SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Europaudvalget 2011-12, Beskæftigelsesudvalget 2011-12, Socialudvalget 2011-12, Finansudvalget 2011-12
EUU Alm.del Bilag 264, BEU Alm.del Bilag 88, SOU Alm.del Bilag 178, FIU Alm.del Bilag 108
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DIRECTORATE GENERAL FOR INTERNAL POLICIES

POLICY DEPARTMENT D: BUDGETARY AFFAIRS

Creating greater synergy between European

and national budgets

STUDY

Abstract:

This study analysed spending at both EU and national levels in the following policy areas:

education and training, social policy, research and development, humanitarian aid and

common and foreign security policy. It also reviewed the mechanisms and processes aiming

at ensuring budget coordination between the two levels.

While the policy priorities of the Member States under scrutiny are congruent with those of

the EU, the overall synergy between strategic EU policy objectives and budgetary policies is

weak. Recommendations are made that could enhance budgetary coordination between the

two levels.

PE 411.277

10/05/2010

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

This document was requested by the European Parliament's Committee on Budgets. It designated

Mr Lamassoure, MEP, to follow the study.

AUTHOR(S)

Deloitte Consulting

Berkenlaan 8 C, B- 1831

Diegem- Belgium

RESPONSIBLE ADMINISTRATOR

Mr François JAVELLE

Policy Department Budgetary Affairs

European Parliament

B-1047 Brussels

E-mail:

[email protected]]

LINGUISTIC VERSIONS

Original: EN

ABOUT THE EDITOR

To contact the Policy Department or to subscribe to its monthly newsletter please write to:

poldep-

[email protected]

Manuscript completed in May 2010.

Brussels, © European Parliament, 2010.

This document is available on the Internet at:

http://www.europarl.europa.eu/studies

DISCLAIMER

The opinions expressed in this document are the sole responsibility of the author and do not

necessarily represent the official position of the European Parliament.

Reproduction and translation for non-commercial purposes are authorized, provided the source is

acknowledged and the publisher is given prior notice and sent a copy.

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Creating greater synergy between European and national budgets

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TABLE OF CONTENTS

EXECUTIVE SUMMARY

RÉSUMÉ

ZUSAMMENFASSUNG

OBJECTIVE OF THE STUDY

METHODOLOGY

2.1. Analysis of available public expenditure figures

2.2. Face-to-face interviews

COORDINATION AND COMPLEMENTARITIES IN SPENDING PATTERNS

3.1. Analysis of the EU budget and its level of implementation (2007-2009)

3.2. Analysis of national budgets and their level of implementation

3.3. Distribution of public expenditure between Member States and EU level

3.4. Conclusions on congruence between national and EU policies and budgets

ANALYSIS OF THE BUDGETARY COORDINATION MECHANISMS BETWEEN NATIONAL AND

EU BUDGETS

4.1. The context: relative size of the EU budget

4.2. Support for enhanced budgetary coordination

4.3. Overall lack of formal budgetary coordination mechanisms

4.4. Indirect budget coordination: a multi-layer approach to European public finance

4.5. Analysis of the leverage effect of EU co-financing requirements on the mobilisation of

national public resources

4.6. Conclusions on available coordination mechanisms between EU and national budgets

100

103

105

106

110

CONCLUSIONS AND RECOMMENDATIONS

5.1. Conclusions

5.2. Recommendations

ANNEX 1: METHODOLOGY

1.1. Analysis of available public expenditure figures

1.2. Overview of data selection and data availability

1.3. Face-to-face interviews

1.4. Analysis of the EU budget and its level of implementation

1.5. List of interviewees

ANNEX 2: CORRESPONDENCE OF THE SELECTED CATEGORIES OF EXPENDITURE TO COFOG

CATEGORIES

113

ANNEX 3: DATA ON PUBLIC EXPENDITURE IN R&D

116

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ANNEX 4: DATA ON PUBLIC EXPENDITURE IN EDUCATION

ANNEX 5: DATA ON PUBLIC EXPENDITURE IN SOCIAL POLICY

ANNEX 6: DATA ON PUBLIC EXPENDITURE IN HUMANITARIAN AID

118

120

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EXECUTIVE SUMMARY

This study analysed spending both at EU and national levels in a number of policy areas: education

and training, social policy, research, development and humanitarian aid, common and foreign

security policy. It also reviewed the mechanisms and processes aiming at ensuring budget

coordination between the two levels. The analysis covered the guiding budgetary and policy

objectives for the five areas based on research in four Member States - Belgium, France, Slovenia

and Portugal. Based on a literature review and interviews with officials at both EU and Member

State level, current mechanisms and procedures for coordinating EU and national expenditure

were evaluated, as were the reasons for the general lack of synergy between the European and

national levels.

The EU budget expenditure only accounts for approximately 2% of total public expenditure in the

EU. The share of EU expenditure in total public expenditure is particularly modest, relative to

national expenditure, in social policy, education, and foreign/security policy. It is relatively higher in

development aid and R&D.

The overall synergy between strategic EU policy objectives and budgetary policies is weak. Only a

modest part of the EU budget is spent on activities that contribute to the realisation of the Lisbon

strategy. And at Member State level, apart from some exceptions – mainly found in regional policy

- national budgets seldom refer to their contribution to achieving the objectives of the Lisbon or

other EU strategies.

In general, the policy priorities of the four Member States in the five policy areas are congruent

with those of the EU, particularly, in the areas of development aid and foreign/security policy. All

Member States are committed to achieve UN Millennium Goals and support the European

Consensus on Development. In education and social policy, lifelong learning and enhancing the

flexibility and employability of workers are increasingly important, in line with EU policies, in all

four Member States. Furthermore, with regard to R&D, Member States are increasingly aligning

their R&D strategy and national funding methods with the objectives and functioning of the EU

research programme. As might be expected, alignment of policy priorities is strong in policy areas

– such as cohesion policy - where eligibility for EU funding is subject to co-financing requirements.

This is particularly the case in Member States, where the relative share of EU expenditure in public

spending is higher.

Interviewees agree that given the current economic and financial crises and scarcity of financial

resources, there is a strong need for better coordination both between policy objectives at EU level

(e.g. Lisbon and EU 2020 objectives, European Consensus on Development, etc.), but also between

European and national policy objectives in many areas. Such coordination would lead to greater

synergy between European and national level spending, while respecting and strengthening

subsidiarity, additionality, European value added and the advantages of economies of scale.

While few examples of formal budgetary coordination mechanisms could be identified, this does

not mean that there is no coordination at all. National governments cannot ignore EU public

spending policy. National budgetary strategies increasingly seek EU funds to complement their

own efforts.

In theory, the EU and the Member States coordinate their policies through a wide range of often

implicit mechanisms, such as networks, benchmarking practices and peer reviews, the Broad

Economic Policy Guidelines and the Open Method of Coordination. Although interviewees

recognised the relevance of coordination mechanisms for creating budget synergies, they admit

that they are rarely put into practice. The BEPG, and the Open Method of Coordination more

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Policy Department D: Budgetary Affairs

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generally, are regarded as instruments with limited coordination and convergence effects, as they

lack sanction mechanisms.

Also disconnections between the budgetary procedures in the Member States and those at EU

level are put forward as a reason for the current lack of budget synergy. Basic issues such as length

and timing of budget cycles and the absence of an agreed Europe-wide standard budget structure,

complicate the search for synergy.

Co-financing requirements, related to some types of EU funding lead to some extent to

reorientation of national expenditures and a de facto reorientation of policy priorities of the

Member States. This is particularly the case in Member States who depend more on EU budgetary

transfers than others.

In social policy, co-financing requirements of the ESF and ERDF result in an increased alignment of

policy priorities between both levels and affect national budgets. However, this positive leverage

effect is limited and less visible in Member States who receive relatively little money, like France

and Belgium.

Concerning R&D, there is evidence of increasing alignment between the national and EU budgets,

since the financial resources of FP7 increased substantially, making it relatively more important as a

part of total funding for research.

In education, Member States are not obliged to supplement EU expenditure. The leverage effect of

EU funding is mainly limited to enhanced policy coordination, for example through benchmarking

practices.

In development aid, several Member States transfer parts of their national development aid to the

EU to be managed for EU purposes by the European Commission. This is an interesting example of

Member States seeking to achieve greater impact by exploiting the economies of scale that

pooling development aid funds creates.

In the field of foreign and security policy, there is limited evidence of budgetary coordination

between the EU and national budgets. Foreign and security policy is still highly regarded as a

policy area with a strong national dimension, despite the growing alignment of policy priorities at

EU level. In both development and foreign/security policy, the creation of the European External

Action Service will offer an excellent opportunity to create greater coordination.

The following recommendations could enhance budgetary coordination between the EU budget

and national budgets:

First, the transparency and visibility of budgetary coordination between both levels could be

enhanced by

aligning the categories of expenditure at national and EU budget level.

An aggregate

analysis of European public finance –requiring high quality and comparable data on the functional

breakdown of government expenditure - is currently lacking. As it does for the national budgets,

Eurostat could also align the current categories of expenditure of the EU budget with the COFOG

categories - without changing the EU budget structure - , in order to be able to compare national

and EU public expenditure simultaneously within one analytical framework.

Second, Member State authorities could agree to include an overview of their financial

commitments and efforts to the realisation of the EU objectives and strategies in their national

budgets. This would provide an opportunity for governments and parliaments to relate national

objectives to agreed commitments at EU level. It would also establish a framework within which EU

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and national expenditure could be set, and would provide an insight into the financial leverage

effects of EU funding instruments.

Third, the national parliaments and the European Parliament should work together to enhance

budgetary coordination between both levels. In addition to the existing forum at Council level,

discussions between EU and national parliaments – which both have budgetary powers – could be

an effective means to find ways forward with regard to enhanced budgetary coordination and to

stimulate national authorities to consider EU expenditure at the level of national budgets with

more attention. Such discussions could also focus on the weaknesses that were identified in this

report and on the coordination that is needed for specific categories of expenditure.

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RÉSUMÉ

Cette étude a analysé les dépenses aux niveaux Européen et nationaux dans un certain nombre de

domaines politiques : éducation/formation, politique sociale, recherche, aide humanitaire et au

développement, politique étrangère et de sécurité commune (PESC). Elle a également passé en

revue les mécanismes et les processus visant à assurer la coordination budgétaire entre les deux

niveaux. L'analyse a couvert les objectifs principaux en matière politique et budgétaire pour les

cinq domaines sur base d’une recherche dans quatre Etats membres - Belgique, France, Slovénie et

Portugal. Basé sur une revue de la littérature et des entrevues avec des fonctionnaires de l'UE et au

niveau des États membres, les mécanismes et les procédures usuels mis en place pour coordonner

les dépenses entre l'UE et les Etats membres ont été évalués, de même que les raisons du manque

général de synergie entre les niveaux Européen et nationaux.

Les dépenses budgétaires de l’UE ne contribuent qu’à approximativement 2% des dépenses

publiques totales au sein de l'UE. La part des dépenses de l'UE dans les dépenses publiques totales

est particulièrement modeste, dans la politique sociale, l'éducation, et la politique étrangère et de

sécurité. Elle est relativement plus élevée dans l'aide au développement et dans la R&D.

La synergie globale entre les objectifs stratégiques politiques de l'UE et les politiques budgétaires

est faible. Une part modeste du budget de l'UE est dépensée en activités qui contribuent à la

réalisation de la stratégie de Lisbonne. Et au niveau des États membres, hormis quelques

exceptions - principalement trouvées dans la politique régionale - les budgets nationaux se

réfèrent rarement à leur contribution à l’atteinte des objectifs de Lisbonne ou à d'autres stratégies

de l'UE.

Généralement les priorités politiques des quatre Etats membres dans les cinq domaines analysés

sont conformes à celles de l'UE, en particulier, dans les domaines de l'aide au développement et de

la politique étrangère et de sécurité. Tous les Etats membres se sont engagés à atteindre les

objectifs du millénaire de l'ONU et à soutenir le Consensus Européen pour le Développement. En

matière d'éducation et de politique sociale, la formation permanente et l'amélioration de la

flexibilité et de l'employabilité des travailleurs sont de plus en plus importantes, en conformité

avec des politiques de l'UE, et ce pour chacun des quatre Etats membres. En outre, en ce qui

concerne la R&D, les Etats membres alignent de plus en plus leur stratégie et méthodes de

financement nationales avec les objectifs et le fonctionnement du programme de recherche de

l'UE. Comme on aurait pu s'y attendre, l'alignement des priorités politiques est important dans des

domaines - tels que la politique de cohésion - où l'éligibilité au financement de l'UE est sujette à

des conditions de cofinancement. C'est en particulier le cas dans les Etats membres où la part

relative de l'UE dans les dépenses publiques totales est la plus élevée.

Les personnes interviewées conviennent qu'étant donné la crise économique et financière actuelle

et la pénurie de ressources financières, il existe un besoin fort pour une meilleure coordination à la

fois entre les objectifs politiques au niveau communautaire (par exemple ceux de Lisbonne et de la

Stratégie EU-2020, le Consensus Européen pour le Développement, etc.), mais également entre les

objectifs politiques européens et nationaux dans de nombreux domaines. Une telle coordination

mènerait à une plus grande synergie entre les dépenses européennes et nationales, tout en

respectant et renforçant la subsidiarité, la complémentarité, la valeur ajoutée européenne et les

avantages liés aux économies d'échelle.

Bien que peu d'exemples des mécanismes budgétaires formels de coordination aient pu être

identifiés, ceci ne signifie pas qu'il n'y a pas de coordination du tout. Les gouvernements nationaux

ne peuvent pas ignorer la politique de financement public de l'UE. Les stratégies budgétaires

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nationales sont de plus en plus à la recherche de fonds Européens pour compléter leurs propres

efforts.

En théorie, l'UE et les Etats membres coordonnent leurs politiques au travers d’un éventail de

mécanismes souvent implicites, tels que les réseaux, le benchmarking des bonnes pratiques et des

évaluations par les pairs, les Grandes Orientations de Politique Economique et la Méthode Ouverte

de Coordination. Bien que les personnes interviewées reconnaissent la pertinence des mécanismes

de coordination pour créer des synergies budgétaires, elles admettent qu'ils sont rarement mis en

pratique. Les GOPE, et plus généralement la Méthode Ouverte de Coordination, sont considérés

comme des instruments avec des effets limités en termes de coordination et de convergence, car

ils manquent des mécanismes de sanction.

De plus, les déconnexions entre les procédures budgétaires dans les Etats membres et ceux au

niveau communautaire sont pointés comme une source fréquente de manque de synergie

budgétaire. Les questions fondamentales telles que la durée et la synchronisation des cycles

budgétaires et l'absence de structure budgétaire standard Européenne rendent la recherche de

synergie plus difficile.

Les conditions de cofinancement en vigueur pour certains domaines de dépenses de l'UE

conduisent dans une certaine mesure à une réorientation des dépenses nationales et, de fait, des

priorités politiques des Etats membres. C'est en particulier le cas dans les Etats membres qui

dépendent davantage des transferts budgétaires de l'UE.

En matière de politique sociale, les conditions de cofinancement du FSE et de FEDER a pour effet

un accroissement de l’alignement des priorités politiques entre les deux niveaux et ont un effet sur

les budgets nationaux. Cependant, cet effet de levier positif est limité et moins visible dans les Etats

membres qui reçoivent relativement peu d'argent, comme la France et la Belgique.

Pour ce qui concerne la R&D, il est certain que l'alignement entre les budgets nationaux et de l'UE

va croissant depuis que les ressources financières du PC7 ont augmenté sensiblement, le rendant

relativement plus important comme part du financement de la recherche.

En termes d'éducation, les Etats membres ne sont pas obligés de compléter les dépenses de l'UE.

L'effet de levier du financement communautaire est principalement limité à une meilleure

coordination des politiques, par exemple par des pratiques de benchmarking.

Pour l'aide au développement, plusieurs Etats membres transfèrent une part de leur aide nationale

au développement vers l'UE en vue d’être gérée en fonction des objectifs de l'UE par la

Commission européenne. C'est un exemple intéressant de cas où lesEtats membres cherchent à

obtenir un plus grand impact en exploitant les économies d'échelle créées par la mise en commun

des fonds d'aide au développement.

Dans le domaine de la politique étrangère et de sécurité, il y a peu d'élément qui démontrent une

quelconque coordination budgétaire entre l'UE et les budgets nationaux. La politique étrangère et

de sécurité est encore largement considérée comme un domaine politique avec une dimension

nationale forte, en dépit de l'alignement croissant des priorités politiques au niveau

communautaire. Dans le développement de ces politiques, la création du Service Européen

d'Action Externe donnera une excellente opportunité de créer une plus grande coordination.

Les recommandations suivantes pourraient accroître la coordination budgétaire entre le budget

d'UE et les budgets nationaux :

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D'abord, la transparence et la visibilité de la coordination budgétaire entre les deux niveaux

pourraient être augmentées en

alignant les catégories de dépense des budgets nationaux et de l'UE.

Une analyse agrégée des finances publiques européennes - exigeant des données de haute qualité

et comparables sur l’analyse fonctionnelle des dépenses publiques - manque actuellement..

Comme il le fait pour les budgets nationaux, Eurostat pourrait également aligner les catégories

usuelles de dépenses budgétaires de l'UE avec les catégories de COFOG - sans changer la structure

budgétaire de l’UE-, afin de pouvoir comparer les dépenses publiques nationales

communautaire au travers d'un cadre analytique commun.

En second lieu, les Etats membres pourraient accepter d'inclure une vue d'ensemble de leurs

engagements financiers et efforts à la réalisation des objectifs et stratégies de l'UE dans leurs

budgets nationaux. Cette démarche présenterait un moyen pour les gouvernements et les

parlements de rapprocher leurs objectifs nationaux des engagements convenus au niveau

communautaire. Cela permettrait aussi d’établir un cadre dans lequel pourraient être placées les

dépenses nationales et communautaires, et fournirait un aperçu des effets de levier des

instruments de financement de l'UE.

Troisièmement, les parlements nationaux et le Parlement européen devraient travailler ensemble

pour augmenter la coordination budgétaire entre les deux niveaux. En plus du forum existant au

niveau du Conseil, les discussions entre l'UE et les parlements nationaux - qui tous deux ont des

pouvoirs budgétaires - pourraient constituer un moyen efficace pour trouver des modalités en vue

d’augmenter la coordination budgétaire et pour stimuler les administrations nationales à prendre

en considération, avec plus d’attention, les dépenses de l'UE au niveau des budgets nationaux. De

telles discussions pourraient également se concentrer sur les faiblesses identifiées dans ce rapport

et sur la coordination nécessaire pour des catégories de dépense spécifiques.

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ZUSAMMENFASSUNG

In dieser Studie werden die Ausgaben bezüglich verschiedener politischer Bereiche sowohl auf EU-

Ebene als auch auf nationaler Ebene analysiert: Aus- und Weiterbildung, Sozialpolitik, Forschung,

Entwicklungshilfe und humanitäre Hilfe, Gemeinsame Außen- und Sicherheitspolitik (GASP).

Außerdem hat sie Methoden und Verfahren mit dem Ziel, eine Budgetkoordinierung zwischen

beiden Ebenen zu gewährleisten, überprüft. Die Analyse umfasst die führenden budgetären und

politischen Ziele der fünf Bereiche, basiert auf Untersuchungen in vier Mitgliedstaaten – Belgien,

Frankreich, Slowenien und Portugal. Beruhend auf Literaturdurchsichten und Befragungen von

Beamten/Bediensteten sowohl auf EU-Ebene als auch auf der Ebene der Mitgliedsstaaten wurden

die gängigen Methoden und Abläufe zur Koordination von EU- und nationalen Ausgaben

ausgewertet, ebenso wie auch die Gründe des generellen Synergiemangels zwischen der

europäischen und nationalen Ebene untersucht wurden.

Die EU-Haushaltsausgaben machen nur ca. 2% der gesamten öffentlichen Ausgaben in der EU aus.

In der Sozialpolitik, der Bildung und der externen Sicherheitspolitik ist der EU-Ausgabenanteil an

den gesamten öffentlichen Ausgaben besonders bescheiden. Er ist relativ gesehen in der

Entwicklungshilfe und in Forschung & Entwicklung höher.

Die Gesamtsynergie zwischen strategischen EU-politischen Zielen und der Budgetpolitik ist

schwach. Nur ein bescheidener Teil des EU-Budgets wird für Aktivitäten ausgegeben, die zur

Realisierung der Lissabon-Strategie beitragen. Auf Ebene der Mitgliedsstaaten nehmen, abgesehen

von einigen Ausnahmen – hauptsächlich festgestellt in der Regionalpolitik – die nationalen

Budgets selten Bezug auf ihren Beitrag zur Verwirklichung der Zielsetzungen von Lissabon oder

anderer EU-Strategien.

Generell stimmen die politischen Prioritäten der vier Mitgliedsstaaten mit jenen der EU überein, vor

allem in dem Bereich der Entwicklungshilfe und der externen Sicherheitspolitik. Alle

Mitgliedsstaaten sind engagiert, die Milleniums-Entwicklungsziele (MDG) zu erreichen und den

Europäische Konsens über die Entwicklungspolitik zu unterstützen. Einhergehend mit der EU-

Verfassung sind in allen vier Mitgliedsstaaten die Bildungs- und Sozialpolitik, sowie das

lebenslange Lernen und die Verbesserung der Flexibilität und der Arbeitsvermittlung der

Arbeitnehmer zunehmend wichtiger. In Hinblick auf Forschung und Entwicklung stimmen die

Mitgliedsstaaten weiterhin ihre Forschungs- und Entwicklungsstrategie und nationale

Finanzierungsmethoden verstärkt mit den Zielen und der Funktionsweise des EU-

Forschungsprogramms ab. Wie zu erwarten, ist die Abstimmung von strategischen Prioritäten stark

in Politikbereichen – wie z.B. in der Kohäsionspolitik – bei denen eine Teilnahmeberechtigung zur

EU-Finanzierung von den Erfordernissen der Kofinanzierung abhängig ist. Dies ist vor allem in den

Mitgliedsstaaten der Fall, bei denen der jeweilige Anteil der EU-Ausgaben für öffentliche Ausgaben

höher ist.

Die in Interviews Befragten stimmen überein, dass in Zeiten der gegenwärtigen wirtschaftlichen

und finanziellen Krisen und der Knappheit von Finanzmitteln ein starkes Bedürfnis sowohl für eine

bessere Koordination der strategischen Ziele auf EU-Ebene (d.h. Lissabon- und EU-2020-Ziele,

Europäischer Konsens über die Entwicklungspolitik, etc.) als auch der Europäischen und nationalen

politischen Ziele auf verschiedenen Gebieten besteht. Eine solche Koordination würde zu einer

größeren Synergie zwischen den Ausgaben auf europäischer und nationaler Ebene durch das

Berücksichtigen und Intensivieren von Subsidiarität, Zusätzlichkeit, Europäischem Mehrwert und

von Einsparungen aufgrund von Größenordnungseffekten führen.

Obwohl nur wenige Beispiele von formalen budgetären Koordinationsmethoden identifiziert

werden konnten, bedeutet dies nicht, dass eine Koordination gänzlich fehlt. Nationale

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Regierungen können die EU-Politik für öffentliche Ausgaben nicht ignorieren. Nationale budgetäre

Strategien streben verstärkt EU-Finanzmittel an um ihre eigenen Leistungen zu vervollständigen.

Theoretisch koordinieren die EU und die Mitgliedsstaaten ihre Haushaltspolitik durch eine breite

Auswahl von oft impliziten Methoden, wie zum Beispiel durch Networking, Benchmark-Methoden,

Peer Reviews, die Grundzüge der Wirtschaftspolitik und die Offene Methode der Koordinierung.

Obwohl die Befragten die Bedeutung von Koordinierungsmethoden zur Erstellung von Synergien

im Haushaltsbereich anerkannten, gaben sie zu, dass sie selten in die Tat umgesetzt werden. Die

Grundzüge der Wirtschaftspolitik und die Offene Methode der Koordinierung im Allgemeinen

werden als Instrumente mit begrenzten Koordinations- und Konvergenzwirkungen betrachtet, da

sie keine Sanktionsmechanismen vorsehen.

Auch Abkopplung bzw. ein Mangel an Synchronisation zwischen Haushaltsverfahren in den

Mitgliedsstaaten und auf EU-Ebene werden als Grund für das gegenwärtige Fehlen von Synergie

im Haushaltsbereich vorgebracht. Zentrale Themen wie Länge und zeitliche Planung der

Budgetzyklen und das Fehlen einer europaweit angenommenen standardisierten

Haushaltsstruktur kompliziert die Suche nach Synergie.

Anforderungen zur Kofinanzierung in Zusammenhang mit einigen Arten von EU-Finanzierungen

führten teilweise zu einer Neuorientierung der nationalen Ausgaben und einer de facto

Neuorientierung von politischen Prioritäten der Mitgliedstaaten. Dies ist vor allem in

Mitgliedstaaten der Fall, die mehr von EU-Budgetüberweisungen abhängig sind als andere.

In der Sozialpolitik resultieren Anforderungen zur Kofinanzierung beim ESF (Europäischer

Sozialfond) und beim EFRE (Europäischer Fonds für regionale Entwicklung) in einer verstärkten

Anpassung von politischen Prioritäten zwischen beiden Ebenen und beeinflussen die nationalen

Budgets. Allerdings ist diese positive Hebelwirkung begrenzt und weniger in Mitgliedsstaaten

sichtbar, die relativ wenig Geld erhalten, wie beispielsweise Frankreich und Belgien.

Im Bereich Forschung und Entwicklung gibt es eine zunehmende Anpassung von nationalen und

EU-Budgets, da die Finanzmittel des 7. Rahmenprogramms (RP7) wesentlich gestiegen sind, so

dass dieses einen relativ gewichtigeren Anteil an der Gesamtfinanzierung für Forschung bekam.

Im Bereich der Ausbildung sind die Mitgliedsstaaten nicht verpflichtet, die EU-Ausgaben zu

ergänzen. Die Hebelwirkung der EU-Ausgaben ist hauptsächlich auf eine verbesserte strategische

Koordination begrenzt, zum Beispiel durch Benchmark-Methoden.

Bei der Entwicklungshilfe transferieren verschiedene Mitgliedsstaaten Teile ihrer nationalen

Entwicklungshilfe an die EU, damit sie für EU-Zwecke durch der Europäischen Kommission

verwalten werden. Dies ist ein interessantes Beispiel dafür, dass Mitgliedsstaaten danach trachten,

eine größere Wirkung durch Ausschöpfen von Größenordnungseffekten zu erreichen, wie sie

durch die Bündelung von Entwicklungshilfemitteln erreicht werden.

Im Bereich der Außen- und Sicherheitspolitik bestehen nur geringe Anzeichen von

Budgetkoordinierung zwischen der EU und nationalen Haushalten. Außen- und Sicherheitspolitik

wird immer noch in hohem Maße als ein Politikfeld mit starker nationaler Dimension betrachtet,

trotz der wachsenden Abstimmung von strategischen Prioritäten auf EU-Ebene. Sowohl bei der

Entwicklungspolitik als auch bei der Außen- und Sicherheitspolitik wird die Errichtung des

Europäischen Auswärtigen Dienstes eine ausgezeichnete Gelegenheit zur besseren Koordinierung

bieten.

Die Koordination zwischen nationalen Haushalten und dem EU Budget könnte durch folgende

Empfehlungen verbessert werden:

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Erstens könnten die Transparenz und Sichtbarkeit der Haushaltskoordination zwischen beiden

Ebenen durch eine

Anpassung der Budgetausgabenkategorien auf nationaler - und EU-Ebene

verstärkt werden. Es mangelt an einer konsolidierten Analyse öffentlicher Finanzen in Europa. Für

diese werden qualitativ hochwertige und vergleichbare Datensätze zur funktionalen Aufteilung

öffentlicher Ausgaben benötigt. Ein Vergleich öffentlicher Ausgaben der EU-Mitgliedstaaten ist mit

Hilfe einer funktionalen Aufteilung mit der COFOG Methode (Classification of Functions of

Government) möglich. Um die öffentlichen Staats- und EU-Ausgaben innerhalb

eines

analytischen

Rahmens zu vergleichen, könnte Eurostat auch, wie es bereits für die nationalen Haushalte

durchgeführt wird, die jetzigen Ausgabenfelder des EU-Haushalts an die COFOG Kategorien

anpassen, ohne dabei die EU-Haushaltsstruktur zu verändern.

