Thinking the EU budget and public spending in Europe: the need to use an aggregate approach

Contemporary EU debates on public finances are particularly animated. Discussions have been going on about the post 2013 financial framework, with a particular focus on how to finance “smart, sustainable and inclusive growth” in the coming years but also on how to ensure the “added value” of the EU budget1. This debate takes place in a context of fiscal consolidation at the national level. Most member states face severe difficulties in the management of their public finances due to the combination of several factors: the effects of the financial crisis, the level of public debt and the need for active stabilizing policy intervention to support growth and employment.

In this constrained environment, the question of “how to spend public money in a better way” is raised in an acute way. At the EU level, the current debate on the future of the EU budget reveals that the focus is nowadays on “how to spend better together” rather than “how to spend much more together”. In this respect, there is a growing interest on the possibility of achieving efficiency gains by reinforcing the coordination of national and EU spending and by adopting an aggregate vision of total public spending in the EU. In other words, to strengthen the multi level governance of public finances in the EU appears as a means to increase the efficiency of public expenditure.