• MAXIMISE LEVERAGE INSTRUMENTS, use EIB, PPPs etc.

• IMPROVE STRATEGIC PLANING AND EVALUATION

R&D• The SET Plan needs sufficient resources• Ensure ADDITIONALITY – funds have to focus

on R&D where risks too high or maturity of technology too far into the future.

• Fund large scale demonstrations • IMPROVE participation of PRIVATE SECTOR• FOLLOW UP projects after completion• Find cause of low PRIVATE R&D in Europe

Single market in Energy• High level of renewables needs large

integrated grids. • Energy savings and more energy security

can be achieved with a single European energy market.

• TEN-E needs to be reinforced and HVDC lines installed where needed. Most assistance for cross border and cohesion countries (with cohesion funds).

COHERENCE & FOCUS• ALL POLICIES NEED TO BE COHERENT WITH

EMISSION OBJECTIVES!• EU PUBLIC PROCUREMENT RULES: Should

require appropriate technologies from contractors• Emission impacts need to be integrated, as well

as impacts of climate changes on infrastructure use and depreciation

• Concentrate on resource use, ecosystem management, and on fast practical side: reinforce action for waste management (methane)

Agriculture• Emission reduction potential in the case of

the EU agricultural sector is limited

• But LAND MANAGEMENT needs further exploring, explore carbon capture potential (could be integrated into ETS)

• ADAPTATION has to be central in future policy, explore private insurance schemes with state guarantees.

BETTER STRATEGIESBETTER STRATEGIES• Integrate climate objectives in member

states development strategies effectively• Combine EU budget, EIB, national and

private funds to develop low carbon zones. – Showcases, good for green jobs, investment and promoting EU technologies. In line with Lisbon and Gothenburg strategy

• EU and national strategic potential need improvement: Better targeting, better evaluation and a culture of results not fund absorption is needed

EXTERNAL ACTION• Copenhagen has shown us what happens

if EU does not have a single face, a single voice and a single VISIBLE financial tool.

• One financial channel and one common position will be important to influence global policy.

• Financing: ETS is the most obvious candidate. It fulfils criteria for EU own resources better than most other options.

http://www.ceps.be/book/future-sustainable-competitive-and-greener-eu-budget-integrating-climate-change-objectiveshttp://www.sieps.se/en/publications/rapporter/can-reforming-own-resources-foster-policy-quality.htmlhttp://www.europarl.europa.eu/activities/committees/studies/download.do?language=en&file=20293#search=%20value

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