Zweitens könnten sich die Mitgliedstaaten darauf einigen, zukünftig ihren nationalen Budgets

einen Überblick der finanziellen Verpflichtungen und Anstrengungen zur Erfüllung der EU-Ziele

und – Strategien beizufügen. Diese Neuerung würde es den Regierungen und Parlamenten

erlauben, einen Bezug von nationalen Zielen zu Verpflichtungen auf EU-Ebene zu herzustellen.

Außerdem würde so ein Rahmen für die Ausgaben der EU und der Mitgliedstaaten geschaffen, der

eine Einsicht in die "Leverage-Effekte" (Hebelwirkungen) europäischer Finanzinstrumente liefern

würde.

Drittens sollten nationale Parlamente mit dem Europäischen Parlament zur Verbesserung der

Budgetkoordination auf beiden Ebenen zusammenarbeiten. Neben dem existierenden Forum auf

Ratsebene, könnten engere Gespräche zwischen EU- und nationalen Parlamenten, welche beide

über budgetäre Kompetenzen verfügen, ein effizientes Mittel sein, um neue Wege zur verbesserten

Budgetkoordination zu finden und Anreize für nationale Entscheidungsträger zur stärkeren

Abstimmung der nationalen Ausgaben mit den Ausgaben der EU liefern. Solche Diskussionen

könnten sich auch auf die in diesem Bericht ausgemachten Schwachstellen und die nötige

Koordination in spezifischen Ausgabenfeldern konzentrieren.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

OBJECTIVE OF THE STUDY

This study focuses on the budgetary interventions at EU and national level in specified policy areas,

and on the mechanisms and processes designed to ensure budget coordination between the two

levels. Deloitte has been mandated by the Services of the European Parliament to carry out this

study. The focus is as follows:



At the level of the general policy objectives:



Five EU policy objectives or categories of expenditure were selected for the study, based

on their relevance and representativeness. The selected categories of expenditure are:

research and development, humanitarian and development aid, education, social policy in

the context of the Lisbon agenda

, and foreign and security policy (CFSP);

An analysis of the guiding budgetary and policy objectives at European and national levels

for these five areas, as well as the extent to which they are compatible, complementary or

similar, based on research in four Member States (Belgium, France, Slovenia and Portugal);



Coordination and complementarities in spending patterns (in a sample of Member

States):

For the specific policy objectives/areas defined above, we have completed:



Analysis of the relevant EU budget lines and their level of implementation between 2007

and 2009;

Identification of the corresponding budget lines in the national budgets, as well as their

level of implementation between 2007 and 2009

;

Analysis of the leverage effect of EU co-financing requirements on the mobilisation of

national public resources;

Analysis of the expenditure at EU and Member State level respectively, and their degree of

congruence;



Coordination processes (in a sample of Member States):



Analysis of the current mechanisms and procedures designed to coordinate EU and

national expenditure when aiming for the same objectives. This analysis covers both EU

and national levels, including not only the stage of budgetary procedures but also the

possible coordination mechanisms that apply when the budget is implemented;

Evaluation of the impact of the mechanism on synergy and possible overlaps/disconnects

between the EU budget and the national budgets for the selected areas/objectives;

Analysis of the reasons for a lack of synergy between the European and national levels, and

development of recommendations on how the EU objectives in the selected areas could

best be accomplished and how more effective coordination could be achieved, e.g.

through better integration of policy guidelines and budgetary allocations at both EU and



The emphasis will be on labour market activation instead of social

benefits.

During the inception meeting, the Steering Committee agreed to search for the most recent data available.

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

national levels, and enhanced coordination between the European Parliament and

national Parliaments;



The obstacles and constraints to such changes are also presented, notably those related to

the current processes and calendars of national budgetary procedures.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

METHODOLOGY

In order to be able to formulate sound conclusions with regard to the level of existing coordination

and congruence between the EU and national budgets, the following data collection activities took

place:



An in-depth analysis of available public expenditure data at EU and Member State level;



A series of face-to-face interviews with officials at EU and Member State level.

Annex 1 contains a detailed explanation of the methodology that was used by the research team.

2.1. ANALYSIS OF AVAILABLE PUBLIC EXPENDITURE FIGURES

2.1.1. Public expenditure data at Member State level

In analysing public expenditure in the Member States, the research team initially favoured a

functional breakdown of government expenditure based on COFOG (Classification of Functions of

Government). COFOG is regarded as a unique classification that enables the national budgets of all

EU-27 states to be presented consistently and to bridge the existing differences in the national

budgetary frameworks.

Annex 2 of this final report provides an overview of the selected categories of expenditure and

their associated COFOG categories

The functional breakdown of public expenditure based on COFOG is highly relevant for two of the

selected categories of expenditure - ‘social policy’ and ‘education’. For the other categories,

however, an analysis based on COFOG is less suitable because:



‘Research and Development’ is not a COFOG level I category, i.e. R&D expenditure is not

collected under a single umbrella and needs to be allocated separately to all level I

categories based on the purpose of specific expenditure. For example, R&D into

environmental protection falls under the COFOG heading ‘environmental protection’.

Consequently, we have relied on data on R&D expenditure from the Member States

which are based on a different classification system called

Government budget

appropriations or outlays on R&D

(GBAORD).

‘External relations’, which for the EU is part of CFSP is a COFOG level III subcategory under

category I ‘General public services’. Member States seldom report level III COFOG data.

Therefore, the research team has relied on other information sources.

The same is true for Development and Humanitarian Aid (also level III), for which Eurostat

data have been used, as well as data from the OECD-DAC (Development Assistance

Committee) database.



2.1.2. Public expenditure data at EU level

The COFOG classification, however, may be more difficult to apply for the analysis of EU In

analysing EU expenditure, the COFOG classification can be more difficult to apply, where specific

budgetary categories such as F In order to be able to compare national with EU public expenditure

As the categories of expenditure selected are not taken directly from COFOG due to the fact that they are based on the

heading structure of the General Budget of the European Union.

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__________________________________________________________________________________________

through one analytical framework, the headings of the EU annual budget were broken down into

smaller categories of expenditure to be reconciled with COFOG categories I and II.

The alignment of the EU budget breakdown by the selected categories of expenditure is relatively

straightforward for two of the categories in scope: CFSP, and humanitarian and development aid.

For all other categories of expenditure (research, social policy and education), the EU budget has

been further broken down, based on the headings and chapters of the EU annual budgets.

This required the research team to take account of the following:



Assigning expenditure to the different policy areas of Regional Policy (which covers the

European Regional Development Fund and the Cohesion Fund), is rather complicated, as

the ERDF invests in a wide range of activities: economic development, R&D, education,

social protection, etc. However, the EU annual budgets do not contain detailed

information about the purpose of the activities that are financed by the ERDF.

Consequently, the European Parliament’s services requested data from DG REGIO in order

to identify the exact and final destination of the funds that have been granted. Based on

these data, EU expenditure within the structural policies has been allocated to one of the

selected categories of expenditure (education, R&D, social protection).

The policy area ‘Employment and Social Affairs’ (including the European Social Fund)

does not only relate to the ‘social protection’ category of expenditure, as ESF funding is

also granted for ‘economic affairs’ and ‘education’ purposes.

EU expenditure on ‘education and culture’ is a single policy area. However, as the scope

of this study is limited to ‘education’ and does not include ‘culture’, the research team

carefully scanned the EU annual budgets in order to identify the destination of

expenditure in this policy area.



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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

2.1.3. Overview of relevant budget lines and data availability

To summarise the methodological considerations in the section above, the table below gives an overview of the data sources and budget lines selected

for the analysis.

Table 1: Selection of budget lines and information sources with regards to public expenditure in the selected policy areas

R&D

HUMANITARIAN AND DEVELOPMENT

AID

EDUCATION AND TRAINING

Where to find data?

annual

budget

headings:



Chapter

04:

Cooperation – Space

and Security



Chapter

(European Social Fund)



Chapter 06

06 —

Research related to

energy and transport



Title 08 — Research



Chapter 09

05 —

Capacities — Research

infrastructures



Title 10 — Direct

research

Title 13 —

Regional policy

Government

budget

appropriations or outlays on

R&D (GBAORD).

Note: GBAORD represents

budgetary forecasts and not

actual spending.

Source: own analysis, reviewed by DG BUDG

EU annual budget headings:



Chapter 19 09 — Relations with

Latin America



Chapter 19 10 — Relations with

Asia, Central Asia and Middle

East (Iraq, Iran, Yemen)



Title 21 — Development

and

relations with ACP States



Title 23 — Humanitarian aid

EU annual budget headings:



Title 15 — Education and

Culture



Chapter 04

—

European Social Fund



Chapter 04

06 —

Instrument for Pre-

Accession

Assistance

(IPA)-Human resources

development



Title 13 — Regional

policy

annual

budget

headings:



Title 04 —Employment

and Social Affair



Title 13 — Regional

policy

EU annual budget headings:



Title 19 — External

relations

SOCIAL POLICY

FOREIGN AND SECURITY

POLICY

Member States

Data on Official Development

Assistance, produced by the OECD-

DAC and available at Eurostat (only

applicable for EU DAC countries)

Public

administration

spending in support of

Teaching

following

Classification of Functions of

Governments (COFOG).

Public

administration

spending in support of

‘Social Protection’ following

Classification of Functions of

Governments (COFOG).

Public

administration

spending in support of

Foreign and Security policy

following Classification of

Functions of Governments

(COFOG).

The selection of budget lines, as well as the figures on public expenditure that were used in this report, have been checked by DG BUDGET services with regard to consistency and

accurateness.

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

2.2. FACE-TO-FACE INTERVIEWS

To complete the data analysis of public expenditure at EU and Member State level, a series of face-

to-face interviews were conducted.

At EU level, the research team conducted interviews with European Commission officials (DGs

ECFIN and BUDGET) and representatives of the Council of the EU. The interviews aimed to verify

the research team’s data analysis of EU public expenditure. Moreover, interviewees at EU level

provided more insight into the existing spending patterns at EU level and their level of congruence

with public spending in the Member States.

Secondly, we conducted interviews with multiple stakeholders in the four selected Member States.

The interview phase in the Member States included officials of some or all of the following: the

different national parliaments, the courts of audit, the national planning and statistical offices, and

government officials – within the Ministries of Finance or Budget, and in the selected policy areas

(R&D, social policy, education, development and humanitarian aid, foreign and security policy). The

interviews aimed to provide a clear insight into the budgetary procedures and practices that are in

place in these Member States and to assess the level of congruence between the policy and

budget priorities at EU level, and the respective Member States. Additionally, they focused on the

role and interactions with EU institutions and legislation when drafting national budgets.

Annex 1 (1.6) contains a list of interviewees for all selected Member States and at EU level. The

table below provides an overview of the policy area and geographical coverage of the interview

phase.

Table 2: Geographical and sector coverage of interview sample

SLOVENIA

Education

Research and

development

Social policy

Development and

assistance aid

Security policy

Ministry of Budget

or Finance

Parliamentary

Committee

Court of Audits

Statistical Offices

FRANCE

BELGIUM

PORTUGAL

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

COORDINATION AND COMPLEMENTARITIES IN SPENDING PATTERNS

3.1. ANALYSIS OF THE EU BUDGET AND ITS LEVEL OF IMPLEMENTATION (2007-2009)

3.1.1. Overview

In the current Financial Framework, a large proportion goes on the Common Agricultural Policy,

and in particular on direct payments. For the remainder, based on the solidarity principle, the

emphasis has been laid on cohesion policy and economic development. According to Begg

, about

60% of the EU budget is related to commitments that result from the Lisbon Strategy if cohesion

policy is included. Approximately 10% of the EU budget furthers research objectives and activities.

This is 0.1% of EU GNI (compared to the3% target of public and private spending which was set by

the Lisbon Strategy).

One of the main governance challenges at EU level for post-2010 is the reconciliation of the

different EU processes, such as the Lisbon Strategy and the Europe 2020 Strategy, the Sustainable

Development and Energy Policy for Europe, and the Social Inclusion and Cohesion policies. The

alignment of EU-wide strategies needs to be reflected in the EU budget. The shares of authentic

EU-level public goods, distributive transfers (based on the solidarity principle) and new needs

(climate change, knowledge economy, innovation, etc.) have to be rebalanced. Furthermore, EU

observers refer to the growing need to integrate national and the EU budgets and to find a

sustainable balance of power between the Member States, sub-national levels and the EU level.

The European Commission has recently presented the Europe 2020 Strategy. This is designed to

tackle Europe’s weaknesses and ensure the necessary structural reforms are implemented. The new

strategy replaces the previous Lisbon Strategy, which covered 2000-2010. The Europe 2020

Strategy focuses on:



Boosting EU competitiveness;

Research and (dissemination of) innovation;

Infrastructure enhancements;

Knowledge economy;

Digital Europe;

New skills;

Empowering people and Education;

Social cohesion and employability, etc.

The data in the table indicate:



A significant increase in actual spending by the EU on purposes related to ‘education and

training’ and on ‘research’ during the period 2004-2009. The investments by the

Commission following the launch of the FP7 research programme and the Lifelong

Learning Programme (LLP) are important drivers behind the increase.



A significant decrease in actual spending by the EU on ‘Employment and Social Affairs’,

which can be explained by the finalisation of the ESF multiannual programme 2000-2006

and the launch of a new ESF programme for the period 2007-2013 .

I. BEGG, Lisbon in the EU Budget, European Institute London School of Economics, 2009

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__________________________________________________________________________________________

The table below gives an overview of the outturn of EU expenditure in the selected categories of expenditure, based on the General Summary of

Appropriations and Outturn (2004-2009) that is published annually in the Official Journal of the European Union.

Table 3: Appropriation and Outturn EU budget for the selected categories of expenditure, 2004-2009 (million euro)

Million EUR

Appr.

Education and culture

Research

Direct research

Employment & Social affairs

Humanitarian aid

Development & ACP relations

€ 958,68

€ 328,77

€ 536,45

2004

Outturn

€ 928,00

€ 356,00

€ 519,00

Appr.

€ 1.034,64

€ 392,74

€ 833,91

€ 1.050,22

2005

Outturn

€ 989,00

€ 356,00

€ 596,00

€ 927,18

Appr.

€ 1.267,21

€ 625,44

€ 634,97

€ 1.310,68

2006

Outturn

€ 1.108,21

€ 3.372,81

€ 392,67

€ 9.563,81

€ 625,05

€ 976,76

Appr.

€ 1.449,79

€ 3.311,76

€ 656,04

€ 11.664,36

€ 764,29

€ 1.343,70

2007

Outturn

€ 1.260,53

€ 2.678,46

€ 405,88

€ 11.547,43

€ 755,64

€ 1.192,82

Appr.

€ 1.595,75

€ 5.059,42

€ 653,59

€ 11.081,35

€ 901,65

1 292,11

2008

Outturn

€ 1.229,54

€ 3.440,58

€ 343,69

€ 6.969,73

€ 767,40

€ 868,79

Appr.

€ 1.648,01

€ 5.902,85

€ 706,34

€ 10.679,75

€ 858,05

€ 1.801,50

2009

Outturn

€ 1.275,46

€ 3.696,13

€ 362,21

€ 6.059,62

€ 691,27

€ 1.237,98

Evolution

2004-2009 %

Outturn

37,4%

41,6%

1,7%

-34,8%

33,2%

21,8%

€ 3.475,54 € 2.611,00

€ 3.614,45 € 3.016,00 € 3.998,33

€ 10.773,20 € 9.295,00 € 11.471,84 € 9.736,00 € 9.613,69

€ 1.197,45 € 1.016,00

Source: Oficial Journal of the European Union, General Summary of appropriations and outturn (2004-2009), by policy area

The chapters below aim to provide a more detailed breakdown of EU spending in these areas.

The scope of the study is limited to the area of education and does not cover ‘culture’. ‘General summary of appropriations and outturn, by policy area’, published by the European

Commission, does not make the distinction between both areas. In the chapters below, expenditure in this area has been split up. Based on our own calculations and analysis of the

European annual budget reports, about 78% of expenditure in ‘education and culture’ goes to ‘education and training’ activities. Methodological notes can be found in Annex 1.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.1.2. Education

National governments are predominantly responsible for education and training, particularly with

regard to primary and secondary education

. However, some challenges are common to all

Member States: ageing societies, skills deficits of the workforce and global competition. This

justifies joint responses and exchanges of lessons learned.

EU education and training policy has been given added impetus since the adoption of the Lisbon

Strategy in 2000, the EU's overarching programme focusing on growth and jobs. Knowledge, and

the innovation it sparks, is considered by the Lisbon Strategy as the EU's most valuable assets,

particularly as global competition becomes more intense in all sectors.

The European Commission established a single umbrella for education and training activities,

called the Lifelong Learning Programme (LLP) since the new Financial Perspective 2007-2013. The

programme, established under the current Financial Framework 2007-2013, replaces previous

education, vocational training and e-learning programmes that came to an end in 2006.

The Member States and the European Commission strengthened their policy cooperation, with the

launch of the Education and Training 2010 work programme in 2001 and its follow-up, the strategic

framework for European cooperation in education and training ("ET 2020") adopted by the Council

in May 2009.

The new strategic framework identifies four long term strategic objectives:

1. Making lifelong learning and mobility a reality;

2. Improving the quality and efficiency of education and training;

3. Promoting equity, social cohesion and active citizenship;

4. Enhancing creativity and innovation, including entrepreneurship, at all levels of education

and training.

Based on these four strategic objectives, a number of priority areas were identified for concrete

follow-up activities – for example expanding opportunities for mobility of students or enhancing

partnerships between education and training institutions, and broader society. In addition, EU-level

benchmarks have been set for 2010 and 2020.

The benchmarks for 2010 are:



the share of 15-year olds underachieving in reading should decrease by at least 20%;



the average rate of early school leavers should be no more than 10%;



at least 85% of 22-year olds should have completed upper secondary education;



the total number of graduates in mathematics, science and technology should increase by

at least 15%, while the gender imbalance in these subjects should be reduced



the average participation of the working adult population in lifelong learning (age group

25-64) should reach at least 12.5%.

The benchmarks to be achieved by 2020 are:



at least 95% of children between the age of four and the age for starting compulsory

primary education should participate in early childhood education;



the share of 15-year olds with insufficient abilities in reading, mathematics and science

should be less than 15%;



the share of early leavers from education and training should be less than 10%;



the share of 30-34 year olds with tertiary educational attainment should be at least 40%;

The bulk of EU funding in the area of education flows to tertiary education and lifelong learning programmes.

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________



an average of at least 15 % of adults (age group 25-64) should participate in lifelong

learning.

The data in the table

below tells us that



More than 4% of total actual spending by the EU goes to education and training;



Lifelong learning is the most important pillar of education policy at EU level;



Approximately 32.9% of funding from the European Social Fund is allocated to projects

with educational and training purposes, particularly vocational training.

The analysis for this and all policy areas took into account not only the operational expenditure, but the administrative

expenditure that is directly and indirectly related to the policy area.

The commitments appropriations could not be identified for a range of subcategories of the EU budget (hatched). This

does not imply that no commitments were made for these subcategories of expenditure

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

Table 4: Breakdown of total Community expenditure in the field of education and training, by heading (1)

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Commitments

Code

15 01

Title 15 — Education and Culture

Administrative expenditure of Education and

culture policy area* (indirectly allocated based

on defined key)

Payments

Committments

Payments

Committments

Payments

Committments

Payments

€ 83.158.407

€ 76.823.735

€ 78.529.461

15 01 04 14 Erasmus Mundus — Expenditure on

administrative management

15 01 04 17 Cooperation with non-member countries on

education and vocational training —

Expenditure on administrative management

15 01 04 22 Lifelong learning — Expenditure on

administrative management

15 02

Lifelong learning, including multilingualism

€ 770.000

€ 65.000

€ 8.843.000

€ 1.152.378.500

€ 1.115.302.000

€ 1.075.137.000

€ 2.536.000

€ 115.000

€ 7.743.000

€ 1.051.292.000

€ 1.092.844.025

€ 1.373.450

€ 92.049

€ 11.582.223

€ 1.060.338.044

€ 1.014.160.364

€ 1.184.443

€ 199.988

€ 10.546.176

€ 971.188.015

-35,0%

-67,5%

-16,1%

14,8%

Chapter 04 02 — European Social Fund

Indirectly allocation of ESF activities to

education (32,9%)

Developing educational and vocational training

(32,3%)

Human Resources (0,6%)

04 01 04 01 European Social Fund (ESF) and non-

operational technical assistance —

Expenditure on administrative management

Indirectly allocation to education (32,9%)

€ 10.827.964.982

€ 3.562.400.479

€ 3.497.432.689

€ 64.967.790

€ 8.216.400.000 € 10.793.147.498

€ 2.703.195.600

€ 2.653.897.200

€ 49.298.400

€ 16.500.000

€ 5.428.500

€ 3.550.945.527

€ 3.486.186.642

€ 64.758.885

€ 10.846.400.000

€ 3.568.465.600

€ 3.503.387.200

€ 65.078.400

€ 16.500.000

€ 5.428.500

€ 10.622.597.077

€ 3.494.834.438

€ 3.431.098.856

€ 63.735.582

€ 8.788.527.447

€ 2.891.425.530

€ 2.838.694.366

€ 52.731.165

€ 15.930.146

€ 5.241.018

€ 10.503.063.164

€ 3.455.507.781

€ 3.392.489.402

€ 63.018.379

€ 11.297.512.235

€ 3.716.881.525

€ 3.649.096.452

€ 67.785.073

€ 13.230.199

€ 4.352.736

24,7%

-27,3%

Chapter 04 06 — Instrument for Pre-Accession Assistance (IPA)-Human resources development

04 06 01

Instrument for Pre-Accession Assistance

(IPA)-Human resources development

€ 87.500.000

€ 29.835.000

€ 76.900.000

€ 66.890.250

€ 71.600.000

€0

€ 64.777.000

€0

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Table 5: Breakdown of total Community expenditure in the field of education and training, by heading (2)

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Commitments

Title 13 — Regional policy

13 03

Payments

Committments

Payments

Committments

Payments

Committments

Payments

European Regional Development Fund and

€ 28.215.511.094 € 21.231.700.000 € 28.184.036.173

other regional operations

Indirectly allocation of ERDF activities to

€ 225.724.089

€ 169.853.600

€ 225.472.289

education (0,8%)

€ 11.135.000

€ 89.080

€ 66.861.131

€ 48.942.348

€ 391.539

€ 16.753.663.196

€ 134.029.306

€ 28.436.561.007

€ 227.492.488

€ 21.455.207.089

€ 171.641.657

€ 27.264.244.792

€ 218.113.958

€ 21.399.931.660

€ 171.199.453

-0,8%

13 01 04 01 European Regional Development Fund

(ERDF) — Expenditure on administrative

management

Allocation of admin. ERDF costs to Education

(0,8%)

Subtotal

Total of general administrative overhead costs

regional Policy

Allocation of total administrative overhead

costs regional policy to ERDF (73,20%)

Allocation of admin. ERDF costs to Education

(0,8%)

€ 13.100.000

€ 104.800

€ 64.328.903

€ 47.088.757

€ 376.710

€ 10.152.222

€ 81.218

€ 65.216.319

€ 47.738.346

€ 381.907

€ 9.629.212

€ 77.034

€ 56.826.349

€ 41.596.888

€ 332.775

17,7%

15,6%

Total Community expenditure on

'Education'

Total approp. - outturn EU Community

budget

% of total EU Community budget outturn

€ 4.116.931.726

€ 4.928.454.816

€ 4.913.804.901

€ 4.886.770.951

€ 126.979.000.000

3,8%

€ 4.220.686.556

€ 104.294.090.000

4,0%

€ 4.752.559.103

€ 116.974.800.000

4,1%

€ 4.875.962.144

€ 111.506.490.000

4,4%

€ 124.132.790.000 € 101.882.620.000

4,0%

4,8%

Source: Own calculations, based on the EU annual budget report 2009 and EU Budget Online

Legend: - Hatched pattern: data not provided by EU budget online

EU Budget Online only provides outturn data until the year 2008, not for 2009 and 2010.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

As the annual EU budget reports do not provide detailed insight into the expenditure for the

Lifelong Learning Programme, the research team analysed the annual programmes of DG

Education and Culture to indicate the share of the different education funds in the total EU

expenditure under the lifelong learning programme

. This is illustrated in the table below.

The table demonstrates that the bulk of funding is allocated to the Erasmus Programme (43.7%),

which funds periods of study outside a student’s home country, followed by the Leonardo da Vinci

Programme for vocational training purposes (26.1%). This distribution of financial resources shows

where the emphasis of the EU is in education and training.

As the general budget of the European Union does not detail the destinations of funds under the lifelong learning

programme, we relied on the annual work programme 2009 of the lifelong learning programme of DG Education and

Culture, which gives a detailed overview of the budget of the Lifelong Learning Programme. Please note that these

data do not reflect actual spending, but budgetary appropriations.

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Table 6: Funds Lifelong learning Programme (indication of budgets)

Lifelearning programme

Programme Comenius

Budget 2009

€ 181.304.819,00

% in total LLP Source: Website DG Education - Annual Work Programme 2009

budget

Target groups: Schools 1. Increase the mobility of pupils and educational staff (all levels - primary, secondary, etc.); 2.

17,25%

Enhance and increase partnerships between schools in different M.S.; 3. enhance language training: 4. Encourage

participation in sports

Target groups: Higher Education: EU's education and training programme for mobility and cooperation in higher education

43,70%

across Europe. Its different actions not only address students wishing to study and work abroad, but also higher education

teachers and enterprise staff intending to teach abroad and to higher education staff seeking training abroad. In addition,

Erasmus supports higher education institutions to work together through intensive programmes, networks and multilateral

projects.

Target groups: vocational training: The Leonardo da Vinci programme links policy to practice in the field of vocational

26,11%

education and training (VET). Projects range from those giving individuals the chance to improve their competences,

knowledge and skills through a period abroad, to Europe-wide co-operation between VET stakeholders in order to enhance

the attractiveness, quality and performance of VET systems and practices.

Target groups: adult learning: Addresses the teaching and learning needs relating to all forms of adult learning which are

5,78%

not of a predominantly vocational nature, as well as the institutions and organisations providing or facilitating any form of

such learning opportunities for adults – whether of a formal, non-formal or informal nature – including those involved in the

initial and in-service training of staff.

Target groups: transversal for all four sectoral programmes

4,93%

2,44%

Policy co-operation and innovation actions: supports study visits for education and vocational training specialists, as well

as studies and comparative research in these fields at European level. The main objectives are to support policy

development and co-operation in lifelong learning and to ensure an adequate supply of comparable data, statistics and

analyses.

Linguistic diversity is a fact of life in Europe and it can encourage economic growth, personal development and inter-

cultural dialogue. EU actions aim to promote language learning and the linguistic diversity in Europe.

EU actions aim to harness the power of Information and Communications Technologies (ICT) to develop innovative

education and training practices, improve access to lifelong learning and help develop advanced management systems.

In order to maximise their impact, activities and projects funded by the Lifelong Learning Programme, or previous

programmes, should be made as widely known as possible to potential users. Therefore, it is necessary that each EU-

funded project disseminates and exploits its own results.

The Jean Monnet programme stimulates teaching, research and reflection on European integration at higher education

institutions throughout the world. With projects across the five continents, the programme reaches up to 250 000 students

every year.

Grants are awarded to support certain operational and administrative costs of the following named institutions pursuing an

aim of European interest: - the College of Europe, the European University Institute - the European Institute of Public

Administration etc.

Grants may be awarded to support certain operational and administrative costs of European institutions or associations

active in the field of education and training.

Programme Erasmus

€ 459.193.780,00

Programme Leonardo da Vinci

€ 274.377.507,00

Programme Grundtvig

€ 60.750.074,00

Programme transversal

€ 51.854.277,00

€ 25.604.277,00

1.Policy Cooperation and Innovation

€ 12.650.000,00

€ 9.000.000,00

€ 4.600.000,00

4. Dissemination and Exploitation of Results

Programme Jean Monnet

€ 24.119.500,00

€ 4.523.500,00

1. Jean Monnet Action

€ 17.896.000,00

perating grants to specified institutions

€ 1.700.000,00

perating grants to support other institutions

Others

€ 900.000,00

0,16%

0,09%

100,0%

1,70%

2,30%

0,43%

1,20%

0,86%

0,44%

2. Language Learning

3. ICT

Total € 1.050.799.957,00

Source: Website DG Education, Annual Work Programme 2009,

http://ec.europa.eu/dgs/education_culture/calls/docs/c_2009_6560.pdf.

