May 26, 2008
The EU budget should be decomposed into three distinct parts. Part I would include redistributive operations, including all structural funds and horizontal transfers required to bring net balances in line with relative prosperity. Part II would describe activities for the provision of European public goods: it would show on the revenue side own resources and on the expenditure side spending for the production of European public goods and the pursuit of common policies. Any subsidy paid on interest payments on the European loans would also be shown here. Part III would show capital operations funded with loans, having on the revenue side the proceeds of loans – in due course netted of attendant repayments – and on the expenditure side the use made of money.
The ceiling on EU resources set by the European Council would only apply to the sum of revenues accruing to the EU budget under Part I and Part II.
The Treaty of Lisbon has brought the Multi-annual Financial Framework (MFF) into the Treaty (art. 312) and involved the Parliament in the decision. Decisions will be taken by unanimity, but the European Council may authorise the Council to decide by qualified majority. But some further adjustments are required, which can implemented without Treaty changes. In particular, the duration of the MFF should be aligned with the term of office of Parliament, running for five years. Parliament could then seek a mandate from the electorate on the desirable evolution of the budget.