Date: 3 July 2008
 
Keynote speaker: Corrado Passera, CEO and Managing Director, Intesa Sanpaolo 
Discussants:
Mario Nava, Head of Unit for Financial Markets Infrastructure, DG Markt, European Commission
André Sapir, Professor, Université Libre de Bruxelles and Senior Fellow, Bruegel
Daniel Gros, Director, CEPS
 
CEPS hosted a lunchtime meeting aimed at putting forward reform strategies for the European Budget, in order to guarantee long term and sustainable growth for the Union.
Corrado Passera, Managing Director and CEO of Italian banking group Intesa Sanpaolo, opened the event underlining how the reform of the EU Budget, rather of being considered a merely technical problem, should be understood as a key political issue, and eventually as a tool to relaunch the whole European project.
 
Notwithstanding the political stability, economic prosperity and the rising standards of living that the Union has been able to provide to its citizens over the last decades, the EU economy is currently underperforming, while the European institutions are called into question by growing scepticism among the population. Therefore, a review of the budget aimed at foster EU competitiveness, would represent a crucial opportunity to stimulating growth, overcoming this economic impasse, and then strengthening European citizens' trust in the community institutions in the process.
 
Hence, according to Passera, this reform should be above all aimed at reinforcing innovation and dynamism, primarily through promoting investments in research and development and higher education, as had already been pointed out in the Sapir report. Moreover, relaunching the EU competitiveness will require more efficient and integrated infrastructures, especially for energy. Passera continued by arguing that, even if there will always be a need for common sectoral policies, the priorities for the budget should be set more consistently with the real priorities for the European growth.
 
Another important goal for the EU is cohesion, spending approximately 40 % of the budget on regional aid seemed therefore appropriate.
 
Passera also called for the creation of a common defence budget, aimed at reinforcing the peacekeeping capabilities of the EU, allowing it to play an active international role .
 
Passera concluded his speech advocating greater efforts concerning transparency and communication on the budget expenditure. In his view an ambitious goal such as the relaunch of the European project can only be achieved abandoning the just retour approach in favour allocation criteria based on merit.
The event continued with an intervention of CEPS Director Daniel Gros, who underlined the difficulties in obtaining a meaningful reform of the EU budget given that every country had a veto (unanimity principle). However, according Gros, a greater involvement of external actors, such as the private sector, might help in breaking the stalemate on budget reform.
 
Mario Nava, Head of the Financial Markets' Infrastructure Unit in DG Market of the European Commission, stressed the need to adopt a holistic and no-taboo approach when considering budget issues. Moreover, as far as procedures and negotiations are concerned, he stressed that the current mechanisms negatively affect the allocation criteria of the budget, as they often result in cuts of non pre-allocated resources.
 
André Sapir, Professor of International Economics at the ULB and Senior Fellow at Bruegel, provided another angle by underlining how radically the the global context has been changing over the last decades. When the internal market project was launched in the late 1980s, China and India were not even mentioned as potential competitors. The dramatic rise of these emerging economies imposed a redefinition of the European strategies for competitiveness. Lisbon was one expression of this, and the EU budget should also be reformed to enable Europe to prepare itself for the emergence of new global actors.