New data will be available as from 01-05. Specific figures

for each programme will be available in the Education and Culture Activity Statement.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.1.3. Research and Development (R&D)

Focusing on specific sectors through the provisions of the Treaties establishing the European Coal

and Steel Community (ECSC) and the European Atomic Energy Community, the policy area of

research was originally not very developed in the Community Treaties. It was the Single European

Act (1986) and the Maastricht Treaty (1993) that reinforced EU research policy. Today, EU research

policy coordinates the national research policies of the Member States and defines projects of

interest to the EU in a wide range of science and technology domains. The overall key objective of

EU research policy is to strengthen the scientific and technological basis of industry in the EU and

to increase public and private R&D expenditure. The European Commission acknowledges that

there is a direct link between the level of R&D expenditure and GDP growth

The table below demonstrates some of the EU’s weaknesses in the field of R&D - compared to

countries, such as the United States and Japan. This spurred the Commission to seek to increase

the financial resources within the Financial Framework for R&D activities. The low levels of private

and public expenditure, the so-called R&D intensity, and the number of researchers in the labour

force need to be tackled.

Table 7: Current R&D weaknesses in the EU

Source: DG Research website, based on Eurostat & OECD data

EU research programmes are implemented through both ‘direct’ and ‘indirect’ actions:



The

direct

actions are R&D activities carried out by the European Commission in its so-

called Joint Research Centre (JRCs) - 7 science and technology reference centres for the

EU covering a variety of scientific areas - and fully financed by the EU budget;



Indirect

activities are research projects carried out by research centres, universities or

enterprises with financial assistance (by means of a grant) from the EU under FP7. A grant

can cover between 50% and 100% of total research costs. In addition, the Structural

Funds, which require co-financing from the Member States’ governments, enable the

funding of R&D activities in Member States, as R&D often relates to social, economic and

regional development.

The funding that is granted by the EU to research under FP7 comes from the EU budget. The 2007-

2013 Financial Framework includes a reinforced envelope of EUR 50 521 million for FP7 and EUR

2.751 million for the Euratom respectively for the 2007-2013 and 2007-2011 periods. For FP7, this

represents an increase compared with the previous FP6 of 41% (at 2004 prices). The investment

efforts made by the European Union underline the importance of FP7 as a key instrument to

DG Research, Building networks of knowledge. FP7. Tomorrow’s answers start today, 2009

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

increase competitiveness of the European industry. Compared to FP6, FP7 is considered to be a

more flexible research programme with simplified procedures and a more comprehensive scope

FP7 is built upon five pillars:



Cooperation: accounts for two thirds 3 of the overall budget and aims to foster

collaborative research across Europe and its partner countries, through projects by

transnational consortia of industry and academia;



Ideas: supports ‘frontier research’ without any obligations for cross-border partnerships;



People: supports researcher mobility and career development for researchers (inside and

outside the EU) through so-called Marie Curie actions, or fellowships;



Capacities: enforces the research capacities of the EU, covering research infrastructures,

regions of knowledge, research potential, etc., science in society, etc.;



Nuclear research:

The table below shows the positive trend in of annual budgets of the EU research framework

programmes between 1984 and 2013.

Table 8: EU research framework programmes - annual budgets between 1984 and 2013

Source: DG Research, 2009, http:// iftm2005.sabanciuniv.edu/eng/L.%20Karapiperis%20.ppt

Website of the European Commission - FP7: http://cordis.europa.eu/fp7/dc/index.cfm

DG Research, Building Knowledge. FP7. Tomorrow’s answers start today. 2009

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

Table 9: Breakdown of total Community expenditure in the field of R&D, by heading (1)

Million EUR

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Payments

€ 120.985.686

€ 11.297.512.235

€ 67.785.073

€ 13.230.199

-27,3%

Code

Chapter 02 04 - Space and Security

04 02

Commitments

€ 427.906.000

Payments

€ 343.156.000

Committments

€ 251.503.600

Payments

€ 207.262.500

Committments

€ 218.715.113

€ 10.622.597.077

€ 63.735.582

Payments

€ 130.852.231

€ 8.788.527.447

€ 52.731.165

€ 15.930.146

Committments

€ 171.306.881

€ 10.503.063.164

€ 63.018.379

Chapter 04 02 — European Social Fund

€ 10.827.964.982 € 8.216.400.000 € 10.793.147.498 € 10.846.400.000

Indirectly allocation to R&D (0,6%)

€ 64.967.790

€ 49.298.400

€ 16.500.000

€ 64.758.885

€ 65.078.400

€ 16.500.000

04 01 04 01 European Social Fund (ESF) and non-

operational technical assistance —

Expenditure on administrative management

Indirectly allocation to R&D (0,6%)

€ 99.000

€ 95.581

€ 79.381

24,7%

Chapter 06 06 — Research related to

energy and transport

06 06 01 01 Research related to energy

06 06 01 02 Research related to energy — Fuel Cells and

Hydrogen (FCH) Joint Undertaking

06 06 02 01 Research related to transport (including

aeronautics)

06 06 02 02 Research related to transport (including

Aeronautics) — FCH Joint Undertaking

06 06 02 03 SESAR Joint Undertaking

06 06 04

Appropriations accruing from contributions

from third parties to R&D development

Completion of previous programmes

€ 123.292.000

€ 19.200.000

€ 66.060.000

€ 2.900.000

€ 53.700.000

p.m.

€ 86.000.000

€ 11.520.000

€ 35.000.000

€ 1.740.000

€ 40.000.000

p.m.

€ 128.685.000

€ 20.160.000

€ 61.550.000

€ 2.900.000

€ 51.500.000

p.m.

€ 102.760.413

p.m.

€ 58.639.200

€ 2.900.000

€ 13.000.000

p.m.

€ 153.087.312

€ 37.377.404

€ 118.864.068

€ 1.102.677

7699,2%

€ 122.407.245

€ 62.062.013

€ 115.919.401

€ 30.967.251

13,0%

p.m.

€ 16.539.961

€ 7.814.527

06 06 05

06 06 05 01 Completion of programmes (prior to 2003)

—

€ 2.600.000

€ 50.000.000

€ 226.860.000

—

€ 264.795.000

€ 5.500.000

€ 59.000.000

€ 241.799.613

€ 53.974

€ 18.172

€ 284.261.827

€ 9.112.204

€ 83.234.802

€ 200.152.840

€ 597.357

€ 694

€ 251.921.480

€ 37.398.215

€ 137.500.279

€ 214.782.949

-93,0%

-63,6%

5,6%

06 06 05 02 Completion of the 6th EC framework

—

programme (2003 to 2006)

Chapter 06 06 — Total € 265.152.000

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Table 10: Breakdown of total Community expenditure in the field of R&D, by heading (2)

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Payments

Code

Title 08 — Research

Administrative expenditure of Research

policy area

Cooperation — Health

Cooperation — Food, agriculture and

fisheries, and biotechnology

Cooperation — Nanosciences,

nanotechnologies, materials and new

production technologies

Cooperation — Energy

Cooperation — Environment (including

climate change)

Cooperation — Transport (including

aeronautics)

Cooperation — Socioeconomic sciences and

the humanities

Cooperation — Risk-sharing finance facility

(EIB)

Ideas

People

Capacities — Research infrastructures

Capacities — Research for the benefit of

small and medium-sized enterprises (SM Es)

Capacities — Regions of knowledge

Capacities — Research potential

Capacities — Science in society

Capacities — International cooperation

activities

Capacities — Risk-sharing finance facility

(EIB)

Capacities — Support for coherent

development of research policies

Euratom — Fusion energy

Commitments

Payments

Committments

Payments

Committments

Payments

Committments

08 01

08 02

08 03

08 04

€ 308.190.404

€ 766.304.000

€ 213.848.000

€ 413.278.000

€ 308.910.404

€ 532.714.000

€ 154.114.000

€ 280.411.000

€ 296.494.368

€ 681.120.000

€ 203.784.000

€ 420.845.000

€ 296.494.368

€ 438.000.000

€ 109.019.000

€ 304.066.097

€ 261.521.595

€ 711.554.282

€ 214.080.084

€ 399.740.799

€ 261.521.595

€ 397.387.794

€ 113.415.984

€ 233.699.866

€ 224.025.812

€ 670.298.534

€ 199.475.661

€ 380.709.684

€ 224.025.812

€ 61.344.663

€ 3.224.525

€ 5.283.939

37,9%

768,4%

4679,4%

5206,9%

08 05

08 06

08 07

08 08

08 09

08 10

08 11

08 12

08 13

€ 150.436.000

€ 224.506.000

€ 358.780.000

€ 74.444.000

€ 50.000.000

€ 1.098.000.000

€ 534.190.000

€ 212.392.000

€ 153.354.000

€ 119.534.000

€ 187.690.000

€ 328.222.000

€ 59.152.000

€ 50.000.000

€ 536.009.000

€ 284.000.000

€ 95.000.000

€ 97.791.000

€ 148.721.000

€ 219.203.000

€ 342.139.000

€ 71.878.000

€ 120.000.000

€ 775.000.000

€ 503.034.000

€ 187.666.000

€ 123.613.000

€ 139.787.750

€ 178.992.500

€ 321.617.000

€ 49.202.000

€ 120.000.000

€ 215.861.000

€ 393.004.000

€ 155.000.000

€ 120.937.700

€ 130.836.184

€ 224.373.227

€ 357.237.665

€ 86.310.674

€0

€ 528.393.665

€ 483.099.603

€ 147.479.484

€ 151.424.571

€ 64.024.193

€ 129.898.181

€ 215.273.017

€ 53.293.413

€ 72.136.038

€ 229.609.159

€ 280.714.563

€ 76.792.500

€ 123.146.563

€ 117.952.364

€ 208.878.368

€ 331.478.214

€ 70.181.468

€ 163.648.000

€ 266.762.612

€ 439.962.425

€ 106.572.692

€ 123.314.905

€ 29.912.693

€ 4.053.558

€ 8.077.559

€ 2.805.246

€ 91.511.962

€ 1.360.400

€ 11.915.070

€0

€ 2.999.379

299,6%

4530,3%

3963,4%

2008,6%

-45,4%

39300,8%

2283,5%

3160,4%

08 14

08 15

08 16

08 17

08 18

08 19

08 20

08 21

08 22

08 23

08 24

€ 16.957.000

€ 31.287.000

€ 50.203.000

€ 18.035.000

€ 30.000.000

€ 2.600.000

€ 384.274.000

€ 13.835.000

€ 23.888.000

€ 29.000.000

€ 16.969.000

€ 30.000.000

€ 7.476.000

€ 231.700.000

€ 22.235.000

€ 729.601.000

p.m.

€ 4.138.251.404

€ 16.078.000

€ 29.845.000

€ 33.732.000

€ 17.160.000

€ 31.500.000

€ 9.764.000

€ 378.888.000

€ 49.255.000

p.m.

€ 5.800.000

€ 4.659.719.368

€ 19.680.000

€ 46.960.650

€ 31.000.000

€ 14.952.000

€ 30.000.000

€ 9.265.000

€ 245.000.000

€ 21.500.000

€ 1.254.196.000

p.m.

€ 5.800.000

€ 4.514.535.065

€ 10.332.000

€ 30.515.292

€ 40.989.168

€ 17.496.630

€0

€ 9.883.735

€ 280.250.000

€ 46.410.000

€ 172.959.604

€ 51.328.523

p.m.

€ 4.356.463.719

€ 6.000.000

€ 16.894.350

€ 17.835.571

€ 11.211.705

€ 4.091.200

€ 2.672.435

€ 248.000.000

€ 23.000.000

€ 1.842.161.516

€ 41.935.165

p.m.

€ 4.464.858.209

€ 10.173.792

€ 25.403.284

€ 30.432.332

€ 17.464.310

€ 40.912.000

€ 7.310.621

€ 227.221.000

€ 49.000.000

€ 72.557.290

€ 55.068.823

€ 4.497.252

€0

€ 2.532.000

€ 5.216.280

€ 36.820.800

€ 2.143.354

€ 81.340.000

€ 9.900.761

€ 2.063.765.456

€ 42.509.415

207,6%

1045,3%

225,3%

-18,5%

248,8%

184,9%

124,6%

-64,6%

Euratom — Nuclear fission and radiation

€ 50.259.000

protection

Completion of previous framework

p.m.

programmes and other activities

Research programme of the research fund for

p.m.

coal and steel

European Institute of Innovation and

p.m.

Technology

Title 08 — Total € 5.142.057.404

3 838 804 190,47

€ 2.695.240.125

53,5%

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

Table 11: Breakdown of total Community expenditure in the field of R&D, by heading (3)

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Payments

Code

Commitments

Payments

Committments

Payments

Committments

Payments

Committments

Title 13 — Regional policy

13 01 04 01 European Regional Development Fund

€ 11.135.000

(ERDF) — Expenditure on administrative

management

Allocation of admin. ERDF costs to R&D

€ 734.910

(6,6%)

Subtotal

Allocation of total administrative overhead

€ 66.861.131

costs REGIO

Allocation of total administrative overhead

€ 48.942.348

costs REGIO to ERDF (73,20%)

Allocation of admin. ERDF costs to R&D

€ 3.230.195

(6,6%)

13 03

European Regional Development Fund and € 28.215.511.094 € 21.231.700.000 € 28.184.036.173

other regional operations

Indirectly allocated ERDF activities to R&D € 1.862.223.732 € 1.401.292.200 € 1.860.146.387

(6,6%)

Chapter 09 05 — Capacities — Research

infrastructures

Capacities — Research infrastructures

€ 13.100.000

€ 10.152.222

€ 9.629.212

€ 864.600

€ 64.328.903

€ 47.088.757

€ 3.107.858

€ 16.753.663.196

€ 1.105.741.771

€ 28.436.561.007

€ 1.876.813.026

€ 670.047

€ 65.216.319

€ 47.738.346

€ 3.150.731

€ 21.455.207.089

€ 1.416.043.668

€ 27.264.244.792

€ 1.799.440.156

€ 635.528

€ 56.826.349

€ 41.596.888

€ 2.745.395

€ 21.399.931.660

€ 1.412.395.490

15,6%

17,7%

-0,8%

09 05 01

€ 108.473.000

€ 70.000.000

€ 96.806.000

€ 66.869.000

€ 81.036.565

€ 58.439.966

€ 54.975.500

€ 24.386.166

187,0%

10 01

10 02

10 03

10 04

10 05

Title 10 — Direct research

Administrative expenditure of Direct

research policy area

Directly financed research operational

appropriations — Seventh framework

programme (2007 to 2013) — EC

Directly financed research operational

appropriations — Seventh framework

programme (2007 to 2011) — Euratom

Completion of previous framework

programmes and other activities

Historical liabilities resulting from nuclear

activities carried out by the Joint Research

Centre pursuant to the Euratom Treaty

Title 10 — Total

€ 316.450.000

€ 30.613.000

€ 316.450.000

€ 32.000.000

€ 300.040.000

€ 30.000.000

€ 300.040.000

€ 29.120.000

€ 318.006.755

€ 32.118.541

€ 318.006.755

€ 29.268.134

€ 307.822.621

€ 30.587.251

€ 307.822.621

€ 20.141.077

2,8%

58,9%

€ 9.358.000

€ 9.300.000

€ 8.200.000

€ 9.060.000

€ 10.088.397

€ 8.650.221

€ 10.462.206

€ 5.010.046

85,6%

p.m.

€ 26.900.000

€ 797.000

€ 33.000.000

p.m.

€ 32.600.000

€ 1.300.000

€ 26.200.000

€ 20.427.089

€ 22.587.465

€ 22.389.104

€ 22.845.641

€ 25.933.164

€ 26.928.119

€ 42.663.973

€ 31.656.859

-98,1%

4,2%

€ 383.321.000

€ 391.547.000

€ 370.840.000

€ 365.720.000

€ 403.228.247

€ 401.159.856

€ 401.733.361

€ 407.294.575

-3,9%

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Table 12: Breakdown of total Community expenditure in the field of R&D, by heading (4)

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

€ 963.755

11 05 01

11 05 02

Chapter 11 05 — Fisheries research

Appropriations accruing from contributions

from (non-European Economic Area) third

parties to research and technological

development

Completion of previous programmes

—

p.m.

€ 93.220

11 05 02 01 Completion of previous programmes (prior

to 2003)

11 05 02 02 Completion of the sixth EC framework

programme (2003 to 2006)

Chapter 11 05 — Total

—

p.m.

€ 7.000.000

—

p.m.

€ 1.500.000

€ 7.000.000

€ 8.500.000

€0

€ 93.220

€ 4.386.313

€ 6.326.883

€ 11.676.951

Total Community expenditure on R&D

Total approp. - outturn EU Community

budget

% of total EU Community budget

€ 6.624.469.109

€ 7.578.341.698

€ 6.583.877.807

€ 7.279.228.381

€ 126.979.000.000

5,7%

€ 6.728.144.476

€ 104.294.090.000

6,5%

€ 6.983.636.131

€ 116.974.800.000

6,0%

€ 5.580.084.842

€ 111.506.490.000

5,0%

18,7%

€ 124.132.790.000 € 101.882.620.000

6,1%

6,5%

Source: Own calculations, based on the EU Annual Budget report 2007, 2008, 2009

Legend:

- hatched pattern: data are not provided by the EU annual budget reports

- p.m. (pro memoria): token entry / figures not available yet

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.1.4. Social policy

The EU’s strategy for Growth and Jobs, better known as the Lisbon Strategy, targets improving the

lives of EU citizens by giving them better job prospects and skills. The European Employment

Strategy (EES) is based on employment guidelines that are drawn from the Lisbon Strategy and

that set out common priorities for Member States’ employment policies, which are agreed at EU

level. Each Member State then draws up a programme describing how it will implement the

guidelines nationally. The European Commission reviews progress on the implementation of the

national programmes.

The European Social Fund is the EU’s main financial instrument for investing in people, helping

them enhance their education and skills, and improving their job prospects. Among other things, it

assists EU citizens by providing financial support for actions such as training and enhancing skills.

For that purpose, the ESF invests €10 billion a year in all Member States. During 2007-2013 some

€75 billion will be distributed to the Member States. Funding is spread across the EU Member

States, according to the level of socio-economic development (eligibility areas)

The emphasis of the current ESF programming period lies on increasing the adaptability of workers,

enterprises and entrepreneurs by improving their ability to anticipate economic change and

globalisation. The ESF supports the modernisation of labour market institutions, activation

measures (skills enhancement of workers, support for jobseekers, etc.) and lifelong learning actions.

Ensuring accessibility to the labour market, social inclusion and promoting labour market

participation are also part of the scope of the European Social Fund.

In 2008, the European Commission launched a renewed social agenda for improving the well-

being and quality of life of European citizens, while respecting the principles of subsidiarity and

proportionality. The priorities are:



Improving the life chances of young people (by empowering and equipping them);



Promoting new skills for new jobs, fulfilling careers and better employment;



Fostering longer and healthier lives;



Combating poverty and social exclusion;



Promoting gender equality and equal opportunities;



Shaping the international agenda to promote European values;



Ensuring the appropriate policy mix and increasing the effectiveness of EU instruments.

Website European Social Fund: http://ec.europa.eu/employment_social/esf/

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Table 13: Breakdown of total Community expenditure in the field of social policy by heading (1)

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Commitments

Titre 04 —Employment and S ocial

Affairs

04 01

Administrative expenditure of

Employment and social affairs policy

€ 85.169.984

area (min. 04 01 04 01)

04 01 04 01 European Social Fund (ESF) —

Expenditure on administrative

€ 16.500.000

management

Indirectly allocation to Social policy

€ 10.362.000

domain (62,8%)

04 02

European Social Fund

€ 10.827.964.982

Indirectly allocation to Social policy

€ 6.799.962.009

domain (62,8%)

Labour market policy (25,9%)

€ 2.804.442.930

Social inclusion (14,2%)

€ 1.537.571.027

Workforce flexibility, entrepreneurial

activity, innovation, information and

€ 1.927.377.767

communication technologies (17,8%)

Positive labour market actions for

€ 534.901.470

woman (4,94%)

Working in europe — Social dialogue and

€ 72.500.000

mobility

Employment, social solidarity and gender

€ 158.690.593

equality

European Globalisation Adjustment

p.m.

Fund (EGF)

Instrument for Pre-Accession Assistance

(IPA) — Human resources development

€ 87.500.000

IPA- Employment and Social Affairs*

Payments

Committments

Payments

Committments

Payments

Committments

Payments

€ 85.169.984

€ 83.342.839

€ 83.198.158

€ 83.198.157

€ 77.150.536

10,4%

€ 16.500.000

€ 10.362.000

€ 8.216.400.000

€ 5.159.899.200

€ 2.128.047.600

€ 1.166.728.800

€ 1.462.519.200

€ 405.890.160

€ 62.700.000

€ 135.500.593

p.m.

€ 29.835.000

€ 16.500.000

€ 10.362.000

€ 10.793.147.498

€ 6.778.096.629

€ 2.795.425.202

€ 1.532.626.945

€ 1.921.180.255

€ 533.181.486

€ 67.426.000

€ 147.220.000

p.m.

€ 76.900.000

€ 68.790.250

€ 16.500.000

€ 10.362.000

€ 10.846.400.000

€ 6.811.539.200

€ 2.809.217.600

€ 1.540.188.800

€ 1.930.659.200

€ 535.812.160

€ 61.884.125

€ 124.304.000

p.m.

€ 66.890.250

€ 15.346.086

€ 9.637.342

€ 10.622.597.077

€ 6.670.990.965

€ 2.751.252.643

€ 1.508.408.785

€ 1.890.822.280

€ 524.756.296

€ 65.292.494

€ 120.232.154

p.m.

€ 71.600.000

€ 18.900.000

€ 15.346.086

€ 9.637.342

€ 8.788.527.447

€ 5.519.195.237

€ 2.276.228.609

€ 1.247.970.898

€ 1.564.357.886

€ 434.153.256

€ 56.629.426

€ 105.137.112

p.m.

€0

€ 13.230.199

€ 8.308.565

€ 10.503.063.164

€ 6.595.923.667

€ 2.720.293.360

€ 1.491.434.969

€ 1.869.545.243

€ 518.851.320

€ 66.647.708

€ 117.452.232

€ 18.610.968

€ 64.777.000

€ 13.230.199

€ 8.308.565

€ 11.297.512.235

€ 7.094.837.684

€ 2.926.055.669

€ 1.604.246.737

€ 2.010.957.178

€ 558.097.104

€ 52.490.745

€ 97.031.265

€ 18.610.968

€0

-27,3%

19,4%

39,6%

24,7%

04 03

04 04

04 05

04 06

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

Table 14: Breakdown of total Community expenditure in the field of social policy by heading (2)

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Commitments

Titre 13 — Regional policy

Payments

Committments

Payments

Committments

Payments

Committments

Payments

European Regional Development Fund

€ 28.215.511.094 € 21.231.700.000 € 28.184.036.173

and other regional operations

Indirectly allocation of ERDF activities

€ 564.310.222

€ 424.634.000

€ 563.680.723

to social policy (2,0%)

13 01 04 01 European Regional Development Fund

(ERDF) — Expenditure on

€ 11.135.000

€ 13.100.000

administrative management

Allocation of admin. ERDF costs to

€ 222.700

€ 262.000

Social policy (2,0%)

Subtotal

Total of general administrative overhead

€ 66.861.131

€ 64.328.903

costs REGIONAL Policy

Allocation of total administrative

overhead costs REGIO to ERDF

€ 48.942.348

€ 47.088.757

(73,20%)

Allocation of admin. ERDF costs to

€ 978.847

€ 941.775

Social policy (2,0%)

Total Community expenditure on

'social policy'

Total approp. - outturn EU

Community budget

% of total EU Community budget

13 03

€ 16.753.663.196

€ 335.073.264

€ 28.436.561.007

€ 568.731.220

€ 21.455.207.089

€ 429.104.142

€ 27.264.244.792

€ 545.284.896

€ 21.399.931.660

€ 427.998.633

-0,8%

€ 13.100.000

€ 262.000

€ 64.328.903

€ 47.088.757

€ 941.775

€ 11.135.000

€ 222.700

€ 65.216.319

€ 47.738.346

€ 954.767

€ 11.135.000

€ 222.700

€ 65.216.319

€ 47.738.346

€ 954.767

€ 9.629.212

€ 192.584

€ 56.826.349

€ 41.596.888

€ 831.938

€ 9.629.212

€ 192.584

€ 56.826.349

€ 41.596.888

€ 831.938

17,7%

15,6%

€ 7.692.196.355

€ 5.879.467.324

€ 7.651.331.966

€ 7.427.709.203

€ 7.519.259.800

€ 6.204.078.882

€ 7.430.403.095

€ 116.974.800.000

6,4%

€ 7.777.452.919

€ 111.506.490.000

7,0%

-24,4%

€ 124.132.790.000 € 101.882.620.000 € 126.979.000.000 € 104.294.090.000

6,2%

7,3%

5,9%

Source: own calculations, based on the EU annual budget reports 2007, 2008, 2009 - Budget Online

Legend:

hatched pattern: data are not provided by the EU annual budget reports

p.m. (pro memoria): token entry / figures not available yet

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Creating greater synergy between European and national budgets

__________________________________________________________________________________________

3.1.5. Humanitarian and Development aid

EU action in the field of development is based on the European Consensus on Development

signed in 2005, whereby all EU Member States and the EU institutions agreed to a common EU

vision of development. The EU’s contribution is focused on certain areas of intervention,

responding to the needs of partner countries, and identifies a number of shared values, goals and

principles which all actors in Europe implement in their development policies. The EU is committed

to increasing its official development assistance to 0.56% of its gross national income by 2010, on

the way to achieving the UN target of 0.7% by 2015. It has also been agreed that half of the

additional aid will go to Africa, and that the EU and its Member States are committed to making aid

more effective through better coordination and complementarity.

Desk research and interviews with stakeholders reveal that (humanitarian and) development aid is

a policy area with a relatively high level of budgetary coordination, both among Member States as

well as between the EU level and the Member States. The influence of United Nations strategies in

this domain on the development strategies in Europe should not be underestimated. As an

illustration, the EU has agreed in the European Consensus on Development to increase its official

development assistance by 2015 and imposes coordination. Moreover, achieving the Millennium

Development Goals established within the UN framework is regarded as a fundamental

underpinning of EU policy.

DG Development and Relations with African, Caribbean and Pacific (ACP) countries is responsible

for the Commission’s input to EU external relations with about half the countries in the world and

for drawing up development policy overall. It aims to underline the added value of a Europe

working together to tackle common challenges. Consequently, DG Development drafts

cooperation strategies with ACP countries and overseas countries, and coordinates and monitors

all the funding that is provided through the European Development Fund (EDF) and the

Development Cooperation Instrument (DCI) – the two main EU financial instruments for

development policy.

Other DGs of the Commission are also involved in shaping the humanitarian and development

strategies of the EU:



DG Trade helps developing countries expand their external trade via improved access to

the EU market;



DG External Relations is accountable for the Commission relations with the outside world

in general (whereas DG Development works through predefined programmes for specific

countries);



Europe Aid: is responsible for the implementation of the EU’s external aid programmes,

based on the policies of DG Development and DG External Relations;



DG ECHO (the European Commission Humanitarian Office) provides direct emergency

relief to victims of disaster and war outside the EU;



DG Enlargement monitors financial assistance to potential and future EU countries.

