Time for Europe to fix its finances

The Local
The Local - [email protected] • 27 Jul, 2010 Updated Tue 27 Jul 2010 15:15 CEST
Time for Europe to fix its finances

Many European countries are facing austerity measures in the wake of the financial crisis. Now it's time for the EU itself to get serious about tackling waste, writes Anna Kinberg Batra, chair of the Swedish Parliament's Committee on EU Affairs.


On July 23rd, the European Union's so-called stress test of banks was published. The tests assess the ability of the EU's payment systems to withstand shocks. But if the EU is to emerge stronger from the economic crisis, it will require more than improved regulation of our payment systems: the EU and its member states will have to pursue responsible economic policies. Unfortunately, the political will to do this currently appears to be lacking.

Earlier this summer, only three EU countries had budget deficits and national debts within the allowed limits. Several countries are finding it hard to turn deficits and crisis situations into stable public finances. Sweden is one of the few countries that will this year meet the European Union's requirements for stable public finances. This is good news, as it means that we can now talk about possible improvements to public services or tax cuts instead of presenting austerity measures. That we can do this is thanks to the fact that the Alliance government has pursued responsible economic policies, instead of buying car factories and putting money into the banks.

Work is now underway on next year's EU budget, and the promised review of the union's long-term budget will hopefully soon become reality. Sweden has run a credible campaign for better discipline, with support on both sides of the political divide. But it seems that many governments believe that subsidies and protectionism at the EU level can continue, even while member states are taking drastic measures at home. This would be dangerous, not only for the economy, but also for the credibility of the EU. In recent years we have discussed toughening the rules and imposing sanctions on countries that don’t follow the budget rules. All this is worthwhile and important, but it also means that the EU’s own budget can’t escape the pressure to change - and not just within agriculture or regional policy, but also within administration.

There are problems in the EU with money that doesn’t reach its intended recipients and with huge administrative costs - the travelling circus of the European Parliament, for example. This is estimated to cost over €200 million per year. But there are further examples of costs that need to be examined: two advisory bodies, the Committee of the Regions and the European Economic and Social Committee, are expected next year to cost €90 and €140 million respectively, despite the fact that they do not have the power to legislate and despite the fact that the matters they deal with are also dealt with by other institutions, including national parliaments.

If all the member states had Sweden’s budget deficit and our attitude to the subsidy systems, the EU’s finances would be well-managed and the budget could be reduced, despite more members and more duties. The whole of the European Union needs to think carefully about how we can start to cut our coat according to our cloth in a tougher environment. Despite the fact that the world has gone through the biggest financial crisis since the thirties, with public finance crises as a result, stable finances in Europe are a long way off. Unreformed subsidies are not the way to stability in any country, and are no better at the European level. This is why the Swedish government has criticized the Commission’s budget proposal.

Negotiations with the European Parliament and other member states will continue after the Swedish elections in September. A responsible government, which takes responsibility for public finances and plays an active part in the EU, is needed now more than ever. We in the Moderate Party will continue to pursue responsible economic policies, both at home and in the EU. Discipline in the EU’s own finances must be a part of this.

Anna Kinberg Batra, MP (Moderate)

Chair of the Committee on EU Affairs, Swedish Parliament.


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