1. Jorge Núñez Ferrer, CEPS; jorge.nunez@ext.ceps.eu Presentation for the European Parliament lunch seminar 2 February 2010

2. Prelude EU is inefficiently using its aggregate public resources and those are often incoherent with objectivesEU is inefficiently using its aggregate public resources and those are often incoherent with objectives The EU budget is also used inefficiently and is thus underminedThe EU budget is also used inefficiently and is thus undermined MEMBER STATES AND THE EU NEED A RESTRUCTURING OF PUBLIC EXPENDITURESMEMBER STATES AND THE EU NEED A RESTRUCTURING OF PUBLIC EXPENDITURES

3. Aggregate EU public expenditure vs. Switzerland and Canada SOCIAL EXPENDITURE 41,4%20,8% 20,7% Competitiveness and growth 15,2%30,1% 20,2% Source: Centre d’Analyse Strategique (2009), Scoreboard of public spending in the European Union and its Member States, Paris

4. EU BUDGET Best role is leverage and solidarity CAP is too heavy and too big as a share of the EU budget, not necessarily EU public expenditure Use budget for leverage and solidarity also for the CAP (different co-financing rates depending GNI or GDP) Competitiveness concerns imaginary, CAP is today completely unfairly distributed, ironically co-financing can reduce unfairness. CAP and budget can free themselves from present policy straightjacket. CAP pillars 1&2

5. CLIMATE AND BUDGET CLIMATE CHANGE IS A HORIZONTAL PROBLEM ENSURE COHERENCE WITH CLIMATE OBJECTIVES (and other objectives too) MAXIMISE LEVERAGE INSTRUMENTS, use EIB, PPPs etc. IMPROVE STRATEGIC PLANING AND EVALUATION

6. R&D The SET Plan needs sufficient resources Ensure ADDITIONALITY – funds have to focus on R&D where risks too high or maturity of technology too far into the future. Fund large scale demonstrations IMPROVE participation of PRIVATE SECTOR FOLLOW UP projects after completion Find cause of low PRIVATE R&D in Europe

7. Single market in Energy High level of renewables needs large integrated grids. Energy savings and more energy security can be achieved with a single European energy market. TEN-E needs to be reinforced and HVDC lines installed where needed. Most assistance for cross border and cohesion countries (with cohesion funds).

8. COHERENCE & FOCUS ALL POLICIES NEED TO BE COHERENT WITH EMISSION OBJECTIVES! EU PUBLIC PROCUREMENT RULES: Should require appropriate technologies from contractors Emission impacts need to be integrated, as well as impacts of climate changes on infrastructure use and depreciation Concentrate on resource use, ecosystem management, and on fast practical side: reinforce action for waste management (methane)

9. Agriculture Emission reduction potential in the case of the EU agricultural sector is limited But LAND MANAGEMENT needs further exploring, explore carbon capture potential (could be integrated into ETS) ADAPTATION has to be central in future policy, explore private insurance schemes with state guarantees.

10. BETTER STRATEGIES Integrate climate objectives in member states development strategies effectively Combine EU budget, EIB, national and private funds to develop low carbon zones. – Showcases, good for green jobs, investment and promoting EU technologies. In line with Lisbon and Gothenburg strategy EU and national strategic potential need improvement: Better targeting, better evaluation and a culture of results not fund absorption is needed

11. EXTERNAL ACTION Copenhagen has shown us what happens if EU does not have a single face, a single voice and a single VISIBLE financial tool. One financial channel and one common position will be important to influence global policy. Financing: ETS is the most obvious candidate. It fulfils criteria for EU own resources better than most other options.

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