Official Journal of the European Union, The European Consensus on Development, (2006/C 46/01), 24/2/2006

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

Table 15: Breakdown of EU expenditure in humanitarian and development aid, by heading (1)

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Commitments

Chapter 19 09 — Relations with Latin

America

Cooperation with developing countries in

Latin America

Chapter 19 09 — Total

Payments

Committments

Payments

Committments

Payments

Committments

Payments

19 09 01

€ 356.268.000

€ 306.484.268

€ 309.484.268

€ 353.681.000

€ 355.681.000

€ 329.810.000

€ 332.810.000

€ 346.327.000

€ 347.827.000

€ 310.085.282

€ 339.764.080

€ 341.001.717

-10,1%

-9,2%

Chapter 19 10 — Relations with Asia,

Central Asia and Middle East (Iraq, Iran,

Yemen)

19 10 01 01 Cooperation with developing countries in

Asia

19 10 01 02 Aid for the rehabilitation and reconstruction

of Afghanistan

19 10 02

Cooperation with developing countries in

Central Asia

19 10 03

Cooperation with Iraq, Iran and Yemen

Chapter 19 10 — Total

Title 21 — Development and relations

with ACP S tates

Administrative expenditure of Development

and relations with ACP States policy area

Food security

Non-State actors in development

Environment and sustainable management of

natural resources, including energy

Human and social development

Geographical cooperation with ACP States

Development cooperation actions and ad hoc

programmes

Policy strategy and coordination for

Development and relations with ACP States

policy area

Expenditure on administrative management

of programmes committed in accordance

with the former Financial Regulation

Title 21 — Total

€ 523.450.000

€ 160.000.000

€ 124.478.000

€ 46.970.000

€ 854.898.000

€ 483.097.103

€ 145.000.000

€ 70.000.000

€ 60.000.000

€ 769.397.103

€ 517.156.000

€ 144.000.000

€ 104.714.000

€ 49.630.400

€ 827.500.400

€ 464.690.000

€ 150.000.000

€ 69.667.000

€ 60.000.000

€ 755.357.000

€ 521.729.936

€ 144.000.000

€ 63.357.009

98 449 000

€ 839.535.945

€ 476.818.026

€ 121.365.827

€ 52.719.913

€ 18.000.000

€ 672.602.480

€ 490.787.095

€ 162.100.000

€ 61.009.860

€ 108.680.000

€ 836.576.955

€ 496.063.262

€ 180.995.316

€ 40.096.620

€ 73.997.963

€ 791.153.159

-2,6%

-19,9%

74,6%

-18,9%

-2,7%

21 01

-4,1%

€ 306.661.077

€ 402.466.452

€ 218.263.951

€ 203.345.000

€ 156.411.491

€ 307.109.045

€ 32.779.000

€ 19.373.000

€ 306.661.077

€ 548.700.000

€ 170.000.000

€ 154.300.000

€ 148.471.430

€ 230.000.000

€ 29.900.000

€ 19.577.000

€ 300.144.538

€ 715.185.000

€ 216.987.000

€ 143.409.150

€ 140.882.500

€ 301.239.000

€ 32.579.000

€ 17.677.000

€ 300.144.538

€ 662.000.000

€ 160.000.000

€ 142.569.050

€ 147.200.000

€ 215.200.000

€ 32.579.000

€ 18.222.000

€ 340.081.543

€ 216.955.668

€ 215.306.765

€ 100.984.220

€ 154.303.937

€ 326.962.429

€ 29.769.429

€ 18.466.527

€ 340.081.543

€ 258.209.564

€ 173.534.877

€ 77.365.680

€ 126.749.518

€ 228.161.245

€ 24.060.331

€ 13.187.644

€ 319.778.083

€ 201.277.345

€ 210.854.099

€ 84.384.556

€ 95.286.940

€ 346.663.948

€ 29.275.273

€ 17.157.155

€ 319.778.083

€ 301.378.700

€ 168.548.269

€ 80.711.055

€ 128.951.934

€ 161.863.492

€ 29.252.242

€ 20.004.196

82,1%

0,9%

91,2%

15,1%

42,1%

2,2%

-2,1%

21 02

21 03

21 04

21 05

21 06

21 07

21 08

21 49

—

€ 1.646.409.016

€ 1.607.609.507

€ 1.868.103.188

p.m.

€ 1.677.914.588

—

€ 1.402.830.518

€ 3.413

€ 1.241.353.813

€0

€ 1.304.677.398

€ 22.299

€ 1.210.510.271

32,8%

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Table 16: Breakdown of EU expenditure in humanitarian and development aid, by heading (2)

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Commitments

Title 23 — Humanitarian aid

Administrative expenditure of Humanitarian

aid policy area

Humanitarian aid including aid to uprooted

people, food aid and disaster preparedness

Title 23 — Total

Payments

Committments

Payments

Committments

Payments

Committments

Payments

23 01

23 02

€ 29.045.155

€ 791.318.000

€ 820.363.155

€ 29.045.155

€ 791.318.000

€ 820.363.155

€ 28.509.197

€ 767.851.000

€ 796.360.197

€ 28.509.197

€ 767.851.000

€ 796.360.197

€ 26.933.863

€ 928.829.614

€ 955.763.478

€ 26.933.863

€ 868.799.352

€ 895.733.215

€ 26.553.204

€ 731.429.572

€ 757.982.776

€ 26.553.204

€ 731.302.504

€ 757.855.707

9,4%

8,2%

Total Community expenditure on

'Human. & developm. aid'

Total approp. - outturn EU Community

budget

% of total EU Community budget

€ 3.677.938.171 € 3.506.854.033

€ 3.847.644.785

€ 3.562.441.785

€ 3.545.956.940

€ 126.979.000.000

2,8%

€ 3.119.774.790

€ 104.294.090.000

3,0%

€ 3.239.001.208

€ 3.100.520.855

€ 124.132.790.000 € 101.882.620.000

3,1%

3,5%

€ 116.974.800.000 € 111.506.490.000

2,8%

Source: own calculations, based on the EU annual budget reports 2007, 2008, 2009 - Budget Online

Legend:

Hatched pattern: data are not provided by the EU annual budget reports

p.m. (pro memoria): token entry, figures not available yet

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.1.6. Common foreign and security policy (CFSP)

The Maastricht Treaty reflected, among other things, a desire among EU Member States to

strengthen foreign policy, with the introduction of a second pillar for CFSP based on

intergovernmentalism (meaning that the unanimity is required among the Members of the Council

of Ministers)

. The “intergovernmentalism” approach limits the influence of EU institutions, other

than the Council of Ministers. Subsequently, the Amsterdam Treaty introduced the position of High

Representative for CFSP to coordinate and represent the EU’s foreign policy, a position

strengthened by the Treaty of Lisbon with the creation of the High Representative of the Union for

Foreign Affairs and Security Policy within the European Commission.

The objectives of the foreign and security policy are to:



Safeguard common values, fundamental interests, independence and integrity of the EU;



Strengthen the security of the EU in all ways;



Preserve peace and strengthen international l security;



Promote international cooperation;



Develop and consolidate democracy, rule of law and respect for human rights.

CFSP expenditure is charged to the general budget of the European Union, with the exception of

expenditure arising from operations having military or defence implications. In addition, the EU

treaty enables rapid access to budget appropriations for urgent financing of initiatives in the

framework of the common foreign and security policy, and in particular for preparatory activities

for the Petersberg tasks (humanitarian tasks and rescue of nationals, peace-keeping tasks, tasks of

combat forces in crisis management, including peacemaking, etc.). A start-up fund consisting of

contributions from the Member States is also created to fund preparatory activities for the

Petersberg tasks, which are not covered by the general budget of the EU.

The second CFSP pillar was later removed by the Treaty of Lisbon in 2009.

SOU, Alm.del - 2011-12 - Bilag 178: Invitation til Interparlamentarisk møde om det europæiske semester

Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Table 17: Breakdown of EU expenditure in CFSP, by heading

Appropriations 2010

Appropriations 2009

Outturn 2008

Outturn 2007

Evolution

2007-2010

(%)

Commitments

Title 19 — External relations

Administrative expenditure of External

relations policy area

M ultilateral relations, cooperation with third

countries in the areas of migration and asylum,

and general external relations matters

Common foreign and security policy (CFSP)

European Instrument for Democracy and

Human Rights (EIDHR)

Relations and cooperation with industrialised

non-member countries

Crisis response and global threats to security

European Neighbourhood Policy and relations

with Russia

Preparatory action — Cooperation with

middle income group countries in Latin

America

Aid for the rehabilitation and reconstruction of

Afghanistan

Preparatory action — Business and scientific

exchanges with India

Preparatory action — Business and scientific

exchanges with China

Preparatory action — Cooperation with

middle income group countries in Asia

Policy strategy and coordination for External

relations policy area

Expenditure on administrative management of

programmes committed in accordance with the

former Financial Regulation

Payments

Committments

Payments

Committments

Payments

Committments

Payments

19 01

19 02

€ 435.309.871

€ 52.959.000

€ 280.891.000

€ 154.224.200

€ 23.640.000

€ 295.711.882

€ 1.722.667.073

p.m

€ 160.000.000

—

p.m

€ 31.500.000

—

€ 435.309.871

€ 50.000.000

€ 225.000.000

€ 148.400.000

€ 17.713.000

€ 256.305.160

€ 1.384.200.000

€ 3.000.000

€ 145.000.000

€ 4.500.000

€ 1.300.000

€ 417.287.070

€ 51.309.000

€ 242.750.000

€ 148.354.000

€ 28.207.000

€ 261.252.000

€ 1.645.182.039

€ 2.000.000

€ 144.000.000

€ 5.000.000

€ 2.000.000

€ 417.287.070

€ 35.000.000

€ 234.000.000

€ 139.902.000

€ 21.297.000

€ 253.786.269

€ 1.357.973.000

€ 3.000.000

€ 150.000.000

€ 5.000.000

€ 4.000.000

€ 2.000.000

€ 25.806.000

p.m.

€ 387.207.238

€ 52.154.313

€ 289.154.619

€ 142.837.332

€ 24.863.146

€ 246.909.666

€ 1.735.317.847

€ 1.500.000

€ 150.000.000

€ 5.000.000

€ 2.000.000

€ 24.617.520

—

€ 387.207.238

€ 54.157.619

€ 194.816.148

€ 112.160.840

€ 15.932.293

€ 202.612.949

€ 1.493.695.509

€0

€ 150.000.000

€ 3.000.000

€ 2.000.000

€ 21.712.324

€ 808

€ 374.994.049

€ 47.955.438

€ 159.470.690

€ 133.542.917

€ 24.482.337

€ 212.053.754

€ 1.628.876.011

€ 374.994.049

€ 18.786.506

€ 89.892.247

€ 123.900.833

€ 11.595.512

€ 104.593.751

€ 1.400.819.735

16,1%

166,1%

150,3%

19,8%

52,8%

145,0%

-1,2%

19 03

19 04

19 05

19 06

19 08

19 09 02

19 10 01 02

19 10 01 03

19 10 01 04

19 10 01 05

19 11

19 49

€ 162.100.000

€ 7.000.000

€ 180.995.316

€0

€ 32.400.000

p.m.

€ 33.350.000

—

€ 24.984.636

€0

€ 22.129.365

€ 828.124

46,4%

Total Community expenditure on 'CFS P'

Total approp. - outturn EU Community

budget

% of total EU Community budget

€ 3.156.903.026

€ 2.703.128.031

€ 2.985.691.109

€ 124.132.790.000

2,4%

€ 2.649.051.339

€ 101.882.620.000

2,6%

€ 3.066.561.681

€ 126.979.000.000

2,4%

€ 2.640.295.728

€ 104.294.090.000

2,5%

€ 2.782.459.833

€ 116.974.800.000

2,4%

€ 2.328.535.438

€ 111.506.490.000

2,1%

16,1%

Source: own calculations, based on the EU annual budget reports 2007, 2008, 2009 - Budget Online / Legend: hatched pattern: data are not provided by the EU annual budget reports p.m. (pro

memoria): token entry / figures not available yet

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.2. ANALYSIS OF NATIONAL BUDGETS AND THEIR LEVEL OF IMPLEMENTATION

This chapter aims to analyse the policy priorities of four Member States (Slovenia, Belgium, France

and Portugal) for the five selected policy areas: education, R&D, social policy, development and

humanitarian aid, and foreign and security policy. The analysis is based on information obtained

from interviews with national government stakeholders, as well as from desk research (official

government document, policy strategies, etc.). Moreover, the analyses focus on the level of

compatibility of the national objectives with the policy priorities at EU level.

3.2.1. Education

3.2.1.1.

Overall analysis (EU-27)

In all 27 Member States, a significant share of public expenditure is spent on education, of which

staff accounts for the largest amounts of expenditure

. Primary and secondary education is

predominantly a responsibility of the national governments. The EU primarily focuses on tertiary

education and lifelong learning programmes.

The table below provides an overview of public expenditure in the Member States regarding

education. It should be noted that the analysis only covers public expenditure and does not

include private funding to educational purposes (through school fees, materials, boarding fees,

meals, etc.)

. The data in the table indicate that



In 2006, public expenditure on education in the Member States was equivalent to 5.04 %

of GDP. Since 2003, public expenditure in the Member States is decreasing from 5.14% of

EU-27 in 2003 to 5.04% in 2005 and 2006.



The highest public spending on education is to be found in Denmark (7.98 % of GDP in

2006), followed by Cyprus (7.02 %), Sweden (6.85 %), and Finland (6.14%). Also Malta is

generally recognised as a Member State with a high level of public spending on

education. The proportion of public expenditure on education is below 4% of GDP in

Slovakia and Luxemburg

. However, it should be taken into consideration that the

tertiary education system in Luxemburg is undersized and that the majority of tertiary

students attend courses in surrounding Member States (Belgium, Germany and France).



GDP growth could mask the efforts that Member States have been made in education

spending. In absolute terms, the majority of the Member States recorded a significant

increase in education spending.



The cost of teaching increases substantially with each step forward within the education

system. This means that the expenditure per pupil/student is higher for universities than

for primary schools. Nevertheless, the secondary level accounts for the highest

proportion of total education spending, as a larger share of the total number of pupils are

present at the level. Austria, Denmark and the Netherlands, have the highest expenditure

per student (combined for all levels of education).

Based on interviews with education government officials in the Member States.

Within this respect, it should be noted that at the tertiary level, spending on R&D can be significant and is included in

the data.

Eurostat database, most recent ‘Public expenditure on education in the EU’, 2009 (15/03/2010)

Although data for 2006 are not available for these countries, Greece and Romania reported figures below 3% in earlier

years.

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Table 18: Public expenditure on education, 2006, % of GDP, allocations of expenditure to levels of

education

% of GDP

2006

5,04

6,00

4,24

4,61

7,98

4,40

4,80

4,74

4,28

5,58

4,73

7,02

5,07

4,84

3,41

5,41

5,46

5,44

5,25

5,72

3,79

6,14

6,85

5,48

€ 4.008,10

€ 7.477,20

€ 8.583,10

€ 3.061,70

€ 5.006,70

€ 6.323,40

€ 2.940,00

€ 6.388,90

€ 7.411,00

€ 7.937,40

1,00

0,41

0,40

0,53

0,54

0,51

0,47

0,34

0,60

0,39

Expe nditure pe r

pupil/stude nt

(all le ve ls)*

€ 5.940,90

€ 7.012,90

€ 2.138,90

€ 4.441,90

€ 8.329,50

€ 6.461,60

€ 3.216,60

€ 6.578,10

€ 6.141,30

€ 6.509,90

€ 6.464,70

€ 7.100,90

€ 3.126,10

€ 2.761,40

pre -

primary

le ve l, %

GDP (all

le ve ls)

0,50

0,71

0,77

0,54

0,87

0,46

0,36

0,00

0,55

0,63

0,50

0,34

0,66

0,59

primary

le ve l, %

GDP (all

le ve ls)

1,18

1,06

1,41

0,84

0,62

1,89

0,65

1,19

1,61

1,10

1,12

1,19

1,95

1,29

0,73

1,83

1,06

1,37

1,01

1,71

1,58

2,56

0,67

1,27

1,71

1,61

Se condary

le ve l, % of

GDP (all

le ve ls)

2,23

2,22

2,55

1,90

2,22

2,95

2,18

2,33

2,00

1,68

2,63

2,24

3,08

2,21

2,52

1,58

2,33

2,18

2,55

2,05

2,12

1,42

1,76

2,59

2,68

2,37

1,04

1,50

1,48

0,96

1,00

1,24

0,90

1,94

1,84

1,10

Te rtiary

le ve l, % of

GDP (all

le ve ls)

1,13

1,12

1,32

0,73

1,23

2,27

1,11

0,92

1,14

0,95

1,19

0,80

1,65

0,91

1,00

C ountry

European Union (27)

Euro area (16 countries)

Belgium

Bulgaria

Czech Republic

Denmark

Germany

Estonia

Ireland

Greece

Spain

France

Italy

Cyprus

Latvia

Lithuania

Luxembourg

Hungary

Malta

Netherlands

Austria

Poland

Portugal

Romania

Slovenia

Slovakia

Finland

Sweden

United Kingdom

Source: Eurostat

Shaded=data are not available on Eurostat.org

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.2.1.2.

Slovenia

Policy priorities

The table below briefly explains the current main policy priorities in the field of education in

Slovenia.

STRATEGIC OBJECTIVE/POLICY

PRIORITY

General education and development

of adult education and learning

BRIEF EXPLANATION

Enhancing skills and competence levels during the various stages of

life, improving the life quality of each individual and equal

opportunities for more social inclusion, are considered as necessary

conditions for successful economic development and promotion of

democracy.



Increase general-educational and cultural level, personal

development and social inclusion;



Active citizenship;



Focus on health education;



Preservation of cultural traditions and national identity;



Developing writing skills;



Reducing social disparities;



Reducing the number of early school leavers;



Lifelong learning.

Adults will be provided with various forms of and opportunities to

acquire or complete:



Elementary education;



Lower vocational, secondary vocational, technical or general

education;



Higher professional education.



Investing in programmes that aims to enhance writing skill, to

increase knowledge as well as others skills to obtain better

employment opportunities; and

Establishing a national professional qualifications certificate

system.

Raising the level of education

Connecting education

market needs

labor

Source: Uradni list Republike Slovenije (Official Gazette of the Republic of Slovenia); Resolution on the National Programme on

Adult Education in the Republic of Slovenia to 2010;

http://www.uradni-list.si/1/objava.jsp?urlid=200470&stevilka=3149

Compatibility with EU strategic objectives

The Slovenian priorities in the field of education are mentioned in the Single Programming

Document (hereafter SPD) submitted by Slovenia to the European Community for financial

assistance. The Resolution on the ‘National Programme on Adult Education to 2010’ followed the

guidelines and recommendations of the Commission put forward in the ‘Memorandum of Lifelong

Learning’, ‘Targets for the Future of Education and Training’, and ‘Standards in Education and

Training until 2010’. Based on this, as the table below demonstrates, we can conclude that

Slovenia’s strategic objectives in the field of education are in line with EU strategic objectives.



The table below includes the five main policy priorities of the European Commission in

the field of education. Based on the information available, the table indicates the extent

to which Slovenia focuses on these objectives.

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

EU STRATEGIC OBJECTIVE/POLICY PRIORITY



Lifelong learning

Mobility (learning abroad)

Promotion of active citizenship

Promoting equity and social cohesion

Promoting entrepreneurship & culture

of innovation

CONGRUENT/COMPATIBLE/SIMILAR

Yes

Not specified in the resolution

Yes

Not specified in the resolution.

Source: Resolution on the National Program on adult

education in the Republic of Slovenia until 2010

Source: DG Education and Culture, Strategic

Framework for European Cooperation in Education

and Training (‘ET 2020’)

The table below shows the relative amounts and percentages of EU, public and private expenditure

for the period from 2005 to 2007. Data for 2004 was not available and for 2008-2010 has yet to be

published.

Table 19: Weight of EU funds in the area of education, Slovenia, 2005-2006

TYPE OF

EXPENSES

2005

% OF TOTAL

EXPENDITUR

E IN 2005

2006

% OF TOTAL

EXPENDITUR

E IN 2006

2007

% OF

TOTAL

EXPENDI

TURE IN

2007

86%

13%

EU funds

Public

expenditure

Private

expenditure

Total

21.190.119

1.499.344.851

457.607.244

76%

23%

12.714.906

1.623.539.476

242.542.981

86%

13%

17.172.000

1.638.660.000

253.626.000

1.978.142.213

100%

1.878.797.363

100%

1.909.458.000

100%

Source: Statistical Office of the Republic of Slovenia,

http://www.stat.si/novica_prikazi.aspx?id=1303

;

The data indicates that EU funds, at 1% of total expenditure for this three-year period, are of

relatively little importance/weight in total expenditure in education. The data presented suggest

limited dependence on EU funding, and a limited leverage effect of EU funding, for the three years

presented. This is also demonstrated by the figure regarding the distribution of public expenditure

between national budgets and the EU budget at the end of this chapter.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.2.1.3.

France

Policy priorities

STRATEGIC OBJECTIVE/POLICY

PRIORITY

Focus on lifelong learning



SHORT DESCRIPTION

Developing new competences and skills, irrespective of age and

employment status.

Lifelong-learning, including of teachers.

Establishment of GRETAs, or clusters of organised training and

education programme for adults. These rely on secondary

schools resources and venues. Their aim is to provide a wide

educational offer at local level.

Every year almost 100,000 students leave secondary school

without a diploma, of whom 42,000 (2008) have no of any

qualification. The priorities are better coordinated action by the

public administration and information info sharing on young

people at risk of dropping out.

The improvement of the guidance process is a key factor in

making sure that the chosen professional path corresponds to

students’ expectations. This has to be included in the reform of

the secondary schools (lycées).

Orientation should be at the core of secondary school

education. Promotion of insertion into professional life of

students of technical high schools and offices to foster is a

priority.

Reduce early school leaving



Improve the orientation process for

secondary school students



Source: Website French Ministry of Education -

www.education.gouv.fr

/ Ministry of Higher Education:

http://www.enseignementsup-recherche.gouv.fr/pid20006/innovation-recherche-et-developpement-economique.html

Compatibility with EU strategic objectives

EU strategic objective/policy priority

Lifelong learning

Mobility (learning abroad)

Promoting active citizenship

Promoting equity and social cohesion

Promoting entrepreneurship & culture of innovation

Source: DG Education and Culture, Strategic Framework for

European Cooperation in Education and Training (‘ET 2020’)

Congruent/compatible/similar

Yes

Not specified in the strategy

Yes

Not specified in the strategy.

Source: Website French

www.education.gouv.fr

Ministry

Education

3.2.1.4.

Belgium

Policy priorities

In Belgium, education is a competence of the three language communities (Flemish, French-

speaking and German-speaking). The Flemish government strongly focuses on enhancing the

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

alignment between the education system and the needs of the labour market, as the Region

suffers from a high number of skill shortages. The reinforcement of the education system in the

bigger cities is another Flemish priority, as well as promotion of learning of the Flemish language

by immigrants. The French Community puts the emphasis on improving technical education and

stimulating multilingualism.

The table below provides an overview of the education policy priorities of the Flemish government

and the French Community government

STRATEGY OBJECTIVE

Flanders

Create

open,

personalities

polyvalent

and

strong



stimulating



Recognise teaching staff as a key asset



Build bridges between education and the local,

regional and international community

Investing in durable and modern infrastructure

Source: Flemish Minister of Education, Policy strategy Education 2009-2014 (Beleidsnota Minister van Onderwijs)

BRIEF EXPLANATION

Active citizenship

Peace education

Sustainable development education

Promotion of social inclusion

Reforming the secondary school system

Increasing lifelong learning

Closing the digital gap

Promoting Dutch as a second language for

immigrants

Creating first work experience and stimulating

internships in companies

Increasing

attractiveness

scientific

and

technological professions

Enhanced recruiting of highly educated teachers

Training and skills development for teachers after

school

Professionalising Human R policy for teaching staff

Enforcing education in the biggest cities

Shaping the international dimension of education

(policy)

Create opportunities for every talent

Promote learning

multilingualism

Dutch

and

Prepare students for entrance in the labour

market



French Community

Harmonise of education and training and

improvement of cooperation between actors in

the field

Improve the image of technical and vocational

education, as well increasing the attractiveness

of scientific and technical studies



Creation of ‘Pôle de formations’ (training clusters)



Reinforcing the image of technical and vocational

education

Expanding the offer of scholarships, first work

experiences, etc. (also internationally)

Lifelong learning

Increase investments in infrastructure

Stimulate multilingualism

Improve alignment between the objectives of

education and the realities of the labour

In agreement with the European Parliament, it was decided to limit the scope of the Belgian case to

Flanders, the French Community Government and the Walloon region. The study does not cover the

Brussels Region, nor the German-speaking Community in Belgium.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

market

Source: Walloon government, Marshallplan 2.0, 2009

Compatibility with EU strategic objectives

In all three communities, particular attention is paid to lifelong learning and vocational training.

EU STRATEGIC OBJECTIVE/POLICY

PRIORITY

CONGRUENT/COMPATIBLE/SIMILAR

Flemish government

Lifelong learning

Mobility (learning abroad)

Promote active citizenship

Promote equity and social cohesion

Promote entrepreneurship & culture of

innovation

Source: DG Education and Culture, Strategic

Framework for European Cooperation in

Education and Training (‘ET 2020’)

French Community

Yes

Not specified in the

strategy

Yes

Source: Walloon government,

Marshall plan 2.0, 2009

Yes

Not specified in the strategy

Yes

Not specified in the strategy.

Source: Flemish Minister of

Education,

Policy

strategy

Education 2009-2014

The current economic and financial crisis has acted as a stimulus to the Community governments

in Belgium to speed up their investments in education infrastructure, particularly in the bigger

cities where there is a lack of capacity. Although this is necessary given the low levels of

investments in infrastructure during the last two decades, investments in schools and educational

infrastructure are above all regarded as a measure to stimulate economic recovery.

The growing emphasis on lifelong learning and a tighter connection between the education

system and the labour market institutions fits into the broader objective of the Communities of

ensuring employability, rather than concentrating on job security.

Overall, the leverage effect of these EU funds on the mobilisation of national resources is relatively

limited, as in most cases co-financing is not compulsory. However, EU funds are being valuable in a

number of areas – particularly, mobility of students and vocational training programmes.

Additional funding depends on the willingness of governments. The Flemish government, for

example, provides limited additional funding to the EU funds, as the table below demonstrates

Statistics obtained from Vzw Epos – National Education contact point for EU Programmes. The figure

excludes the costs related to the implementation of the EU funds in Flanders (implementation agencies),

which are primarily carried by the Flemish Education budget. No figures could be obtained for the Walloon

region and French Community.

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__________________________________________________________________________________________

Table 20: The relative weight of EU funds in education, Belgium (FL), 2007-2008

2007

European Commission

Comenius

Erasmus

Leonardo Da Vinci

Grundtvig

Transversaal Programma

Europass

Bologna Experts

€ 1.676.685

€ 5.180.076

€ 2.898.085

€ 378.928

€ 43.653

€ 35.000

€ 18.453

€ 10.230.880

Flemish Ministry of Education

Comenius

Erasmus

Leonardo Da Vinci

Grundtvig

Transversaal Programma

Europass

Bologna Experts

€ 47.500

€ 605.000

€0

€ 13.500

€0

€ 75.000

€ 13.417

€ 754.417

€ 40.000

€ 2.055.000

€0

€ 21.000

€0

€ 75.000

€ 15.770

€ 2.206.770

€ 1.859.191

€ 5.716.237

€ 3.120.411

€ 344.422

€ 58.085

€ 35.000

€ 15.403

€ 11.142.751

2008

Source: Yearbook 2007-2008, Epos vzw. National Agency responsible for the implementation of the European Life Long

Learning Programme in Flanders

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.2.1.5.

Portugal

Policy priorities

Based on information from the Portuguese Ministry of Education, the level of training and

qualifications of the Portuguese population is below EU-average. This implies that the government

needs to make considerable and long-term investments to tackle the challenges of school

underachievement, school dropouts and low levels of qualification. The current education policy of

Portugal continues to tackle these long-standing challenges.

STRATEGY OBJECTIVE

Significantly reduce school underachievement

Promote social inclusion



BRIEF EXPLANATION

Promote of learning of the Portuguese language

and mathematics;

Increase widespread access and use of ICT as an

essential tool for integration into the knowledge

society

Improve teaching and learning conditions

Raise literacy levels

Encourage students to attend school until

they reach the age of 18

Consolidate vocational-type training provision

Increase the number of Adult Education and

Training courses for adults with limited schooling



Invest in enhancing reading and writing skills



Expand network of Centres for the Recognition,

Validation and Certification of Competencies,

under the name “New Opportunities Centres”;

Extend the Recognition, Validation and

Certification of Competencies System to the 12th

year of schooling;

Encourage student mobility;

Promote the internationalisation of education

and training;

Invest in institutions that are more open to

society and the economy.

Improve quality and performance of

higher education institutions



Source: Portuguese Ministry of Education, current policy strategy (info received from the Ministry of Education)

Compatibility with EU strategic objectives

EU STRATEGIC OBJECTIVE/POLICY PRIORITY

Lifelong learning

Mobility (learning abroad)

Promotion of active citizenship

Promoting equity and social cohesion

Promoting entrepreneurship & culture of innovation

Source: DG Education and Culture, Strategic Framework for European

Cooperation in Education and Training (‘ET 2020’)

CONGRUENT/COMPATIBLE/SIMILAR

Yes

Not specified in the strategy

Yes

Source: Portuguese Ministry of Education, current

policy strategy

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

During recent years, there has been an increase in Portuguese public expenditure in this field. In

2009, the increase was used for:



€300 million spent on the ‘Investment & Employment Initiative’, which aims to invest in

school infrastructure and equipment;



€300 million EUR more, as a result of changes in budget accounting rules;



€170 million for investments in widespread use of ICT in schools. Following a decision by

the Government, personal laptops were provided at no cost and the Government

subsidized access to broadband internet in an amount of €12/student



€155 million spent on a 2.9% rise in the salaries of the employees of public

administrations.

Although public expenditure in education remained constant, the Portuguese government also

made substantial efforts in the years before 2007, enabled by a series if savings that took place

(increase of teacher’s working hours, an increase of minimum retirement age for teachers,

rationalisation of the number of primary schools). For the future, an increase in public expenditure

is expected.

The Portuguese government also made substantial efforts in the years before 2007 by redeploying

funds saved by increasing teacher’s working hours, increasing the minimum retirement age for

teachers and rationalising the number of primary schools). For the future, a further increase in

public expenditure is expected.

In Portugal, the proportion of pupils pursuing education or training beyond the minimum school-

leaving age has long been below the European average. The PRODEP programme, Portugal's

Educational Development Programme, which is 60-70% co-financed by the EU within the context

of the Structural Funds, was established in 1989 to radically reverse this situation. It has now been

running for more than 20 years and has generally led to major improvements in Portuguese

education (for example, drop in fall-out of scholars).

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.2.2. Research and development

3.2.2.1.

Overall analysis (EU-27)

Annex 3 gives a high-level overview of public expenditure in the EU Member States on R&D, in

absolute and relative terms, based on the so-called GBOARD classification. The GBOARD

classification does not cover data on actual public spending, but on budgeted public spending.

However, it is assumed that GBOARD-based data are more complete and consistent than COFOG

data.

This shows that the highest R&D intensity in 2008, i.e. ratio of R&D to GDP, is in Spain, Portugal and

Finland, and the lowest in Latvia, Lithuania and Poland. Had private sector R&D been taken into

account, the highest R&D intensity (based on 2007 figures) would be found in the Nordic Member

States, Austria and Germany

, and the lowest in Cyprus, Slovakia, Romania and Bulgaria. The

highest increase of public sector R&D intensity between 2001 and 2007 was in Austria, Portugal

and Estonia.

The table below gives a detailed overview of public expenditure in R&D in the Member States (in %

of total government expenditure, % of GDP, and broken down by socio-economic objectives)

The table below indicates that:



Across all EU Member States, the bulk of R&D public expenditure comes from the

academic sector, through General University Funds. In terms of percentage of GDP,

Austria and Denmark have the highest levels of R&D public expenditure by the academic

sector. However, Eurostat does not go into detail with regards to the final destination of

expenditure through the General University Funds.



In 2008, Spain and Portugal were the only Member States where spent more than 2% of

total public expenditure went on R&D. Public expenditure on R&D public expenditure in

the Nordic countries is above the EU-27 average, but is not ranked highest. This

underlines the fact that the share of private actors in R&D expenditure must be higher in

relative terms.



Germany, France and the UK together account for almost 50% of total public expenditure

in the EU-27 (cf. Annex 5).



In terms of percentage of GDP, the majority of the EU-12 score below the EU-27 average.

Latvia, Lithuania, Slovakia and Malta have the lowest percentage of public expenditure

on R&D. Of the older Member States, Belgium, Ireland, Luxembourg and the United

Kingdom spending only modest amounts of their budgets on R&D activities.



Compared to the other Member States, France (0.21% of GDP), the UK and Spain (both

0.15%) are spending more on R&D activities in the defence sector. With regards to

industrial production and technology, Finland (0.27% of GDP) and Spain (0.22%) have the

highest share of R&D public expenditure in terms of GDP. For France (0.07 % of GDP),

Belgium, Italy and Germany (0.04%), R&D in the field of space is a key priority. The

greatest R&D efforts in the agricultural sector are found in Member States with a relatively

strong presence of agriculture, such as Bulgaria (0.07% of GDP), Ireland and Spain (0.06%

of GDP). Estonia, United Kingdom and Spain (all 0.10% of GDP) allocate a relatively large

amount of resources to R&D activities in the health sector.

Eurostat Newsrelease, Science, Technology and Innovation in Europe R&D expenditure in the EU27 stable at 1.85% of

GDP in 2007, 8/09/2009

The table lists General University Funds as a budget line for R&D expenditure, i.e. block grants provided by all levels of

government in Europe, Canada, and Japan to the academic sector that can be used to support departmental R&D

programmes that are not separately budgeted for.

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

Table 21: Share of government appropriations or outlays for research and development (% of GDP), per socio-economic objective – 2008

% /total

government

expenditure

1,53

1,58

1,62

1,18

0,85

1,29

1,65

1,82

1,67

1,35

2,60

1,43

1,30

0,95

0,75

0,70

1,15

0,87

0,42

1,55

1,41

0,70

2,22

1,06

1,23

0,79

1,99

1,53

1,36

%/ GDP

0,72

0,75

0,76

0,59

0,32

0,56

0,86

0,79

0,67

0,57

1,07

0,75

0,63

0,41

0,29

0,26

0,44

0,43

0,19

0,71

0,69

0,30

1,02

0,41

0,55

0,28

0,97

0,81

0,64

0,01

0,07

0,01

0,03

0,10

0,15

0,08

0,09

0,02

0,27

0,05

0,02

0,01

0,08

0,24

0,34

0,16

0,01

0,00

0,02

0,01

0,04

0,02

0,05

0,01

0,02

0,06

0,02

0,06

0,01

0,10

0,03

0,01

0,05

0,03

0,00

0,09

0,26

0,09

0,17

0,20

0,14

Defense

0,08

0,09

0,08

0,00

0,01

0,00

0,05

0,01

0,00

0,15

0,21

0,01

0,00

0,01

0,00

0,01

0,08

0,11

0,06

0,01

0,03

0,04

0,02

Industrial

production

0,08

0,10

0,18

0,03

0,07

0,09

0,10

0,06

0,07

0,21

0,06

0,07

0,01

0,03

0,01

0,02

0,06

0,12

0,17

0,33

0,40

0,01

0,02

0,03

0,04

0,01

0,05

0,02

0,03

0,13

0,18

0,21

0,19

0,14

Environment

0,02

0,01

R&D expenditure

from General

University Funds

0,22

0,23

0,24

0,10

0,01

0,15

0,37

0,31

Space

0,03

0,04

0,01

0,04

0,01

0,00

0,02

0,07

0,04

0,00

0,02

0,00

Agriculture

0,03

0,01

0,07

0,03

0,02

0,05

0,06

0,01

0,03

0,06

0,05

0,00

0,01

0,04

0,01

0,04

0,01

Health

0,06

0,05

0,01

0,00

0,03

0,07

0,04

0,10

0,03

0,10

0,05

0,08

0,03

0,02

0,00

0,04

0,00

0,03

0,02

0,01

Energy

0,03

0,01

0,03

0,02

0,03

0,02

0,03

0,04

0,00

0,01

0,00

0,01

0,00

0,02

0,01

General R&D

Others

other than GUF

0,11

0,09

0,16

0,11

0,19

0,15

0,14

0,25

0,19

0,11

0,03

0,04

0,15

0,10

0,00

0,22

0,13

0,00

0,11

0,09

0,16

0,06

0,07

0,08

0,07

0,06

0,04

0,09

0,03

0,12

0,06

0,00

0,16

0,05

0,10

0,02

0,07

0,24

0,12

0,03

0,01

0,06

0,04

0,02

1,02

0,07

0,05

0,02

0,07

0,05

C ountry

European Union (27)

European Union (15)

Euro area (16 countries)

Belgium

Bulgaria

Czech Republic

Denmark

Germany

Estonia

Ireland

Greece

Spain

France

Italy

Cyprus

Latvia

Lithuania

Luxembourg

Hungary

Malta

Netherlands

Austria

Poland

Portugal

Romania

Slovenia

Slovakia

Finland

Sweden

United Kingdom

Source: Eurostat, R&D Public Expenditure, (GBOARD), 2008 (most recent data)

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.2.2.2.

Slovenia

Policy priorities

According to 2009 European Innovation Scoreboard

, Slovenia is an innovation follower with

innovation performance below those of the innovation leaders but close to the EU27. Slovenia

records a moderate growth of innovation performance, which is above the average EU27.

Increased performance is particularly driven by strong growth of private R&D expenditure.

The R&D policy priorities of Slovenia are defined in the strategic document ‘National Research and

Development Program 2006-2010’. Currently, the Ministry for Higher Education, Research and

Development, is drafting a new strategic document for the period 2011-2015.

DG RESEARCH, 2009 European Innovation Scoreboard, Pro-Inno Europe, 2010

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__________________________________________________________________________________________

STRATEGIC OBJECTIVE/POLICY PRIORITY

Increase the impact of R&D on the domestic

environment

Increase the effectiveness of investments in

R&D and quality performance



BRIEF EXPLANATION

Encourage more research, development and innovative cooperation between enterprises and the research sphere

Enhance transfer of technology and innovations between companies.

Gradually concentrate R&D efforts in priority areas;

Change in the ratio of programming and project financing to 40/60;

Redefine the mission and role of universities and public research institutions.

Establish an evaluation system for R&D activities that is also open to international experts

Achieve the EU average with regards to the number of scientific publications;

Increase the proportion of highly quoted publications in scientific literature ;

Increase the number of registered European patents per million inhabitants (from 36 in 2003 to 70);

Enhance the international reputation of universities in Slovenia.

Recognise the role of knowledge and science as a key factor for social and economic progress

Create and enable an environment that supports a boost of investments in science, technological progress and

entrepreneurship.

Focus on the successful transfer of knowledge and R&D results

Set up a regulatory and financial environment conducive to stimulating the emergence and growth of high-tech

and other innovative enterprises, by strengthening the Fund for Entrepreneurship, and start-up and venture

capital development.

Pursue objectives pursued through public tenders, which are published in accordance with the guidelines of the

Ministry, the Slovenian Technology Agency (TIA) and the Public Research Agency of the Republic of Slovenia

(ARRS). Key instruments/objectives managed by ARRS are:

Infrastructure programmes;

Project research centres;

European Framework programmes and international studies;

International scientific cooperation;

Increase the number of foreign scientists in Slovenia;

Participation in the European Research Area;

Instruments ,implemented by TIA as follows (year 2008-2009):

Public tender "Young researchers in the economy";

Public tender in support of the national innovation system;

Public tender to promote organisations that support innovative activity

Develop a supportive environment for R&D

Increase the number of high-tech and

innovative companies

Monitor the functioning of the R&D system

and implementation of the National R&D

programme



Source: Information received from the Ministry for R&D and Higher Education (National Research and Development Program 2006-2010)

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

Compatibility with EU objectives

Slovenia adopted and follows the objectives that have been set at EU level (e.g. the Barcelona

objective of investing 3% of GDP in R&D). Slovenia is actively participating in reinforcing the

European Research Area (ERA), both through its participation in political networks, as well as

through various ERA-net projects, with the goal to advance national scientific policies and funding

systems for science. The new National Research and Development Programme 2011 - 2015 focuses

on the 5 axis of ERA, which are:

• Promotion of research careers and mobility of researchers;

• Joint program tenders;

• Research infrastructures;

• International cooperation;

• The transfer of knowledge.

The table below includes the 5 main policy priorities of the European Commission in the field of

R&D. We indicate to which extent Slovenia focuses on these objectives.

EU STRATEGIC OBJECTIVE/POLICY PRIORITY

Collaborative research

Focus on ‘frontier’ research (ideas) –

centres of excellence

Promotion of researcher mobility and

career development of researchers

Focus on research infrastructure (capacity)

Nuclear research

CONGRUENT/COMPATIBLE/SIMILAR

Yes

Not specified in the R&D strategy

Source: The National R&D Programme 2006 - 2010

Source: FP7 Programme, website DG Research

Public expenditure for R&D has increased rapidly in Slovenia over recent years. In nominal terms,

the proportion of funding for R&D in 2009 relative to 2008 increased by 37%. Compared with

previous years - 8.4% between 2007 and 2008 in nominal terms - this represents a significant

increase. The funding for R&D contains resources for science and technology together.

The increase in R&D expenditure in 2009 is partially due to implementation of some anti-crisis

measures. However, it is recognised by the government that increased R&D efforts do not

immediately pay-off in the short term. R&D policy demands a long, stable period of continued

growth in assets.

For the future, a gradual growth of public funding is expected for R&D - coming from a

combination of national and EU structural funds - with the objective that public sector expenditure

on R&D should amounts to 1% of GDP. The Slovenian government also has the ambition of

establishing a dynamic environment for private R&D investments and to increase private R&D

expenditure, up to 2% of GDP.

The EU Structural Funds are considered as a key instrument for financing R&D activities in Slovenia.

EU cohesion funds significantly impact funding for science by combining EU and national funds. In

2009, the Ministry for Higher Education, Science and Technology published a tender for Centres of

Excellence: eight 8 centres were selected and approximately €80 million of funds were allocated.

85% is financed by EU Structural Funds, the other 15% by the national budget.

According to a Slovenian official, Slovenian research institutions – which are often less known - and

companies face some difficulties in obtaining FP7 funding. The participation and performance of

EU-12 Member States – such as Slovenia - vis-à-vis the EU-15 in the "Cooperation" and "Capacities"

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__________________________________________________________________________________________

Programmes during the first year of FP7 implementation presents a mixed picture

. While EU 12

participation in terms of numbers of submitted and retained proposals is lower than their share of

the EU 27 research workforce, the performance is significantly better when one compares their

share of GERD (the portion of GNP that goes to research and development) to their share of EC

contributions.

These findings should, however, be put in the context of the current science and technology socio-

economic conditions in EU27. For example, in 2006 the R&D expenditure per researcher (GERD per

number of researchers) in EU 15 amounted to € 121,000 – four times that of the corresponding EU

12 figure of €31.000

The first FP7 Monitoring Report also gives some reasons that could explain the lower performance

of EU-12 Member States: the lack of a competitive research environment at national level,

problems encountered by smaller countries that cannot be expected to be competitive in all

thematic fields of FP7, etc.

Measures that have been taken to help enhance participation rates in the Framework Programme

in Slovenia include DG RTD support for a strong National Contact Point network and the

establishment of Technology Platforms at the national level, to support successful industrial

involvement in R&D activities.

Nevertheless, Slovenia actively supports the development of ERA and Slovenian researchers are

involved in individual projects. One of the main objectives of the government is to increase the

success rate of Slovenian researchers in international public tendering.

3.2.2.3.

France

Policy priorities

According to the 2009 European Innovation Scoreboard, France is an innovation follower, with an

innovation performance slightly above the EU average.

However, France is among the slowest

growers with regard to innovation performance. Relative strengths, compared to the country’s

average performance, are in the human resources sector, finance and support and relative

weaknesses are in firm activities (Firm investments, entrepreneurship, etc.).

STRATEGIC OBJECTIVE

Improve the competitiveness of the

French R&D system

BRIEF EXPLANATION

Competing for funding is a relative new practice in the French R&D

sector. France is increasingly aligning its funding schemes to those at

EU level, in order to obtain more EU R&D funding. The creation of the

Agence Nationale de Recherche

(ANR) was a response to that need.

The Ministry in 2007 created sectoral consultation groups (groupes

concertation sectoriels)

to ensure national coherence, to have better

access to funding, to increase the effectiveness of research and

development planning and to involve a range of stakeholders.

Innovation needs public as well private research. Support to private

R&D has been boosted by tax credits since 2008 and by the actions of

the ANR in favouring partnerships between public and private actors

in R&D. An example is the funding of a competition for innovative

Focus on collaborative research

Foster private R&D

DG RESEARCH, First FP7 Monitoring report, February 2009

ibidem

DG RESEARCH, 2009 European Innovation Scoreboard, Pro-Inno, 2010

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

companies and the inception of the Carnot ‘label’ for institutes

endowed with shared laboratories.

Focus on a limited number of

priorities

Increase the number of researchers

and the attractiveness of research

professions

Create a culture of innovation and

research

Source: Website Interview with French official from the French Ministry of Research/ http://www.education.gouv.fr/pid219/la-

recherche-en-france.html

French R&D tries to focus more on the sectors where French industry

traditionally

competitive

(nuclear,

aerospace,

pharmaceutical, life science)

Compatibility with EU strategic objectives

EU STRATEGIC OBJECTIVE/POLICY PRIORITY

Collaborative research

Focus on ‘frontier’ research (ideas) –

centres of excellence

Promotion of researcher mobility and

career development of researchers

CONGRUENT/COMPATIBLE/SIMILAR

Yes

Source: Interview with official from the French Ministry of

Research

Focus on research infrastructure (capacity)

Nuclear research

Source: FP7 Programme, website DG Research

According to interviewees, overall coordination is not working adequately because the EU and

France have different financing schemes. The bulk of French expenditure for research is not

allocated on a competitive basis. For budgetary coordination to work, both levels should have the

same financing mechanism. Although there is no real coordination of objectives, EU funds are

gaining in importance because of the current pressure on national budgets, with Member States

looking to EU funds to offset the decrease of R&D expenditure in their national budgets.

According to a French official, the Commission should take the lead in enhancing the coordination

and in proposing tighter coordination measures than those existing today. “’The Broad Economic

Policy Guidelines’ are regarded as too soft and lax. The Lisbon process is regarded as a failure

because of this weak OMC [open method of coordination] method”. The suggestion was made that

the new 2020 debate should start from the acknowledgement that the EU needs more incentive

mechanisms for coordinating budgetary policy. A positive incentive mechanism might be needed.

The evolution of R&D policy priorities has been driven by budget cuts and by the fact that the total

amount of EU R&D funds has increased significantly. The logic is to give more importance to merit

and less to redistribution of funds. Competing for funding is a relatively new idea in France. As a

result, the French R&D sector can face difficulties in competing and taking part in tender

procedures. The system is currently being redesigned, as the French government aims to attract

researchers and students.

The EU R&D strategy is becoming more and more important for France, according to the CNRS

(Centre

national pour la recherché scientifique).

The current R&D strategy of France focuses on the

introduction of competitive schemes to provide funding to public research bodies, and includes

the long term objective of shifting to a ‘call for proposal’ type of allocation like FP7 or the UK or

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

German funding schemes. Now that the FP7 financial envelope has been substantially increased

and that Member States are reducing or not increasing the amount of budget they devote to R&D,

the EU research programme is taken into consideration much more. As a result, all Member States

are trying influence the R&D planning and priorities at EU level in order to put the emphasis on the

sectors where they are stronger. For France this is the case in life sciences, space research and

nuclear physics.

The ANR (Agence

Nationale de la recherche),

managing €900m per year, increasingly works on the

basis of calls for proposals and connects to the EU working methods in certain domains. According

to an R&D official, France is not currently fully exploiting the potential of FP7. France is fourth in

terms of number of applications, but it gets only half of what Germany receives. The success rate of

France is higher than the EU average, but the size of French projects is smaller. The lower success

rate of French researchers could be partly explained by the means of financing. French R&D actors

tender to prefer national funds, even at a time when these are shrinking and EU funds are growing.

The EU funds already represent a large share of R&D funds in certain areas such as medical R&D

3.2.2.4.

Belgium

Policy priorities

Belgium is one of the innovation followers and has an innovation performance above the EU27

average. Performance grows slowly and lies below that of the EU27. A relative weakness of

performance is the relatively low level of private R&D expenditure.

The Belgian research system is highly decentralised. The main responsibility for research policy and

funding lies with the regions and the communities. Research policies are distributed across several

governments, which enjoy complete autonomy of decision-making power. The law states that the

primary jurisdiction for research policy lies within the regions and communities, while the federal

state retains some competences as an exception to this rule. The governmental responsibilities in

the research area are arranged as follows:



The regions (Flanders, Wallonia, Brussels-Capital) have authority over research policy for

economic development purposes, thus encompassing technological development and

applied research;



The communities (French-, Flemish- and German-speaking) are responsible for education

and fundamental research at universities and higher education establishments; and



The federal state retains the responsibility for research areas requiring homogenous

execution at the national level, and research in execution of international agreements (e.g.

space research or nuclear research).

This institutional context has had a profound influence on the governance of research policy.

According to the Federal Planning Bureau, the complex Belgian institutional context is one of the

factors that undermine the effectiveness of research policies, as it can lead to fragmentation of

scarce resources

Interview with officials, French Ministry of Research

FEDERAL PLANNING BUREAU OF BELGIUM, Public Spending on Innovation in Sweden, Belgium and

Finland, 2006

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

STRATEGIC OBJECTIVE

Flanders

Maximise the results of R&D efforts

Improve government support instruments

for SMEs

Promote cooperation and partnerships

among actors in the research sphere

Focus on a limited number of economic

clusters

Profile region of Flanders as an international

actor

Invest in ‘excellence’ and the dynamics of

‘frontier research’



Improve

opportunities

researchers

for

talented



Between research institutes and businesses

Focus on thematic priorities and bigger projects

Cooperation with neighbouring countries and regions

Multilateral cooperation (for example, in the space

industry)

Based on a bottom-up approach (priorities are not

imposed on R&D actors by the government)

Optimalisation of evaluation procedures at government

level

Stimulate technical and scientific professions

Career development for researchers

From idea to economic maximisation and societal

impact

BRIEF EXPLANATION

Invest in top research infrastructure

Source: Flemish Minister for Innovation and Science, policy strategy 2009-2014

Wallonia and French Community

Reinforce the ‘pôles de compétitivité’ –

competitiveness clusters

Introduce a new cluster devoted

renewable energy technologies



Creating synergies between existing clusters

Increased attention to sustainable development

Stimulate integration of R&D into the

innovation strategies of businesses

Intensified cooperation between the public research

world and the private sector, particularly SMEs

Better access to funding in order to maximise R&D

efforts

Focus on process from ‘proof of concept’ to market

product and value

Dissemination of R&D efforts and results

Improve working conditions of researchers (salary,

career development, etc.)

Consolidate excellence of research

Source: Walloon Government, Marshall plan 2.0



Compatibility with EU strategic objectives

EU STRATEGIC OBJECTIVE/POLICY PRIORITY

1. Collaborative research

2. Focus on ‘frontier’ research (ideas) –

centres of excellence

3. Promotion of researcher mobility and

career development of researchers

4. Focus on

(capacity)

research

infrastructure

Yes

CONGRUENT/COMPATIBLE/SIMILAR

WAL

Yes

Not specified

Federal

n.a.

Yes

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

5. Nuclear research

Source: FP7 Programme, website DG Research

n.a.

Source: The National

R&D Programme 2006 –

2010

n.a.

Source: Marshall

plan 2.0

Yes

n.a.: not a competence of this government level

Not all R&D funding schemes in Belgium are aligned with those at EU level. For example, the

Flemish government applies more of a bottom-up approach, which allows researchers to submit

applications for funding of R&D activities that do not relate to the research priorities set by the

government. The government strategy in the Walloon region has more elements of a top-down

approach and is more aligned to the way of funding at EU level.

The EU Research Framework Programme (FP7) is increasingly gaining importance in Belgium.

Based on a first monitoring report of FP7 by the European Commission, Belgium has the second

highest success rate with regards to FP7 applications after the Netherlands. The R&D actors in

Belgium receiving EU contributions are mainly to be found in ICT, biotechnology, space industry

and nanotechnology.

None of the regions responsible for research policy has conducted an impact assessment that

could identify the exact leverage effect of EU funding on public R&D expenditure. According to an

interviewee, EU funding for R&D activities is considerable. However, he doubts that the co-

financing model would have a significant impact on the mobilisation of national resources, due to

fact that under FP7 projects cannot be eligible for both EU funds and national financing at the

same time. The interviewee said that an overwhelming majority of R&D actors granted FP7 funding

would not have carried out their R&D projects without EU funding. The involvement of EU money

also enables carrying projects to be carried out faster and on a larger scale.

3.2.2.5.

Portugal

Policy priorities

According to the European Innovation Scoreboard 2009, Portugal is a moderate innovator, scoring

below the EU 27-average. However, since 2002, the Portuguese government invested many efforts

to make progress and to support Portuguese universities. As a result, Portugal has become one of

the growth leaders, or a catching-up country that has grown at a faster pace than the EU2732.

Relative strengths, compared to the country’s average performance, are in Finance and support

and Innovators while relative weaknesses are in firm investments and throughputs. In 2007,

Portugal introduced a sector-driven R&D cluster policy strategy with the aim of concentrating all

efforts in a limited number of sectors (Pólos

de Competitividade e Tecnologia)

DG RESEARCH,

European Innovation Scoreboard 2010, Pro-Inno Europe, http://www.proinno-

europe.eu/sites/default/files/page/10/03/I981-DG%20ENTR-Report%20EIS.pdf

CORDIS-ERAWATCH, Portugal: Basic characterisation of the research system, cordis.europa.eu/erawatch

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

STRATEGIC OBJECTIVE

Increasing public expenditure for R&D

purposes

Increasing the number of scholarships and

subsidies for university and post-university

education

Increasing financial government support for

international patent registration

Supporting businesses in investing in R&D

BRIEF EXPLANATION



Developing R&D projects by establishments of higher

education, the state and private non-profit

institutions in priority areas for the Portuguese

economic and competitive development,



Incentives for business R&D through the development

of R&D projects by companies in an individual or

collective capacity or in consortium with other entities

within the National Scientific and Technological

System

Creating R&D centres in enterprises

Developing participation in European R&D

programmes;

Financial Engineering Instruments for Innovation

Funding and Risk-Sharing, aiming to boost the

dissemination of alternative funding instruments (of

which risk capital and seed capital are examples) that

offer better conditions to support business

investment projects



Source : Compromisso com a Ciência para o Futuro de Portugal, 2007 / Operational Programme 'Thematic Factors of

Competitiveness'

Compatibility with EU strategic objectives

EU STRATEGIC OBJECTIVE/POLICY PRIORITY

1. Collaborative research

2. Focus on ‘frontier’ research (ideas) – centres of

excellence

3. Promotion of researcher mobility and career

development of researchers

4. Focus on research infrastructure (capacity)

5. Nuclear research

Source: FP7 Programme, website DG Research

CONGRUENT/COMPATIBLE/SIMILAR

Yes

Not specified

Source: Compromisso com a Ciência para o Futuro de

Portugal, 2007 / Operational Programme 'Thematic

Factors of Competitiveness'

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Creating greater synergy between European and national budgets

__________________________________________________________________________________________

3.2.3. Social policy

3.2.3.1.

Overall analysis (EU-27)

Annex 5 provides an evolution of public expenditure on social protection in the Member States for

2002-2007. In 2007, public expenditure on social protection in the Member States accounted for

17.9% of the EU-27 GDP. The share of social protection in the EU-27 GPP has shrunk from 18.9% in

2003, to 18.3% in 2007, to 17.9% in 2007. Even if health expenditure is taken into consideration

the shrinking trend remains valid.

The table below gives an in-depth overview of the destination of public expenditure on social

protection in the Member States.

Overall, there are strong disparities between Member States in the EU-27. Public expenditure on

social protection, as a percentage of GDP, was above 20% in 2007 in France (22.2%), Denmark

(21.7%), Sweden (21.6%) and Germany (20.3%) and below 10% in Romania (9.3%), Estonia (9.6%)

and Latvia (8.4%). The wide range of percentages can be explained by the existing differences in

living standards, but also reflects the different social protection systems that are in place in the EU.

Other conclusions that can be drawn from the table below are

35 36

In all Member States, the bulk of public expenditure on social protection is allocated to ‘Old age’

(personal services for the elderly and pensions). In countries with a relatively high percentage of

civil servants, such as Greece, France and Italy, ‘Old Age’ accounts for more than 12% of GDP, or

more than half of their total expenditure on social protection.

In relative terms, Sweden (5.4% of GDP), Denmark (4.9%) and Hungary (3.7%) spend more on

sickness and disability benefits than the other Member states.

France (0.8% of GDP) and Hungary (0.9%) account for the highest public expenditure ratios on

housing.

Eurostat data based on the ESPROSS classification includes healthcare public expenditure in social protection analyses.

o data are available for five countries: Belgium, Luxembourg, the Netherlands, Romania and Slovakia

Social protection expenditure data based on ESPROSS, which is usually used by Eurostat, gives a much higher ratio of

social protection to GDP (26-27%), as ESPROSS also includes health expenditure data. Health is treated by COFOG in a

separate heading.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

Table 22: Public expenditure on social protection, % of GDP, by COFOG category, 2007

Country

European Union (27)

European Union (15)

Euro area (16 countries)

Belgium

Bulgaria

Czech Republic

Denmark

Germany

Estonia

Ireland

Greece

Spain

France

Italy

Cyprus

Latvia

Lithuania

Luxembourg

Hungary

Malta

Netherlands

Austria

Poland

Portugal

Romania

Slovenia

Slovakia

Finland

Sweden

United Kingdom

Source: Eurostat

In abs.

(millions

EUR)

2.218.825,0

2.202.773,5

1.679.368,3

57.188,0

3.794,5

16.364,7

49.071,6

493.200,0

1.499,5

19.152,0

42.439,0

137.040,0

420.291,0

281.815,0

1.556,8

1.780,8

3.144,5

5.730,8

17.541,5

769,9

90.919,0

53.835,3

48.614,1

28.512,8

12.266,1

5.352,9

5.807,8

35.758,0

71.657,1

313.731,5

total social

protection, % of

GDP, 2007

17,9

18,0

18,7

17,1

13,1

12,9

21,7

20,3

9,6

10,1

18,7

13,0

22,2

18,2

9,9

8,4

11,0

15,3

17,4

14,1

16,0

19,9

15,6

17,5

9,8

15,5

10,6

19,9

21,6

15,3

Sickness

and

disability

Old Age Survivors

Social

Other social

Family and

Housing

Unemployment

children

exclusion

protection

0,2

2,7

4,9

2,5

2,0

2,6

1,8

2,2

2,6

1,7

0,2

1,5

2,8

3,7

2,0

1,9

2,3

1,9

2,8

4,2

5,4

2,7

9,8

6,5

9,4

5,5

2,9

12,8

6,3

12,7

12,3

4,0

5,0

6,8

7,7

11,8

9,0

10,0

8,1

8,9

10,5

7,3

0,6

2,0

0,1

0,9

1,4

1,9

1,5

2,6

0,1

0,0

0,5

1,3

1,8

1,6

1,7

1,6

1,5

0,7

0,5

0,1

2,4

2,1

4,9

2,1

1,4

2,3

0,6

0,5

2,5

1,1

1,8

0,9

1,1

2,4

1,1

2,3

1,2

1,1

1,7

2,5

2,6

2,4

0,1

0,7

0,1

0,0

0,2

0,1

0,8

0,0

0,1

0,9

0,2

0,0

0,1

0,0

0,2

0,3

1,1

0,4

1,2

0,9

0,1

0,4

0,0

0,3

0,4

0,0

1,7

0,2

1,5

0,3

0,8

0,2

0,3

0,6

0,8

1,1

0,1

0,3

2,2

0,4

1,0

0,4

1,6

0,5

0,7

0,3

0,4

0,6

0,5

1,2

1,0

1,2

0,5

2,1

1,5

0,3

0,6

0,2

1,2

0,1

0,0

1,6

0,3

0,1

0,0

1,4

0,4

1,0

0,2

0,5

0,2

0,1

1,5

0,3

0,6

0,0

0,3

Overall 2007 figures for EU27, EU15 and the Euro area are not available in the Eurostat database.

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3.2.3.2.

Slovenia

Policy priorities

The table below briefly explains the four strategic objectives of social policy in Slovenia. The

information comes from the policy strategy ‘The Resolution on National Programme of Social

Security’ for the period 2006–2010.

STRATEGIC OBJECTIVE

Contribute to greater social inclusion of

individuals and integration of Slovenian

society

BRIEF EXPLANATION

The goal of the national government is to contribute to greater

social inclusion and integration of individuals with Slovenian

companies in social security and other areas that are important

for social policy law (labour and employment, education, health,

family policy, housing policy).

The government aims to increase access to social services, by

enhancing equal opportunities.

In addition to improved access to programmes and services,

users attach particular importance to the quality of services and

the levels of benefits. The government aims to achieve efficiency

in the allocation of social benefits and improve the quality of

services and social programmes.

Improve access to social services and

programs

Achieve greater efficiency in the

allocation of monetary social aid and

improve the quality of services and

programmes, while improving targeting

and efficiency

Strengthen professional autonomy,

managerial autonomy and rational

management of social security

Source: Website Slovenian Ministry of Social Affairs

Compatibility with EU objectives

The Resolution on the ‘National Programme of Social Security’ for the period 2006 – 2010 is based

on the Lisbon Strategy and congruent with EU strategic objectives. The table below includes the

main policy priorities of the European Commission in the field of social policy and the extent to

which Slovenia focuses on these objectives.

EU STRATEGIC OBJECTIVE/POLICY PRIORITY

1. Mobility of workers

2. Social protection and social inclusion

3. Diversity and non-discrimination

4. Gender equality

5. Adjustment to globalisation

6. Improving the institutional capacity of

employment services

7. Development of human capital and

potential

Source: Website DG Employment, ESF and PROGRESS

programme

CONGRUENT/COMPATIBLE/SIMILAR

Not specified in Resolution on

National Social Security 2006-2010

Yes

Not specified in Resolution on

National Social Security 2006-2010

Yes

Source: Resolution on National Social

Security of the Republic of Slovenia 2006 –

2010

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

The share of EU funding in the area of social policy has grown in Slovenia, but remains modest

relative to total public expenditure in this area.

Table 23: The relative weight of EU funds in the area of social policy, Slovenia, 2004-20007

TYPE OF

EXPENSES

2004

(2004)

84.318.144

6.322.000.000

89.000.000

6.612.000.000

2005

(2005)

96.000.000

7.036.000.000

2006

(%)

2006

2007

(2007)

138.000.000

7.381.000.000

EU funds

Total public

expenditure

Source: http://www.stat.si/novica_prikazi.aspx?id=2728; Statistical office of the Republic of Slovenia

3.2.3.3.

France

Policy priorities

STRATEGIC OBJECTIVE/POLICY

PRIORITY

Enhancing social protection and

social inclusion

Strengthening the coordination of

social policies at EU level

Adjusting and coping with the

challenges of globalization

Diversity and social inclusion

BRIEFLY EXPLANATION

France aims to keep older employees at work for a longer time and to

ensure better access to jobs for youth.

This policy is justified by the need of preventing a race to the bottom

in the social field among EU countries. The French stance on the

working time directive for instance is driven by this need.

France played a leading role in the creation of the European fund for

adjustment to globalization.

Source: Interview with an official from the Ministry of Social Affairs

Compatibility with EU strategic objectives

EU STRATEGIC OBJECTIVE/POLICY PRIORITY

CONGRUENT/COMPATIBLE/SIM

ILAR

Not specified in the strategy

Yes

Not specified in the strategy

Source:

Interview with an official

Mobility of workers

Social protection and social inclusion

Diversity and non-discrimination

Gender equality

Adjustment to globalization

Improving the institutional capacity of

employment services

Development of human capital and

potential

Employment,

ESF

and

Source: Website DG

PROGRESS programme

from the Ministry of Social Affairs

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Despite the relatively modest size of funding in France, the ESF is said to play a useful role in French

social policy. A reform in 2009 created the establishment of the FISO

(fond

d’investissement social)

and a joint committee between the French state and social partners. This committee is informal in

nature and is aimed at counterbalancing the effects of the economic crisis and to draw up

combined programmes. A part of the one billion euro that is channelled through this committee is

devoted to keeping older employees longer at work and to tackle youth unemployment. The logic

is not to give incentives to early retirement, but to keep the level of employment stable. Another

FISO initiative relates to short-time work and the flexisecurity; a way to encourage people to

change their skills and develop new ones, so that it is easier to get a new job.

In terms of policy coordination between the EU and France, the debate at the moment focuses on

the 2020 strategy and on the initiatives under this umbrella. The two priorities that are pushed by

France are



a common EU target for employment rates, and



a common target for poverty reduction.

The current policy actions at EU level are in line with the traditional French position of advocating a

more social Europe. However the big question mark is over the role that the open method of co-

ordination will have in the coming 2020 strategy. The OMC has proven to be too much of a soft

method for policy coordination, but there is no clear alternative in sight. According to a French

government official, the OMC should be strengthened, without granting the ECFIN Council a

monopoly in this area. Similarly, the Broad Economic Policy Guidelines are felt to have played a

virtually non-existent role in this field. The role of the Guidelines in the policy process felt not to be

clear and interviewees question their positive impact on policy coordination.

Today, there is not really any debate in France on the benefits that an EU social policy would bring

to France. The French government does believe, however, that compliance with the social acquis

by all Member States, i.e. the enforcement of existing directives, should be reinforced. France has a

good record, but some other Member States have several potential infringement procedures for

the way the directives have been transposed and enforced. The French government fears a social

race to the bottom.

It has been difficult to obtain figures on public expenditure on social policy for France, as social

policy expenditure is split between the French state budget, the social security budget and the

budget of local authorities. The budget of the social security part is estimated around €300 billion a

year, probably the largest expenditure component in France. The budget of the French state for

social affairs is €10.5 billion a year.

The European component in the area of social policy is mainly the European Social Fund that

transfers around €800 million a year to France. Despite the limited size of ESF funding in France,

ESF is highly valued

, especially in a time of crisis when national budgetary constraints are tight

and unemployment is high.

3.2.3.4.

Belgium

Policy priorities

http://www.vie-publique.fr/actualite/alaune/emploi-quels-moyens-pour-fonds-daeur-tm-investissement-

social.html

Based on an interview with French official

Ibidem.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

STRATEGIC PRIORITY

Flanders

Keep and reintegrate older people into

employment



2. Increase labour market participation of

vulnerable groups (immigrants, disabled

persons, etc.)

3. Align labour supply and labour demand,

with particular attention to tackling skill

shortages

4. Stimulate social innovations in the

workplace

5. Align the education system to the needs of

labour market

6. Emphasise employability instead of job

security



Flanders faces very low participation rates of older

people in the labour market. Focus on flexible jobs

for older people

Raise awareness of employees and employers

Fight discrimination in the labour market and

stimulate

gender

equality

and

diversity

management

Through active labour market measures, improve

vocational training, competency management, etc.

Introduce flexible working time patterns

Stimulate internships for scholars; promote first

work experiences, etc.

Promote lifelong learning programmes

Enhance

skills

employees,

promote

entrepreneurship, introduce flexicurity measures

Focus on outplacement, career development

planning

Continue private-public cooperation mechanisms

and private market mechanisms

BRIEF EXPLANATION



7. Benefit from efficiency gains with regards to

reintegration of unemployed people



Source: Flemish Minister of Labour, Policy strategy 2009-2014 (beleidsnota Vlaams Minister van Arbeid)

Wallonia (and Brussels Government, for what concerns French Community matters)

1. Align the education system with the needs



Emphasise lifelong learning for employees

of the labour market

2. Maximise

technical

and

scientific

professions among youth, businesses and

the general public

3. Increase the labour market participation of

youth and younger labourforce

4. Increase multilingualism in order to

increase opportunities in the labour market

Source: Walloon government, Marshall plan 2.0



Job creation for youth

Youth action plan

Compatibility with EU strategic objectives

EU STRATEGIC

OBJECTIVE/POLICY PRIORITY

1. Mobility of workers

2. Social protection

social inclusion

3. Diversity

and

discrimination

and

non-

Yes

CONGRUENT/COMPATIBLE/SIMILAR

WAL

Yes

Federal

n.a.

Yes

The Regions in Belgium have competences for social inclusion. However, their competences are very

limited in social protection matter, which is primarily managed at Federal government level.

C.f. previous note.

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4. Gender equality

5. Adjustment

globalisation

6. Improving

the

institutional capacity of

employment services

7. Development of human

capital and potential

Source: Website DG Employment,

ESF and PROGRESS programme

Partly

(indirectly)

Yes

Partly

(indirectly)

Yes

Partly

(indirectly)

Yes

n.a.

Yes

Source: Policy strategy

2009-2014 of the Flemish

Minister of Labour

Yes

Source: Marshall plan 2.0

n.a.

Source: Policy strategy

2009-2014 of the Federal

Minister of Labour

n.a. = not a competence of this government level

Over the last five years, both the Flemish Government and the Walloon government have put the

emphasis on active labour market measures targeting the unemployed and disabled, through

closer monitoring and guidance, investments in the offer of training and language courses, etc. In

Flanders, there is a tendency to introduce quasi-market mechanisms, particularly with regards to

the reintegration of unemployed in the labour market. The enhancement of mobility of workers is a

key priority for all regional governments.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.2.4. Development aid

Overall, the EU-15 account for more than half of the global total of development aid. There is a

long-standing UN target of reaching a level of aid equivalent to 0.7 % of donors’ GNI. While EU

members, like other industrialised countries, have accepted this 0.7 % target for spending,

currently only Denmark, Luxembourg, the Netherlands and Sweden have reached this goal. In

order to work towards this target, the EU has established an interim goal – to reach collectively at

least 0.56% of GNI by 2010, thus providing a gradual increase in development cooperation funding.

The "old" EU member states committed to spend a minimum 0.51% of their GNI by 2010, whereas

the intermediate target for the "new" member states is set at 0.17% of their GNI.

The aims were set out in the December 2005 document ‘European Consensus on Development’

agreed by the European Parliament, Council and Commission , which seeks in particular to reduce

poverty, to develop democratic values, and to support national strategies and procedures. The

objective of the EU is to enable disadvantaged people in developing countries ultimately to take

control of their own development by addressing the main sources of their vulnerability, such as

access to food, clean water, education, health, employment, land and social services.

Table 24: Development Aid Public Expenditure, EU-15 DAC countries, 2004-2008 (% of GDP)

M.S.

Austria

Belgium

Denmark

Finland

France

Germany

Greece

Ireland

Italy

Luxembourg

Netherlands

Portugal

Spain

Sweden

Total EU DAC

2004

0,23%

0,41%

0,85%

0,37%

0,41%

0,28%

0,16%

0,39%

0,15%

0,79%

0,73%

0,63%

0,24%

0,78%

0,35%

2005

0,52%

0,53%

0,81%

0,46%

0,47%

0,36%

0,17%

0,42%

0,29%

0,79%

0,82%

0,21%

0,27%

0,94%

0,47%

0,44%

2006

0,47%

0,50%

0,80%

0,40%

0,47%

0,36%

0,17%

0,54%

0,20%

0,89%

0,81%

0,21%

0,32%

1,02%

0,51%

0,43%

2007

0,50%

0,43%

0,81%

0,39%

0,38%

0,37%

0,16%

0,55%

0,19%

0,92%

0,81%

0,22%

0,37%

0,93%

0,35%

0,39%

2008

0,43%

0,48%

0,82%

0,44%

0,39%

0,38%

0,21%

0,59%

0,22%

0,97%

0,80%

0,27%

0,45%

0,98%

0,43%

United Kingdom 0,36%

Source: OECD-DAC, Development database

The most recent expenditure data that could be found in the area of development aid only covered the 15

OECD-DAC Member States. Annex 6 provides an overview of public expenditure in this area for all EU

Member States, however, data are from 2006.

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Figure 1: ODA in terms of share of GNI, including New Member States

Source: EU Donor Atlas 2008

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

3.2.4.1.

Slovenia

Policy priorities

In the table below we briefly highlight the three strategic objectives in the field of humanitarian

and development aid in Slovenia. This information is obtained from interviews and the Resolution

on International Development Cooperation of the Republic of Slovenia to 2015.

STRATEGIC OBJECTIVE/POLICY PRIORITY

Focus on IPA – Instruments for pre-accession

Focus on ENPI – European neighbourhood

and partnership instrument

BRIEF EXPLANATION

Covering the Balkans and Turkey; Slovenia’s priority is to

focus on IPA related to Balkan pre-accession countries.

To improve cross-border cooperation with countries along

the EU’s external land and maritime borders, thus giving

substance to the goal of avoiding new dividing lines

(Northern Africa and the Eastern European countries that

border Russia).

The main instrument for providing Community aid for

development cooperation (technical and financial support). –

Slovenia will start paying into the EDF in 2010.

Focus on EDF – European Development

Fund

Source: Department for International Development Cooperation and Humanitarian Aid

Compatibility with EU objectives

The development and humanitarian aid policy of Slovenia is congruent with the EU strategic

objectives. It is based on the European Consensus on Development Aid to 2010 (effective 2005)

and complies with the objectives of the international community on development, especially with

the ambitions of the EU and the UN. Slovenia has adopted EU strategic documents in this area.

STRATEGIC OBJECTIVE/POLICY PRIORITY

Eradication of poverty in the context of sustainable

development, including pursuit of the Millennium

Development Goals

Achieve universal primary education

Promote gender equality and empower women

Reduce the mortality rate of children

Improve maternal Health

Combat HIV/AIDS

Malaria and other diseases

Ensure environmental sustainability and develop a

Global partnership for development.

Source: European Consensus on Development

BRIEF EXPLANATION

However differing in geographical scope (which is

much more limited), Slovenia’s main priorities are

related to the pursuit of the MDGs.

Yes

Source: Department for International

Cooperation and Humanitarian Aid

Development

Public expenditure on development aid is increasing in Slovenia. Slovenia reached 0.14% in

development and humanitarian aid of its GDP in 2010 and it is planning to reach 0.23% in 2015.

The European Consensus on Development (2005) set spending targets for its member countries at

0.17% of GDP in 2010 and 0.33% in 2015.

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3.2.4.2.

France

Policy priorities

France’s co-operation and official development assistance (ODA) policy is based on two major

priorities: to increase the amount of aid to developing countries and improve aid effectiveness. In

geographic terms, France has a particular interest in Africa, due to historical links, heritage and

political interests.

STRATEGIC OBJECTIVE/POLICY PRIORITY

Increasing financial efforts in developing

countries

Improving the efficiency and effectiveness

of aid

BRIEF EXPLANATION



Revise the means of allocating aid taking into account

the countries’ performances and the needs of the

populations

Implementing the Paris Declaration on Aid Effectiveness

Implementing institutional reforms in order to improve

the French aid delivery system

Geographical focus within the priority

solidarity zone is on Francophone Africa and

the least developed countries

Sectoral focus on seven priorities



Education,

Water and sanitation,

Health

Fight against AIDS,

Development of infrastructures in sub-Saharan Africa,

Agriculture and food security,

Protection of the environment, productive sector).

Source: Interview with French official from the Ministry of Foreign and European Affairs

Compatibility with EU strategic objectives

The development and humanitarian aid policy is congruent with the EU strategic objectives. It is

based on the European Consensus on Development to 2010 and complies with the objectives of

the international community on development, especially with the ambitions of the EU and the UN.

France has adopted EU strategic documents in this area.

France traditionally stands for a strong European mandate in the domain of development

cooperation and advocates a larger budget

. Specific French interests played a role in the creation

of the EDF and in strengthening other development funds. The French government has insisted on

having development policy included under the umbrella of foreign policy as they believe that it is a

vital part of this policy.

The mechanisms of coordination between EU and France relate to the prioritisation of the sectors

and the geographic areas of activities. Coordination between France and the EU has an informal

character, rather than a formal one, and often takes place at the level of Permanent Representation

of France to the EU. In the field of development cooperation France collaborates with other donors

- European and others - in countries where they are present (based on the Paris Agenda on Aid

Effectiveness).

Interview with French Ministry Official.

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Policy Department D: Budgetary Affairs

__________________________________________________________________________________________

According to a French official from the Ministry of Foreign Affairs, France is in favour of more

coordination with the EC, but there are also important discrepancies on the strategy to be

followed. The main example is aid blending. The EC mainly operates through grants, while the

French government wants more commitment to loans. The government’s stance is that multiple

types of interventions achieve more effective results and better value for money than only grants.

In terms of geographic areas, policy coordination is rather good between France and the EU, as

Africa - one of its geographic priorities - receives a substantial part of EU development aid.

Compared to the European Neighbourhood policy at EU level, France focuses less on Eastern

European neighbourhood countries (Belarus, Moldavia, Turkey and Ukraine). It feels policy

coordination could be strengthened with regard to relations with Brazil, China and India. These

emerging countries are not “developing” countries anymore and according to French interviewees,

another means of collaborating with them needs to be found. In this respect, the new

development policy looking ahead to 2020 risks looking fairly similar to the previous one, while the

world is changing rapidly.

Hence, the French government is interested in cooperating more with the EC and in fine-tuning

more the political objectives

. France is the only donor, together with the EC, that is present in

more than 150 countries. In some countries with major development challenges (Chad, Comores,

Madagascar), only France and the EU are present. The French government is concerned that in

2010 for the first time the volume of aid to Africa decreased, while it increased in Mediterranean

countries, Eastern Europe and Latin America.

3.2.4.3.

Belgium

Policy priorities

STRATEGIC OBJECTIVE/POLICY PRIORITY

The development aid strategy of Belgium focuses on

the Belgian efforts to achieve the UN Millennium

Development Goals



Promoting gender equality in partner countries

Fighting child labour in the cacao sector

Fighting malaria and AIDS in partner countries

Coping with the effects of climate change in

partner countries

Establishing a partnership in general more

specifically Central Africa

Enhance the institutions and structures in fragile

states

Fight piracy in East Africa, children soldiers,

sexual abuse

BRIEF EXPLANATION

Source: Federal Minister of Development Aid, Policy strategy Development and Humanitarian Aid, 2007-2012

Congruence and compatibility with EU strategic objectives

Ibidem

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Development and humanitarian aid policy is congruent with the EU strategic objectives. It is based

on the European Consensus on Development Aid to 2010 (effective 2005) and complies with the

objectives of the international community on development, especially with the ambitions of the EU

and the UN. Belgium has adopted EU strategic documents in this area.

Traditionally, Belgium geographically focuses its development efforts in Central Africa (Congo,

Ruanda, Burundi). Furthermore, there is an increasing focus of the Belgian government on the

fight against piracy in East Africa.

3.2.4.4.

Portugal

Policy priorities

Portuguese Development Cooperation has been mostly financed through a specific State budget

programme -the ‘Cooperation for Development Program’ – which consolidates a series of sectoral

budget lines. Moreover, the planned operations are part of the ‘Indicative Cooperation Programs

(PIC)” that are the instrument for the cooperation with each of its partner countries

STRATEGIC OBJECTIVE

Support the achievement of the MDGs

BRIEF EXPLANATION

Promoting sustainable development and regional and

global economic integration of developing countries, in

particular of Portugal’s main partners.

Portugal has endorsed the Monterrey Consensus concept

on partnerships, the Paris Declaration and the Accra

Agenda for Action principles and commitments

Promote aid

coherence

effectiveness

and

policy

Focus on Portuguese-speaking

Countries (PALOP) and East Timor

Promote and combine a

multilateral

approach

cooperation

Source: Interview with official IPAD

African

bilateral and

development

Compatibility with EU strategic objectives

Portugal has subscribed to the Millennium Development Goals (MDGs) as well as the EU

commitments on ODA targets and Aid effectiveness principles, including among others the

principle of Managing for results. These are the drivers behind the evolution of Portuguese

Development Cooperation Policy, instruments and management mechanisms as set out in the

“Strategic Vision for Portuguese Development Cooperation” approved by the Council of Ministers

in December 2006.

Africa is a priority for Portuguese development cooperation. Portugal’s Indicative Programmes of

Cooperation (PICs) by country include programmes that aim to enhance institutional capacity

building in Portuguese-speaking African Countries (PALOP) and East Timor. These are in line with

the EU policy objectives of promoting good governance and democracy in Africa (and elsewhere).

A concrete case of alignment between Portuguese development cooperation policy and that of the

EU is the focus on poverty reduction, the concentration of its geographic cooperation in a limited

number of countries i.e. the Portuguese-speaking African Countries (PALOP), which is congruent

with the EU policy objective of reinforcing development aid to Africa. The priority attached to

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supporting good governance and democracy through capacity building of state institutions is also

consistent with EU policy objectives.

Other examples of congruence between the Portuguese and EU interventions include:



Adoption of the EU common framework for drafting country strategy papers and joint

multiannual programming, as a guideline for the preparation of the PICs between

Portugal and each PALOP country and East Timor;



Portugal's decision and commitment to implement the EU Code of Conduct on Division

of Labour in Development Policy in its bilateral aid through the PICs.

In terms of budgetary coordination, there are no specific dedicated budget coordination

mechanisms, which are synchronised with national and EC budget procedures. However, there are

information and coordination mechanisms through the established Council groups (ACP, CODEV),

for example on contributions to EU-initiated Trust Funds, such as the ACP infrastructure trust fund,

and the water and energy facilities. There is also some ad-hoc coordination in global multilateral

funds such as the GFATM (Global Fund to Fight Aids, Tuberculosis and Malaria) or in instances such

as international conferences for reconstruction of countries. When a global EU pledge (Commission

and Member States) is to be announced there is also coordination through the Council groups and

conclusions.

Portuguese Official Development Assistance in terms of GNI has remained during the reference

period of 2004 to 2009 except for 2004 - when a 0.41% increase was registered following a decision

by the Portuguese Government on debt relief for Angola. Implementation has seen steady

increases since 2004 due to the shift in the Portuguese Agency to increased use of results-based

management approaches and instruments and also to the enhanced absorption capacity of some

partner countries receiving Portuguese ODA.

The ambition for the future is to increase expenditure in the light of the 2015 objective of reaching

0.7% of the GNI. However, the impacts of the financial crisis on the availability of funds for

humanitarian and development aid may be a constraint.

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3.2.5. Foreign and security policy (CFSP)

The European Defence Agency (EDA) collects defence spending data on an annual basis, showing

that in 2008, the 26 EDA participating Member States spent €200 billion on defence

. The data

includes both spending by Ministries of Defence and defence-related expenditure from other

sources (other Ministries, special budgetary lines). Over the period 2006-2008, total defence

expenditure by the participating Member States has remained almost constant. The total of €200

billion constitutes about 1.8 % of their combined € 12.3 trillion economies.

Based on data from the Stockholm International Peace Research Institute (2008), we see that:



Worldwide, France is ranked as the third greatest spender on defence (65.7 billion dollars)

in absolute terms, after the United States and China. The United Kingdom ranks fourth

(65.3 billion dollars), followed by Germany (ranked 6

with 46.8 billion), Italy (8

with 40.6

billion) and Spain (14

with 19.2 billion).



In terms of % of GDP, Greece is ranked first of all EU Member States (4.3% of GDP),

followed by Cyprus (3.8%), France (2.3%), United Kingdom (2.2%).



Many Member States do not reach the goal of 2 percent of national output or GDP, set by

NATO. Based on recent NATO data (defence spending 2008), Germany, Italy and Spain are

underachievers (1.3%).

Since the end of the Cold War, there has been a serious fall in the defence expenditures in the

Member States.

3.2.5.1.

Slovenia

Policy priorities and compatibility with EU objectives

The table below briefly explains the 8 strategic objectives/policy priorities in the field of security

policy in Slovenia. This information is based on policy strategy documents. Slovenia is fully

following and supporting the EU Security Strategy in all views, operations, institutions and

capacity. Slovenia has adopted and is following the EU Security Strategy (2008), hereon ESS. See

table below:

STRATEGIC

OBJECTIVE/POLICY

PRIORITY

Crisis centres

BRIEF EXPLANATION

Terrorism

Unauthorized

activities in the field

conventional

weapons, weapons

of mass destruction

and

nuclear

technology

The Republic of Slovenia is in accordance with her national interests involved in

international operations and missions in various crisis areas and is thereby

contributing to international peace, security and stability.

Terrorism, within Europe and worldwide, remains a major threat.

Threats to the Republic of Slovenia from terrorist organizations and groups are

relatively low today, but in the future it will greatly depend on the political, economic

and security operations of the Republic of Slovenia in the international environment.

In sense of security, a big concern is, that some countries, especially those that

support various forms of terrorism and extremism, do not accept norms accepted in

international (nuclear) non expansion regime by development and use of nuclear

technology in civil purposes, or will fully violate these norms.

EDA, Defense data: facts and figures, 2009

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Organized crime

Organized crime is a threat to international and national security. Organized crime is

a complex and long-term threat to the security of Slovenia, but in future Slovenia it is

expected that Slovenia will be more of a transit country for the organized crime

groups, especially for those from Balkans and less the target country.

Modern society depends heavily on the continuity and reliability of information

systems. Malfunctioning of these systems therefore pose a serious threat to the

functioning of public and private sector in general, and particularly to the key

functions of government and society.

Due to the diversity of information and communications systems, unlimited cyber

space and problems by monitoring the cyber space, also in Slovenia the spreading of

cyber crime can be expected.

Illegal migrations touch Slovenia mainly due to migration flows passing through its

territory (Slovenia is the Schengen border country).

The pressure of migration flows to the Republic of Slovenia in general and particularly

from South-Eastern Europe, will continue to identify important social-economic and

political-security situation in the world.

Inadequate use of natural resources in the past results in serious negative effect in

nature and living environment.

This strategic objective is facing difficulties in the supply of quality drinking water and

with limited natural features for the production of healthy food.

Cyber security

Illegal migrations

Limitation of natural

resources

and

habitat degradation

Climate change

Climate change is a "threat multiplier". Natural disasters, environmental degradation

and competition for resources exacerbate conflict, especially in situations of poverty

and population growth, with humanitarian, health, political and security

consequences, including greater migration.

Climate change is already affecting the national security of the Republic of Slovenia.

Global

financial, Global financial and economic risks have the effect of reducing the employment rate

economic and social of the population, that can grow into a wider or even general social crisis. These risks

risks

can also endanger Slovenian economic interests abroad and can attract suspicious or

otherwise questionable flow of foreign capital into Slovenia. Indirectly these kinds of

risks can challenge also other threats and consequently further reduce the prosperity

and national security of the Republic of Slovenia.

Source: Resolution on the national security strategy of the Republic of Slovenia for 2010;

http://www.uradni-

list.si/1/objava.jsp?urlid=201027&stevilka=1189

Slovenia is participating in the European Security and Development Policy (ESDP) operations in

Bosnia, Kosovo, in Chad and Central African Republic. Slovenia has been involved in the ESDP

operation in the Democratic Republic of Congo and with the EU in its support to the African Union

in Sudan / Darfur. Slovenia, together with Italy and Hungary in the second half of 2007, participated

in EU joint defense exercises.

3.2.5.2.

France

Policy priorities

STRATEGIC OBJECTIVE

Response to

challenges

emerging

global



BRIEF EXPLANATION

Environment (support to climate change effects, environment

preservation)

Sustainable development

Security policy (focused on Middle East and Mediterranean

security, NATO and OECD efforts)

Disarmament

Terrorism

Organized international crime

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Promotion of human rights and

fighting human rights violation

Supporting European Integration

Promoting of French language and

multilingualism

Source: Interview with Ministry of Foreign Affairs – www.diplomatie.fr



Accession of New Member States

European Security and Defence Policy (ESDP)

Compatibility with EU strategic objectives

France has always strongly supported European integration, especially of its political aspects. It is

also one of the most active actors in EU politics and policies. France’s level of „Europeanisation” of

the national foreign policy is of a high degree. France is considered a big proponent of the EU

Common foreign and Security policy (CFSP).

The objectives of the security policy of France and those of CFSP are aligned. One interviewee

stated:

Concerning the CFSP, we have seen how MS are collaborating to give more money to this pillar and get

more engaged in Afghanistan and Iraq. This is not yet an EU wide engagement, but it shows that the MS

are sometimes willing to expand the budget of the EU, or it is because Afghanistan and Iraq are

extremely unpopular subjects at home).

3.2.5.3.

Belgium

Policy priorities

STRATEGIC OBJECTIVE

Supporting actively further EU integration and the

implementation of the Lisbon strategy.



BRIEF EXPLANATION

Enhance

communitarianism

(not

intergovernmentalism) within the EU

Compliance with EU regulations and decisions

(transposition of EU law into national law, repair

infringements, etc.)

Coping with the effects of globalization and the

changing power balance in the world

Increase the competitiveness and innovation of

Belgian and EU businesses

Enhance economic and political relationships

with China, India, Brazil;

Contributing to the management of the current

financial and economic crisis and the changing

world

Enhance economic diplomacy and tighten economic

and political relationships with new, growing

economies

Encouraging the accession of new (former

Yugoslavian) countries to the EU

Continuing and enforcing the trans-atlantic

partnership as an essential priority

Tackling the risks of radical Islam



Tackling common challenges and risks (piracy

in Somalia, terrorism, Afghanistan, etc.)

Investing in economic development and

enforcement of the rule of law in developing

countries as a solution to terrorism

Enforce a breakthrough in a number of

concrete dossiers: the Iron Rhine, cross-border

cooperation, etc.

Reinforcing cooperation between the Benelux

countries

Supporting the development of Central Africa



Source: Federal Minister of Foreign Affairs, Policy strategy 2007-2012

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Compatibility with EU strategic objectives

Belgium has always been in favour a strong EU, that addresses political and security issues.

According to the Belgian government, Europe's foreign and security policy must boost its influence

at international level and foster internal cohesion. Concrete actions should not only be taken in the

areas of economic development, humanitarian aid, political cooperation, cultural cooperation,

human rights and democracy but also in connection with conflict prevention, crisis management,

rapid response to natural disasters, peace-making and peacekeeping.

3.2.5.4.

Portugal

Policy priorities

STRATEGIC OBJECTIVE

Promoting the Portuguese language around the

world

Disarmament and non-proliferation

Supporting European Security and Defence Policy

(ESDP)

BRIEF EXPLANATION

Enhancing the use of Portuguese as a language of

international communication

Contributing actively to ESDP missions (Democratic

Republic of Congo, Guinea-Bissau, Chad/Central African

Republic, Bosnia and Herzegovina, Kosovo, Georgia, the

Palestine Territories, and Moldova/Ukraine)

Enhancing multilateralism

Continuing and enforcing the trans-atlantic

partnership as an essential priority

Stronger relationships with Brazil, China and India

Supporting the development

Portuguese colonies

former

Enforce a breakthrough in a number of concrete

dossiers: the Iron Rhine, cross-border cooperation, etc.

For example, East Timor, Angola, etc.

Source: Portuguese Ministry of Foreign Affairs, current policy strategy

Compatibility with EU strategic objectives

Portugal has been fully committed in its participation in formulating the Common Foreign and

Security Policy (CFSP), with a view to strengthening its role in the construction of Europe. This

exercise is coordinated by the Directorate for Common Foreign and Security Policy Services (CFSP),

which has an across-the-board view of the activities of all the Ministry’s other departments, and

generally monitors national positions and actions in the many areas of foreign affairs, ensuring the

necessary coherence and convergence.

The Directorate is also responsible for coordinating and preparing Portugal’s participation in

meetings of the European Council, the General Affairs and External Relations Council (GAERC), and

the half-yearly “Gymnich” informal meetings of Foreign Ministers in the areas for which the

Directorate is competent.

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3.3. DISTRIBUTION OF PUBLIC EXPENDITURE BETWEEN MEMBER STATES AND EU

LEVEL

Over the period 2002-2008, EU budget expenditure increased by 37% compared to an increase of

25% percent of in public expenditure by the EU-25

. The growth in EU expenditure can be

explained by the significant increase in the EU research budget (FP7) and educational programmes

(particularly, lifelong learning). Most of the developments result not only from the overall changes

in Community's policy priorities, but also from the allocation of funds within each individual

Community Policy.

Public expenditure in Portugal (27%), the Netherlands (27%), France (26%), Italy (25%), Austria

(23%), United Kingdom (22%), Denmark (20%), Sweden (15%) and Germany (5%) – all older

Member States - grew more slowly than the EU budget expenditure (37%) over the same period.

Public expenditure grew by more than 100% in Romania (208%), Estonia (130%) and Lithuania

(130%). In Slovakia (93%), Ireland (75%), Czech Republic (71%), Poland (69%), Greece (63%) and

Spain (57%) public expenditure grew considerably

. The diverging trends in national budget in

part illustrate for the absence of budgetary coordination between Member States. This is also valid

when analyzing public expenditure by category of expenditure.

In 2007, EU budget expenditure represented 2% of all national government expenditure in the EU-

. The relatively low proportion of EU budget expenditure can be primarily explained by the

much wider scope of national budget expenditure. According to Bertoncini

, the proportion of EU

budget expenditure would increase significantly if public expenditure figures in Member States

were not taken into account salary costs or other operational expenses. In France, excluding any

operational or salary costs in the expenditure figures, the share of EU funds in total public

expenditure on R&D would have amounted to more than 10% in 2006.

The share of EU budget expenditure in total public expenditure – EU budget and national budget

expenditures – also differs by policy area and by Member State.

Considering the four policy areas that are part of the study scope, the proportion of EU budget

expenditure ranges from 0% in the area of defence to approximately 0.35% in the area of social

policy, 7.15% in R&D and 16.82% in development aid. R&D and development aid can be considered

as policy areas where public expenditure is primarily situated at Member State level, but with a

considerable amount of EU budget expenditure

. In areas such as education, social protection and

defence, public expenditure is almost exclusively situated at Member State budget level. While

education is an EU priority, EU funds for education represent 0.02% of national budgets dedicated

to education. The scope of this study does not cover any policy areas with a dominant proportion

of EU budget expenditure, such as agriculture - more than 70% of total public expenditure in

agriculture takes place at EU level.

Furthermore, the relative weight of EU budget expenditure can vary between Member States,

partly because of the redistribution mechanisms of the EU budget. The impact of EU budget

expenditure is more limited and less visible in developed Member States with higher level of public

spending, such as France and Belgium. In less developed Member States – such as Portugal and

Slovenia – the importance of EU funds in total public expenditure is much higher.

Eurostat, Total public expenditure (COFOG),2002-2008.

Eurostat, own calculations, Total COFOG public expenditure and total European Community expenditure;

source: EU Budget 2007 Financial Report.

Ibidem

Y. Bertoncini

Les interventions de l’UE au niveau national : quel impact?, Notre Europe, 2008

Ibidem

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Finally, it should be noted that EU budget expenditure can create strong leverage effects at

Member State level through the mechanisms of co-financing. The co-financing model requires a

substantial financial contribution - additional to EU financing - from the Member States’

governments and is often used in programmes jointly managed by the EU and public actors in the

Member States (for example, Structural Funds). However, none of the policy areas in scope involves

significant co-financing.

3.3.1. Research & Development

Comparing R&D expenditure under the EU budget to total public expenditure on R&D of the

Member States

, the distribution between Member States and the EU is, as follows (2008 data):

Table 25: Distribution of public expenditure between MS and the EU – R&D

TOTAL PUBLIC

EXPENDITURE R&D

% SHARE

PUBLIC EXPENDITURE

Member States (27)

Total

€ 6.728.144.476,00

€ 89.773.049.000,00

€ 96.501.193.476,00

6,97%

93,03%

100,00%

Source: Own calculations, based on available data for 2008.

3.3.2. Education & training

Comparing education expenditure under the EU budget to total public expenditure on education

and training of the Member States (cfr. Annex 2), the distribution of public expenditure between

Member States and the EU budget is estimated, as follows

Table 26: Distribution of public expenditure between MS and the EU – Education & training

TOTAL PUBLIC EXPENDITURE

EDUCATION

% SHARE PUBLIC

EXPENDITURE

Member States (27)**

Total

€ 4.913.804.900,66

€ 19.730.242.000.000,00

€ 19.735.155.804.900,70

0,02%

99,98%

100,00%

*Own calculations, appropriations 2009 (payments) – Cfr. Analysis of the EU budget above.

**Total public expenditure on education by the Member States (EU-27): 2006 (most recent data available)

Based on GBOARD classification (cfr. Annex 1) that gives information about the planned budgets and not the actual

spending on R&D

The percentages correspond: on the community side to total spending carried out in favour of R&D based on the

outturn data for 2008; on the side of Member States to the Government budget appropriations or outlays on R&D

(GBAORD). NB: the GBAORD represents budgetary forecasts and not actual spending. Bertoncini of Centre d’Analyse

Stratégique estimates the share of Community public expenditure in R&D at 6.3% and that of the Member States on

93.7%, considering on the community side the spending carried out in favour of the Research Framework Program; on

the side of Member States to the Government budget appropriations or outlays on R&D (GBAORD).

Eurostat and UNESCO statistics provide comparable national public expenditure data for education until 2006. As the

analysis of the EU Community budget only covers the period 2007-2009, no precise, comparable data are available.

However, an indication of the proportions has been made. The percentages correspond to on the community side the

spending carried out in favour of education for 2009 (cfr. Analysis of EU Community budget above); on the side of

Member States to the UNESCO-Eurostat statistics on education for the year 2006.

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3.3.3. Development and Humanitarian Aid

The total expenditure on development and humanitarian aid at EU and Member State level can

easily be calculated, as both the European Commission and the Member States report their public

expenditure to the OECD-Development Assistance Committee.

Table 27: Distribution of public expenditure between MS and EU - Development and Humanitarian

Aid, Official Development Assistance (2008), million dollars

TOTAL PUBLIC EXPENDITURE IN

DEVELOPMENT AND

HUMANITARIAN AID

EU**

Member States (DAC)*

Total

13.670,48

67.601,35

81.271,83

% SHARE

PUBLIC EXPENDITURE (2008)

16.82%

83.18%

100.00%

*OECD-DAC – EU DAC Official Development assistance (ODA) (excl. 6 EU Member States that are not member of OECD-DAC),

2008

**OECD-DAC – Official Development Assistance (ODA)

3.3.4. Social policy

Table 28: Distribution of public expenditure between MS and the EU - Social protection

TOTAL PUBLIC EXPENDITURE IN

SOCIAL PROTECTION

EU*

Member States (27)**

Total

€ 7.777.452.919

€ 2.218.825.000.000

€ 2.226.602.452.919

% SHARE

PUBLIC EXPENDITURE

0.35%

99.65%

100,00%

*Data from our calculations with regard to the EU public expenditure in social protection, Outturn 2007

**Data from Eurostat, COFOG classification – Total social protection, in absolute numbers, 2007

3.3.5. Foreign and Security policy

TOTAL PUBLIC EXPENDITURE IN

SECURITY POLICY

EU*

Member States (26)**

Total

€ 194.816.148

€ 201.462.000.000

€ 201.656.816.148

% SHARE

PUBLIC EXPENDITURE

0.10%

99.90%

100,00%

*Data from our calculations with regard to EU public expenditure in CFSP, Outturn 2008. Data solely includes expenditure

under budget line 19 03 ‘Common and Foreign Security Policy’.

** Data from European Defense Agency, Defense figures 2008

Excluding debt relief, the proportion of the Community would amount 18%. Bertoncini estimated the share of the

Community budget on 14.3% in 2005. As in this analysis, the percentages correspond to the expenditures of official

development aid as defined by the Development Assistance Committee DAC (development programmes,

humanitarian aid and debt reduction programmes).

Data of 2007 have been used, as COFOG expenditure data of the Member States are incomplete from 2007.

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3.4. CONCLUSIONS ON CONGRUENCE BETWEEN NATIONAL AND EU POLICIES AND

BUDGETS

Chapter 4 demonstrates that size of the EU budget expenditure – which accounts for

approximately 2% of total public expenditure in the EU- is limited compared to national public

expenditures. The share of EU expenditure in total public expenditure is particularly modest,

relative to national expenditure, in areas such as social policy (0.35%), education, and security

policy. The share of EU expenditure is much higher in areas such as development aid (16.82%) and

R&D (6.97%).

The budgetary analysis in chapter 4 demonstrates that both the EU budget and Member States’

budgets are only partly oriented towards the objectives and spending targets of the Lisbon

strategy. The Lisbon strategy put forward a 3% of GDP target for research spending in all Member

States and pays particular attention to lifelong learning and skills enhancement of employees.

However, in practice, there are clear discrepancies between aims and means, and few national

budgets explicitly refer to their contribution to achieving the objectives of the Lisbon strategy.

In general, it can be concluded that the

policy

priorities of Member States in the five policy areas

are congruent with those of the EU. Particularly, in the areas of development aid and security policy

high levels of congruence were found. All Member States committed to achieve UN Millennium

Targets and support the European Consensus on Development. In the case of education and social

policy, lifelong learning and enhancing the flexibility and employability of workers are increasingly

gaining importance, in line with the EU policies, in all four Member States. Furthermore, Member

States are increasingly aligning their R&D strategy and national funding schemes with the

objectives and functioning of the EU research programme (FP7). The analysis also reveals that

alignment of policy priorities is strong in policy areas – such as social policy and research - where

eligibility for EU funding is subject to co-financing requirements. This is particularly the case in

those less-developed Member States where the relative share of EU spending in total public

expenditure is higher than the average, and where the needs of public investment are greater than

in other Member States.

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ANALYSIS

OF THE BUDGETARY COORDINATION MECHANISMS

BETWEEN NATIONAL AND EU BUDGETS

This chapter includes an analysis of budgetary coordination between the EU budget and the

national budgets. The effectiveness and impact of coordination mechanisms are assessed. Findings

are primarily based on interviews with officials at EU and Member State level, as well as available

subject-related (academic) research and literature.

4.1. THE CONTEXT: RELATIVE SIZE OF THE EU BUDGET

The European Commission does not typically have the necessary budgetary (and fiscal)

instruments to achieve significant impact on its own – the size of the EU budget is too modest. This

limits its capacity to coordinate the policies of the different Member States. Compared to the

central budget of national states with a federal structure, the central EU budget is relatively

modest.

An interviewee stated:

“Of course the volume plays a role in the lack of interest in EU expenditure. The EU cannot have any

significant effect on national priorities and decision making.”

The same message was also echoed by another interviewee:

“No formal budgetary mechanisms are in place as far as I know. The size of the EU budget in old

Member States and what can come from it is not sufficient to influence the political discussion.”

While the size of the EU budget is limited, the main ongoing debate on the reform of the EU

budget shows that the current budget does not reflect the socio-economic ambitions of the EU.

According to Alain Lamassoure, Member of the European Parliament and President of the

Parliamentary Committee on Budgets

“L’Europe connaît une crise budgétaire majeure liée à l’incapacité de financer les dépenses décidées par

l’Union européenne. L’Union est un géant juridique, mais elle est un nain budgétaire. L’influence de

l’Union européenne dans le droit national est considérable. Entre 60 et 70 % des lois et règlements

français sont soit des transpositions, soit sous influence du droit communautaire. En revanche, le poids

budgétaire de l’Union est très faible. »

The incapacity of the EU budget to finance its own policies is exemplified by the relatively low

expenditure levels in key areas such as R&D, education and social policy.

4.2. SUPPORT FOR ENHANCED BUDGETARY COORDINATION

Article 99 of the EC Treaty stipulates that "Member States shall regard their economic policies as a

matter of common concern and shall coordinate them within the Council" while article 98 specifies

that they should be conducted "with a view to contributing to the achievement of the objectives

of the Community". Subsequent articles set the areas and forms of coordination, including the so-

called Broad Economic Policy Guidelines (BEPG).

French Senate, Budget communautaire Audition de M. Alain Lamassoure, Président de la commission des budgets du

Parlement européen, 11/02/2009, http://www.senat.fr/europe/r01102009.pdf

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In the intense political and academic debate about the reform of the EU budget, many observers

refer to the need for a better integration between national and EU budgets, concerning spending

priorities, quantitative expenditure targets and operational budgetary practices and procedures.

Interviewees also consider EU expenditure as a mechanism for overcoming intra-EU barriers. EU

efforts – whether through own expenditure or by promoting coordination between Member

States - can be highly effective in reducing disconnections between national systems, benefiting

from scale effects by pooling fragmented resources, and generally complementing national

expenditure.

The current economic and financial crises and scarcity of financial resources highlight the need for

better coordination between European policy objectives (e.g. Lisbon and EU 2020 Strategy,

European Consensus on Development, etc.), on the one hand, but also between European and

national policy objectives in areas such as R&D, education, social policy, and development aid.

Such coordination could lead to greater synergy between European and national level

expenditure, while respecting and strengthening subsidiarity, additionality, European value added

and the advantages of economies of scale.

According to Alain Lamassoure, president of the Committee on Budgets of the European

Parliament:

“Il serait cependant très utile que le budget européen trouve sa place dans la coordination des politiques

nationales afin que l’effort collectif des États et de l’Union ne soit pas en contradiction. En temps

normal, une politique budgétaire sert à soutenir l’activité économique dans le respect des critères du

pacte de stabilité et de croissance. Mais les économistes ne font pas l’effort d’additionner les montants

que chaque État verse à cette fin. (….) La politique européenne est globalement et majoritairement

financée par les États membres, mais on ne sait pas quel est le niveau véritable car on ne fait pas l’effort

de mutualiser les dépenses nationales. »

4.3. OVERALL LACK OF FORMAL BUDGETARY COORDINATION MECHANISMS

According to Albert-Roulhac, national governments cannot ignore EU public spending policy.

National budgetary choices increasingly take into account the EU budget to complement, reinforce

or correct its effects. In France for example, the connection between national and EU expenditure

programmes was emphasised in 1994, when the French Prime Minister Edouard Balladur sent a

letter of guidance to the ministries, urging them to:

“Take into account the development of Community interventions in the areas which come under

the competency of your departments, for the determination of your budgetary bids. The rationale

of building Europe must permit, whenever possible, to re-direct national actions when these are

undertaken under Community actions.

”

Apart from the case of Structural Funds spending where the general model is for member States to

co-finance EU-funded interventions with their own financial resources, the study has not identified

any other formal budgetary coordination mechanisms between the EU and its Member States, nor

between Member States in any of the policy areas that are part of the scope of this study. None of

our interviewees at EU and Member State level was aware of any existing formal budgetary

coordination mechanism, apart from the Stability and Growth Pact.

Ibidem

C. Albert-Roulhac, The Influence of EU Membership on Methods and Processes of Budgeting in Britain and France,

1970–1995, Blackwell Publishing, Volume 11, Number 2, April 1998 , pp. 209-230.

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While the EU and its Member States have embraced the idea of general policy and budgetary

coordination, as can be seen from, inter alia, the BEPG, the Stability and Growth Pact and co-

financing requirements, and although many interviewees strongly supported the principle of

budget coordination, they acknowledged that it is rarely put into practice. One attributed this as

partly due to the gap between broad EU-level strategy and national focus.

“If you manage to coordinate better you get more. The problem is that there is always a distance with

national priorities because the European priorities are not sufficiently concrete.”

Furthermore, the interviews revealed the extent of procedural differences between the EU

budgetary system and that of the Member States. The EU and national-level budget approaches

have remained separate, and no interaction with the EU level could be identified during the

drafting phase of the national budgets in any of the Member States could any. Interviewees often

referred to the differences in budget procedures:

“The new French system with a five year macroeconomic law and the yearly budget has not come closer

to the EU system, because the budget remains inspired by a yearly logic subject to the political agenda

The ‘plafond de dépenses’ did not really change the logic behind the budget and did not get it closer to

the EU political priorities. Even in the new budgetary system, the logic is always the one of returns.”

And:

“Today, coordination between the EU and MS is not working well at budgetary level. When planning the

budget, the Ministry of Budget in France does not always take into account what is happening at the EU

level. National budgets are still very much oriented by a year by year logic, while the budgets of the EU

work on the basis of a seven year agreement.

The strict budgetary framework at EU level may also be regarded as a factor making budgetary

coordination less straightforward. Unlike the national budgets, the EU budget is based on a strict

budgetary equilibrium, which means that no debts or budgetary deficits are allowed. Moreover,

the EU annual budget enjoys limited flexibility, as it is constrained by the multiannual EU financial

perspective

Interviewees also referred to another issue that limits Member States’ scope to benefit from

economies of scale and European value added (advantages which would flow from enhanced

budgetary coordination). Member States are focusing increasingly on the concept of a fair return

(‘juste retour’) of EU budgetary resources:

“We try to assess on an annual basis how much we benefit from the EU. The latter part is the trickiest,

owing to the fragmentation of European money channeled back into France.”

According to another interviewee:

“The logic of complementarity between budgets has still a long way to go; the driving logic is the “return

rate” rather than the added value of the EU action. The reasoning of Member States is that of “how

This quote does not strictly reflect the facts, as both EU and French systems feature both annual and multiannual

expenditure.

In terms of revenues, the EU budget is in theory financed by the EU’s own financial resources. Revenue is raised from

four sources: two traditional own resources (agricultural levies and customs duties); a resource based on a harmonised

national pre-emption on the proceeds of value added tax (VAT) levied in Member States; and a transfer based on the

level of the GNI of Member States. However, over the years, the GNI-based transfer - financial contributions from the

national budgets - has become the principal revenue stream for the EU, progressively eclipsing the VAT resource, and

the agricultural levies and customs duties. This evolution has made the EU budget more dependent on transfers from

governments, rather than on revenue instruments linked to the EU level of governance.

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much do we get back from Brussels”? This brings sub-optimal results where there is a good financial

return in sectors where coordination is lax, and vice versa.”

And:

“This is a very good period for undertaking this kind of study. Indeed all the net contributors to the EU

budget are under pressure due to their need to reduce their deficits. In this light the contribution

becomes a burden and national governments are tempted to influence EU policy more than ever to get

money back from the EU (or to reduce its budget)”.

A disproportionate focus on ‘juste retour’ risks obscuring spending priorities that are established

through rational economic considerations.

However, the limited extent of explicit budgetary coordination mechanisms does not necessarily

imply that budgetary coordination is not taking place at all. Some interviewees realise that the EU

budget and their national budgets are interconnected because of the numerous implicit and

indirect interactions and coordination between both levels. Most interviewees acknowledge that

budgeting is evolving from a purely national issue to an ‘EU-national’ approach to public

budgeting, which takes EU strategy and practice into account. The following paragraphs provide

more explanation on this evolution.

4.4. INDIRECT BUDGET COORDINATION: A MULTI-LAYER APPROACH TO EUROPEAN

PUBLIC FINANCE

The boundaries between national and EU budgets are not formally established. They are blurred,

implicit and are moving continuously under the influence of EU decision-making,

recommendations from EU institutions and benchmarking mechanisms. Moreover, decision-

making at EU level involves the participation and agreement of national actors in the Council and

other EU institutions. Member States’ representatives contribute to and co-determine EU decisions.

The figure below illustrates these different ways of impacting the national budgets of Member

States (and vice versa)

Figure 2: A multi-layer approach to European public finance

Source: I. BEGG, Lisbon in the EU budget, 2009

BEGG, I., Lisbon in the EU Budget, European Institute London School of Economics, 2009

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Buti and Nava present the EU budget as centralised (at EU level) fiscal policy that is subject to

decentralised national constraints, as the Member States contribute a part of their income to the

EU budget. Conversely, national budgets can be seen as a decentralised system of fiscal policy

subject to centralised EU constraints, such as the Stability and Growth Pact and, to some extent, the

Broad Economic Policy Guidelines

4.4.1. Hard law: directives and regulations

Directives and regulations do not typically directly impact the EU budget, but aim to achieve EU

objectives, for example by obliging or encouraging Member States to mobilise their own financial

resources to meet objectives agreed at the EU level.

EU legislation, which is decided by unanimity or majority voting by Member States and the

European Parliament, can commit Member States to spending. When the law is being adopted, the

scale of required spending is often not precisely defined. For EU directives, the Member States have

the freedom to decide on the method of implementing them, and on the way to finance

implementing actions.

The most obvious and visible example of hard law with a clear impact on national budget strategy

is the Stability and Growth pact, building on the Maastricht criteria applicable to the adoption of

the euro. The Maastricht Treaty states that “Member States shall ensure that national procedures in

the budgetary area enable them to meet their obligations in this area deriving from this Treaty”.

Interviewees refer to the Stability and Growth pact as the main instrument of budgetary

coordination.

4.4.2. Coordination

Policy coordination (as opposed to formal “hard law”) can also bring about enhanced policy and

budget coordination between the EU and national budgets. The most visible mechanism in this

respect is the Open Method of Coordination (OMC).

The Open Method of Coordination (OMC) in the Lisbon process

A guiding principle in the Lisbon process has been the pressure to reach objectives by policy

coordination. The open method of coordination aims to promote good practice in effective social

and economic policies, and to stimulate convergence among the policies of the Member States.

The OMC does not envisage the adoption of directly binding law, but foresees that Member States

present both their strategies and results for discussion and review at EU level.

The costs of achieving important European objectives through OMC are not generally carried at EU

level. Financing for activities subject to the OMC tends to be provided entirely by the Member

States.

However, interviewees point out that coordination is entirely dependent on the willingness and

goodwill of Member States to cooperate. The OMC does not incorporate any real sanction

mechanisms, in the event that the agreed level of implementing the objectives is not achieved.

Neither is there any real financial support available for member States who find it difficult to

BUTI, M. & M.NAVA, Towards a European Budgetary system, Robert Schuman Centre for Advanced Studies, RSC No.

2003/08, http://ideas.repec.org/p/erp/euirsc/p0077.html

Constraints for national budgeting imposed by the Maastricht Treaty are: 1) Prohibition of overdraft facilities and other

credit facilities in favour of government authorities, 2) Prohibition of privileged access by government authorities to

financial institutions, 3) Prohibition of bail-out; 4) Avoidance of excessive government deficits – meaning planned or

actual government deficits, exceeding 3% of GDP at market prices and government debt exceeding 60% of GDP.

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achieve progress. Many interviewees say that the OMC has not succeeded in fulfilling its initial

expectations because of the lack of sanction and enforcement mechanisms. The OMC is generally

perceived as a method that is ‘too soft’ to stimulate convergence either of Member States’ policies

or of budget coordination between the EU and the Member States.

An interviewee stated:

“The OMC should be revised as it was not strong enough to enforce or persuade towards the

achievement of a common objective”.

Available literature on the evaluation of the method and the assessment of its effectiveness is

generally sceptical.

However, some interviews refer to the convergence effect obtained by the introduction of

benchmarking practices, for example in the field of education. Governments are sensitive to

‘naming and shaming’ that can result from these benchmarks.

The Broad Economic Policy Guidelines (BEPG)

The BEPG are the central element in coordination of the Member States' economic policies. They

represent multilateral surveillance of economic trends in the Member States, and their legal base is

Article 99 of the Treaty establishing the European Community. The Recommendation on the BEPG

establishes the framework for coordinating the policies of the Member States.

Compliance with guidelines 1 to 5 (Macroeconomic policies for growth and jobs) contributes

towards:



Securing economic stability for sustainable growth (compliance with Stability and

Growth Pact);



Strengthening sustainable economic and fiscal viability (debt reduction and improving

the efficiency of Member States’ pension, social protection and health care systems);



Improving the effectiveness of public finances (aligning public expenditure to the Lisbon

growth objectives);



Ensuring that wage developments support economic growth and stability; and



Coordinating macroeconomic, structural and employment policies.

Guideline 6 recommends that States in the euro area coordinate their economic and fiscal policies

better in order to contribute to a dynamic and well-functioning euro area. In particular they should

pay attention to fiscal sustainability in compliance with the Stability and Growth pact. The euro

area should also increase its influence and competitiveness at the international level.

In accordance with the Lisbon Strategy, guidelines 7 to 11 highlight the importance of knowledge

and innovation as factors for competitiveness, growth and sustainable development. Measures

taken by Member States should:



Increase investment in research and development, particularly by businesses (with a

general aim of 3% of Europe’s GDP, public-private partnerships, centres of excellence of

educational institutions and transfer of technologies between public research institutes

and businesses);



Facilitate innovation in all its forms;



Accelerate the dissemination and widespread use of information communication

technologies (ICTs);



Strengthen the European industrial base; and



Use resources in a sustainable way.

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Guidelines 12 to 16 make recommendations to:



Extend and deepen the internal market;



Ensure open and competitive markets;



Improve European and national regulations;



Encourage an entrepreneurial culture and create a supportive environment for SMEs; and



Expand, connect and modernise European infrastructures.

According to most interviewees – at EU level and in the Member States - the BEPG have

not

fulfilled

their objectives and have not proven to be effective. According to a French interviewee:

“…. the BEPG have proven to be not effective. They are not deemed to be strong enough to guarantee

compliance or coordination. The BEPG … are not considered in the budgetary process.”

Most interviewees in the Member States are in strong favour of a more stringent method of

coordination for the future. They welcome the new proposal for more harmonisation in the EU

2020 perspective.

Enhancing and strengthening political and budgetary coordination was President Barroso’s key

message of to the European Council during the informal meeting of 11 February 2010

“Stronger economic policy co-ordination is more essential than ever (…). Working together in a

coordinated manner and gearing EU level policies and expenditures towards these objectives is

essential. In our interconnected economies, growth and employment will only return if all Member

States move (…). Coordination works and Europe adds value (...). Economic policy co-ordination can

deliver significant results if it is strengthened and rendered effective.”

4.5. ANALYSIS OF THE LEVERAGE EFFECT OF EU CO-FINANCING REQUIREMENTS ON

THE MOBILISATION OF NATIONAL PUBLIC RESOURCES

For a number of areas of EU expenditure, a model of co-financing of EU funds is applied. There is

obviously a close connection between expenditures from the national and from the EU budget.

The intention of the principle of obligatory co-financing is:



to generate better results from the limited EU funds by means of engaging additional

national resources of the Member States; and



to increase the sense of responsibility of Member States for EU-funded policies.

Interviewees state that the requirement to co-finance EU funds leads to reorientation of national

expenditures and a de facto reorientation of policy priorities of the Member States. This is

particularly the case in Member States where national funds are limited and the need for EU public

investments is greater than in other Member States. It does not necessarily imply, however, that

Member States continue to show synergy with EU policy and budget strategy in implementing

their own, purely national, spending programmes in the same policy areas.

In the strict sense, the term ‘leverage effect’ could be defined in a technical way, meaning the

propensity to induce investment by public spending. However, it is more relevant to choose a

broader definition, as the European Social Fund and the European Regional Development Fund are

the only EU funds within scope of this study that requires obligatory funding by Member States.

The broad definition also takes account of any convergence effects of policies (policy coordination)

European Commission, EUROPE 2020 A strategy for sustainable growth and jobs Contribution from the President of the

European Commission to the informal meeting of Heads of State and Government of 11 February 2010,

http://ec.europa.eu/commission_2010-2014/president/news/statements/pdf/20100210_en.pdf

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and the governance aspect of policies. Different types of leverage effects in this context can be

distinguished



Pooling of financial resources,

which could include both pooling of public (EU, national,

regional, local, etc.) and private (from research institutes, companies, etc.) resources;

Strategic policy coordination,

which goes beyond financial leverage and relates to

influence on policy design (introduction of general principles, such as multi-year planning

approach, gender aspects, social inclusion, etc.) and on the shaping of policy fields (new

features introduced in policies fostered by EU funds, policy fields being addressed that

were not previously considered at the national and regional level, etc.);

Institutional capacity building

(e.g. widespread use of multi-year annual programming,

evaluation and monitoring techniques, financial control, etc.) The enhancement of

governance and administrative capacity is generally considered as a key means of

increasing the effectiveness and benefit of EU funds. Co-financing requirements can lead to

the increased use of these practices.



However, given the focus of the study – in this context the financial leverage of co-financing - the

report does not go into further detail with regard to this point.

It is important to note that co-financing requirements differ by Member State, by fund and even by

type of activity, a feature which leads to multiple leverage effects. Furthermore, recent research on

budgetary coordination between the EU and the Member States revealed that it is difficult to

identify the share of national budgets devoted to fulfil the co-financing requirements of EU

funding, thereby preventing the isolation of the leverage effect

. The issue is further complicated

by the differences in budgetary procedures between the EU and Member State level.

4.5.1. Social policy

Expenditure by the EU budget on social policy is mostly part of the broader framework of cohesion

policy which includes the ERDF, ESF and the Cohesion Fund. The European Regional Development

Fund (ERDF), Cohesion Fund and the European Social Fund (ESF) all require some level of co-

financing from the Member States’ budgets. For example, in the context of ESF, Member States

have to cover a part of the costs of projects, which can vary between 15% and 50%.

Regional and cohesion policy became a particular priority for the EU, after the enlargement of the

1970s and 1980s. It was assumed that the importance of cohesion policy would increase again,

after 12 ‘new’ Member States – all of them with below EU-average levels of economic development

- were granted accession to the European Union in 2004-2007. However, this has not entirely been

the case. The interviews revealed some increasing reluctance across Member States to continue the

current way of implementing EU cohesion policy, due to scepticism with regard to the results

achieved and the fear of growing costs for the EU budget in some Member States – most of them,

net contributors. As an interviewee stated:

“The logic in Member States is still very much oriented towards contribution and revenues from the EU

budget, instead of towards synergies. Furthermore, I wonder whether there is any relevance in the

The Leverage Effects of European Cohesion Policy under the Structural Funds, Committee of the Regions, January 2007

European Parliament’ services, Directorate General Internal Policies of the Union, Policy Department on Budgetary

Affairs, Elements for a comparison between EU and national budgets' breakdown from 2002 to 2005, 17/03/2009;

Collignon

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“additional” expenditure allocated to ESF, ERDF, etc. If there was no European money, would the project

have been financed anyway? I am not sure. Against this we try to limit the crowding-out effect that can

be generated by pouring EU money into regions. If the market is already doing something well and

European money comes in and alters this picture, is it really worth it? This is the case for transport but

also with energy. This should be avoided. I am therefore rather sceptical on additionality and leverage

effect, at least concerning Structural funds.”

On the other hand, cohesion policy is often reduced exclusively to thinking along the lines of

bridging the gap in the levels of development. However, cohesion policy also contributes to other

effects, including benefits for the neighbouring countries or even the entire EU (construction of

Trans-European transport corridors, etc.), and equipping poorer regions with infrastructure with an

impact on the quality of life and only indirectly on economic growth. It also serves to build an

appropriate regulatory and institutional environment in regions lagging behind in development.

In 2009, the Commission proposed to scrap temporarily the requirement that national

governments provide a proportion of the finance for EU-backed regional aid projects. Driven by

the context of economic crisis, the Commission referred to the fact that some new Member States

were encountering difficulties in making use of regional funding, both because of administrative

obligations and the co-financing requirements that these Member States have to meet. However,

the Commission’s idea to temporarily suspend co-financing requirements faced strong resistance

from net EU budget contributors, like Germany, Denmark and the Netherlands. Finally, the Council

and the European Parliament decided to maintain co-financing requirements but not to de-

commit unspent 2007 appropriations, as should have normally been the case at the end of 2009.

The Commission’s proposal demonstrates clearly that the co-financing requirements of EU

cohesion policy weigh significantly on the national budgets of a number of Member States,

particularly in times of crisis. In objective 1 (‘convergence’) regions – namely the less developed

regions – Community interventions trigger a significant part of national public expenditure

through the obligation to provide co-financing. According to the Slovenian interviewee, the

leverage effects of EU spending on both private investment and national public spending in

Slovenia are significant. For the regions outside Objective 1, cohesion policy is much smaller in

scale and proportion. The ESF programmes in these regions are much more concentrated on a

limited number of themes, and the effects of co-financing requirements are much less visible or

clear. In these Member States, leverage effects of cohesion policy funds – in terms of financial

multiplication effects - are rarely systematically observed and examined, nor are they explicitly

attributed to Structural Funds.

4.5.2. Research & Development

The EU research programme (FP7) is based on co-financing by project participants. The

Commission contributes a certain percentage to the overall costs of research projects. A key

difference with the Structural Funds is that FP7 co-financing requirements do not apply to the

Member States but to individual project participants, whether public or private. There is thus no

direct formal relationship between EU and national government spending.

During the negotiations on the current financial perspective, a discussion took place concerning

the principles that should guide the spending of EU research funds. Some Member States put

strong emphasis on the criterion of “excellence” as this would offer the best results. The excellence

principle would guarantee a higher return from the EU budget invested in research and

development activities. However, in new Member States, there is a certain feeling that the

emphasis on ‘excellence’ merely disguises the ‘juste

retour’

argument, as prestigious research

institutions or networks with a proven record of ‘excellence’ are still primarily situated in the older

Member States, while the universities and research institutes in the new Member States are still less

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Policy Department D: Budgetary Affairs

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known in the European research community. As a result, new Member States like Slovenia depend

more on Structural Funds to finance their R&D activities.

As mentioned before, co-financing requirements lead to more convergence and coordination

between policies and expenditure. The fact that Member States do

not

have to comply with co-

financing requirements in FP7 could reduce synergy and convergence between research policies -

and their implementation – at EU and Member State level. Funding schemes for R&D activities in

the Member States are often not aligned with the FP7 way of funding. In Belgium (Flanders), for

example, the funding scheme is based on a bottom-up approach, which means that researchers

can submit requests for public funding without any constraints with regard to the research area -

while FP7 funding is mainly shaped top-down, meaning that the Commission grants funding based

on number of predefined research priorities. Another example is France, where the bulk of R&D

expenditure is still allocated without competition between researchers.

Member States that have not aligned their national financing schemes to the EU method – such as

France and Belgium – have the feeling that they are not exploiting fully the potential of FP7. France

is fourth in terms of number of applications, but it receives only half of the R&D funding of what

Germany is granted

. The French “success rate” is however higher than the EU average (28% of

applications approved vs. 22% average) but the average size of the project is smaller than the EU

average. It shows that, despite the growing share of EU funds in certain French-led R&D areas,

French researchers are not fully at ease with this way of financing and continue to rely more on

national funds, even at a time when these are shrinking and EU funds are growing.

However, Member States are increasingly realising that national and EU funding schemes should

be aligned, to improve coordination. With regard to this point, we refer to The Lund Declaration,

drafted under the Swedish EU presidency in July 2009, stated

“European research must focus on the Grand Challenges of our time moving beyond current rigid

thematic approaches. This calls for a new deal among European institutions and Member States, in

which European and national instruments are well aligned and cooperation builds on transparency and

trust.”

Evidence exists of enhanced alignment between the national and EU budgets, partly due to a

significant increase in the financial resources of FP7 and the growing share of EU expenditure in

total R&D expenditure. As a response, a growing number of Member States are aligning their

national funding schemes with the FP7 funding approach. The Netherlands and United Kingdom,

both net contributors to the EU budget, are putting more efforts into encouraging their businesses

and research universities to apply for EU funding, rather than relying on domestic financial

resources. Their research policy is strongly oriented towards assisting private and public actors to

access EU funding, rather than expanding their own government support system for R&D actors.

Other Member States are also increasingly promoting FP7 as a key funding instrument for private

and public R&D. As a Member State official stated:

“Now that the FP7 financial envelope has been substantially increased and that the Member States are

reducing or at least not increasing the amount of budget they devote to R&D, the EU programme is

much more taken into consideration. All Member States are increasingly trying to orient EU R&D

planning and priorities towards the sectors where they are stronger. For instance, for France, this is the

case in life sciences, space research and nuclear physics.”

Interview with a French government official

The Lund Declaration, Europe most focus on the grand challenges of our time, July 2009,

http://www.se2009.eu/polopoly_fs/1.8460!menu/standard/file/lund_declaration_final_version_9_july.pdf

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However, despite the growing alignment between R&D funding policy at both levels, some

interviewees doubt if this shift in approach will result in a stronger leverage effect, as Member

States may come to rely more on EU R&D funds and invest less in R&D at Member State level,

resulting in substitution instead of additionality.

“The coordination of objectives is not really existent, but when EU funds become necessary because of

pressure on the national budget, then the law of interconnected vessels applies and the Member States

will try to get the European money in the first place”.

One of the basic weaknesses in this area is the relatively low level of private R&D expenditure. The

expenditure objectives for R&D set for the EU by the Lisbon Agenda and EU 2020 (at least 3% of

GDP) remain unachieved in most Member States for both public and private sector. One of the key

factors constraining R&D is the insufficient availability of financing on acceptable terms for

investments involving complex products and technologies, unproven markets and intangible

assets. To overcome these difficulties and achieve a stronger leverage effect, the Commission and

the European Investment Bank have joined forces to set up the Risk Sharing Finance Facility, an

instrument to improve access to debt financing for private companies and public institutions

promoting R&D activities. Through this facility, extra lending by the EIB could amount to three or

four times of the allocated EU funds. This could lead to a significantly higher leverage of public

investment in R&D.

When analysing EU Member States like Sweden and Finland who have met the objective of 3% of

GDP, high levels of government support for innovation in these countries, as well as the clear

political willingness to place innovation at the heart of policies, are often mentioned. The efforts by

the governments underline the strong leverage effect of public expenditure in the field of R&D.

Furthermore, the way public support systems are organised is considered to play an important role

in the success stories of Sweden and Finland. Both countries have chosen a sectoral orientation for

their innovation policy, and research policy advisors and the scientific world cooperate closely with

businesses.

From interviews in the Member States, evidence emerges of a stronger leverage effect of EU co-

financing on businesses than on research institutes or universities. If the EU would stop funding

R&D activities in the Member States under FP7, interviewees state that it would be primarily

companies that would decide to cut their R&D expenditure, as the risks of failure for this group of

actors are perceived as higher than for (publicly-funded) universities or research institutes.

4.5.3. Education

It is difficult to make a solid assessment of the leverage effect of EU funds, and their co-financing

requirements (if any), in the field of education. The European Commission manages a wide range of

funds which target different target audiences, with their own financing regulations. Unlike

Structural Funds, Member States are not obliged to provide co-financing for the EU funds under

the Lifelong Learning Programme. Additional funding is totally dependent on the willingness of

the governments

. Therefore, according to our interviewees, the leverage effect on the

mobilisation of national resources is minimal. Furthermore, the relative share of EU funding in total

education spending is very limited.

In Belgium, the Flemish government provides additional funding in the context of the Erasmus

programme, as mobility of students and the adjustment to the internationalisation of education are

priorities of the current educational policy in the region. No other evidence of additional funding practices

has been found in the other Member States included in the study.

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In terms of the leverage effect of EU funds on policy coordination, the mobility of students and

teachers is gaining importance in all selected Member States. All four Member States are orienting

their education systems towards the Europeanisation of education.

4.5.4. Development Aid

In the area of development aid, Member States give part of their national development aid to the

EU level, which is further managed by the European Commission, however, there is no co-financing

model involving the national budgets of the Member States. The possible level of budgetary

coordination among Member States in the field of development aid is considerable, as all EU

Member States have committed to achieve the 0.7% (of GDP) expenditure target, set by the UN.

However, the effectiveness of budgetary coordination is hindered by the fact that there are no

sanction mechanisms in place for “underachievers”. All Member States have aligned their policies

to the objectives of the European Consensus on Development, as well as to the Millennium

Development Goals. Overall, there seems to be general support among decision-makers in the

Member States for a more active role of the EU in coordinating development policies.

4.5.5. Foreign and Security Policy

The Common Foreign and Security Policy of the EU does not rely on a compulsory co-financing

model. There is limited evidence of budgetary coordination between the EU and national budgets.

Foreign and security policy is still highly regarded as a policy area with a strong national dimension,

despite the growing alignment of policy priorities at EU level.

However, it has long been acknowledged by academic studies that the financing of public goods

with an inherently international dimension, such as defence, external and internal security and

protection of frontiers would be much more effective if it were managed at EU level than by the

Member States separately. Furthermore, as a French interviewee states:

“With the CFSP we have seen how Member States are collaborating to give more money to this pillar

and get more engaged in Afghanistan and Iraq. This is not yet an EU wide engagement, but it shows

that the Member States are sometimes willing to expand the budget of the EU, or is it because

Afghanistan and Iraq are extremely unpopular subjects at home?

”

An interesting coordination example within this area is ATHENA, a mechanism established by the Council whose

objective is to finance the common costs of military operations based on contributions by Member States. As opposed

to civilian operations, military and defensive operations cannot be financed from the EU budget. Common costs are

narrowly defined in the ATHENA mechanism. The majority of costs of military operations (about 90 percent) are

covered according to the ‘costs lie where they fall’ principle by the Member States which engage in the missions

themselves. As a consequence of the principle, the burden primarily falls on the Member States who are most engaged

in the conduct of operations. This may constitute a disincentive to engage in peace missions carried out as part of the

ESDP by the EU as a whole.

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Creating greater synergy between European and national budgets

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4.6. CONCLUSIONS ON AVAILABLE COORDINATION MECHANISMS BETWEEN EU AND

NATIONAL BUDGETS

Apart from the formal co-financing requirement attached to Structural Funds spending,

coordination of Member State budgets with the EU budget tends to take place in an indirect or

implicit way. The EU and national budgets are mutually affected by EU hard law, and by multiple

formal and informal policy coordination mechanisms.

The Open Method of Coordination and BEPG are regarded as instruments that are “too soft” to

have a real coordination and convergence effect, as they lack sanction mechanisms.

Moreover, the differences between the budgetary procedures in the Member States and those at

EU level are generally regarded as contributing to the current lack of coordination.

Co-financing of EU funds leads to reorientation of national expenditures and a greater or lesser

reorientation of policy priorities of the Member States. This is particularly the case in Member

States where EU funding represents a relatively high share of total spending in the specific areas.

Despite the fact that Member States are not obliged to provide additional financing to FP7

spending, there is evidence of increasing alignment between the national budgets and the EU

budget, since the financial resources of FP7 have increased substantially, making it relatively more

important as a part of total funding for research. A growing number of Member States are aligning

their own R&D government support system to the EU funding scheme’s approach.

The education area is one where EU spending represents a very small part of total expenditure and

is too insignificant to warrant formal coordination. Some interviews refer to the convergence effect

obtained by the introduction of benchmarking practices in the field of education. Governments are

sensitive to ‘naming and shaming’ that can result from these benchmarks.

In the area of development aid, Member States give part of their national development aid to the

EU level, which is further managed by the European Commission, however, there is no co-financing

model involving the national budgets of the Member States. All EU Member States have

committed to achieve the 0.7% (of GDP) expenditure target, set by the UN. All Member States have

aligned their policies to the objectives of the European Consensus on development, as well as to

the Millennium Development Goals. Overall, there seems to be large support among decision-

makers in the Member States for a more active role of the EU in coordination policies in the field of

development.

In the field of foreign and security policy, there is limited evidence of budgetary coordination

between the EU budget and the national budgets. Foreign and security policy is still highly

regarded as a policy area with a strong national dimension, despite the growing alignment of

policy priorities at EU level.

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CONCLUSIONS AND RECOMMENDATIONS

5.1. CONCLUSIONS

This study focused on the budgetary interventions at EU and national levels in five policy areas –

education, research, social policy, development aid and foreign/security policy - and on the

mechanisms and processes aiming at ensuring budget coordination between the national budgets

and the EU budget. The research team conducted an analysis of the guiding budgetary and policy

objectives at European and national levels for these five areas, as well as the extent to which they

are compatible, complementary or similar, based on research in four Member States - Belgium,

France, Slovenia and Portugal. Based on literature review and a series of face-to-face interviews

with officials at EU and Member State level, current mechanisms and procedures aiming at

coordinating EU and national expenditure were analysed and evaluated, as were the reasons for a

lack of synergy between the European and national levels.

The analysis of public expenditure data demonstrated that the size of the EU budget – which

accounts for approximately 2% of total public expenditure in the EU - is particularly modest,

relative to national expenditure, in areas such as social policy, education, and foreign/security

policy. It is higher in areas such as development aid and R&D.

The budgetary analysis demonstrated that both the EU budget and Member States’ budgets are

only partly oriented towards the objectives and spending targets put forward in the Lisbon

strategy. Whereas Lisbon sets a target for research spending of 3% of GDP for all Member States

and emphasises the importance of lifelong learning and skills enhancement of employees, the

analysis of the EU and national budgets reveal discrepancies between such commitments and the

financial resources deployed. A modest part of the EU budget is spent on activities that contribute

to the realisation of the Lisbon strategy, while national budgets seldom refer to achieving the

objectives of the strategy.

In general, the priorities of the four Member States in the five policy areas are congruent with those

of the EU. This is most clearly the case in the areas of development aid and foreign/security policy.

In the case of education and social policy, lifelong learning and enhancing the flexibility and

employability of workers are gaining importance, in line with the EU policies, in all four Member

States. Furthermore, with regard to R&D, Member States are increasingly aligning their R&D

strategy and national funding methods with the objectives and functioning of the EU research

programme. The analysis also reveals that alignment of policy priorities is strong in policy areas –

such as cohesion policy where eligibility for EU funding is subject to co-financing requirements.

This is particularly the case in Member States where the relative share of EU expenditure is higher

and where the need for public investment is greater than in other Member States.

Interviewees recognise that given the current economic and financial crises and scarce financial

resources, there is a strong need for better coordination between European and national policy

objectives. Such coordination could lead to greater synergy between the European and national

level expenditure, respecting and strengthening subsidiarity, additionality, European value added

and the advantages of economies of scale.

While few examples of formal budgetary coordination mechanisms could be identified, this does

not mean that there is no coordination at all. National governments cannot ignore EU public

spending policy. National budgetary choices increasingly take into account the EU budget to

complement, reinforce or correct its effects. The EU and the Member States are coordinating their

policies through a wide range of often implicit coordination mechanisms: networks and meetings,

benchmarking practices and peer reviews, the broad economic policy guidelines and the Open

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Creating greater synergy between European and national budgets

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Method of Coordination, etc. Moreover, the EU budget and national budgets are also mutually

affected by EU hard law.

Although interviewees recognised the relevance of coordination mechanisms for creating budget

synergies, they acknowledge that they are rarely put into practice. The BEPG, and the Open

Method of Coordination more generally, are regarded as instruments with limited coordination

and convergence effects, as they lack sanction mechanisms.

Discrepancies and disconnections between the budgetary procedures in the Member States and

those at EU level are put forward as a reason for the current lack of budget synergy. Basic issues

such as length and timing of budget cycles and the absence of an agreed Europe-wide standard

budget structure, complicate the search for synergy.

Co-financing requirements, related to some types of EU funding lead to some extent to

reorientation of national expenditures and a de facto reorientation of policy priorities of the

Member States. This is particularly the case in Member States who depend more on EU budgetary

transfers than others. In the area of social policy, co-financing requirements of the ESF and ERDF

are considered to result in an increased alignment of policy priorities between both levels and

affect national budgets. However, this positive leverage effect is limited and less visible in Member

States who receive relatively little money, like France and Belgium.

Concerning R&D, there is evidence of increasing alignment between the national budgets and the

EU budgets, since the financial resources of FP7 increased substantially, making it relatively more

important as a part of total funding for research.

In case of education, Member States are not obliged to provide additional funding to EU funds. The

leverage effect of EU funding is mainly limited to enhanced policy coordination, for example by

benchmarking practices. To safeguard and increase the employability of the labour force, lifelong

learning programmes and vocational training are gaining importance in all Member States.

In the area of development aid, Member States give part of their national development aid to the

EU level, which is further managed by the European Commission, however, there is no co-financing

model involving the national budgets of the Member States. All EU Member States have

committed to achieve the 0.7% (of GDP) expenditure target, set by the UN. All Member States have

aligned their policies to the objectives of the European Consensus on development, as well as to

the Millennium Development Goals.

In the field of foreign and security policy, there is limited evidence of budgetary coordination

between the EU budget and the national budgets. Foreign and security policy is still highly

regarded as a policy area with a strong national dimension, despite the growing alignment of

policy priorities at EU level. It is assumed that national budgets are more impacted by decision-

making within the context of NATO.

5.2. RECOMMENDATIONS

The following recommendations could enhance budgetary coordination between the EU budget

and national budgets:

First, the transparency and visibility of budgetary coordination between both levels could be

enhanced by

aligning the categories of expenditure at national and EU budget level.

An aggregate

analysis of European public finance –requiring high quality and comparable data on the functional

breakdown of government expenditure - is currently lacking. Comparing public expenditure data

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Policy Department D: Budgetary Affairs

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of the Member States is possible through using a functional breakdown of government

expenditure, based on the COFOG methodology (Classification of Functions of Government). As it

does for the national budgets, Eurostat could also align the current categories of expenditure of

the EU budget with the COFOG categories - without changing the EU budget structure - , in order

to be able to compare national and EU public expenditure simultaneously within one analytical

framework.