Report - Scoreboard of European public expenditures
Negotiations on the "financial framework" of the European Union (EU) for 2014-2020 provide an opportunity to consider appropriate changes to the Community Budget. These developments are part of a double approach: it is "better to spend together" and to deepen European integration, while simultaneously respecting the political organization of the Union. This first approach is made imperative by the joint commitment of countries in the Union to consolidate their budgets in an effort to control public deficits, the second follows by an increased communalization of funding and public policies of the Union with historic roots.
What is an "aggregate" approach?
"Aggregate" measures in European public spending proposed in this report (which is an updated version of the one published in June 2009) provide an overview of funding undertaken by the European Union on two different levels of governance: at a national level and at the EU level. Its goal is thus to provide a statistical overview of national public administration expenditures (central, state government, local government and social security funds) and expenditures in the European Union that together make up a considerable volume, which can be used to analyze its structure.
The "aggregate" approach used in the scoreboard enables us to:
- assess the level of total public expenditure and the main priorities in the EU (by sector and/or public policy objectives)
- identify areas of intervention that have become essentially communalized or remain exclusively national prerogatives
- highlight areas in which the competences are shared between the EU centrally and at the national level. Most expenditures financed by the EU are often accompanied by large national public expenditures
- consider the potential power divisions between the EU and the national level in order to optimize certain expenses.
Although national expenditures continue to account for the overwhelming majority of expenditures in the EU (98%), the "aggregate" approach allows for international comparisons. The structure and organization of European public spending can be compared to other confederal or federal data (all things considered) with the precautions imposed by the confrontation of political developments. The United States and Canada are in this case selected as two "models" that are quite different both in terms of allocation of budgetary powers and autonomy at the regional level. Comparing these elements enables us to question the different options to optimize the allocation of finances in Europe. Based on this (and for analysis purposes), comparisons have most often been done "leaving out social protection and health expenditures" because these predominant expenditures tend to "crush" the other expenditures used to compare European national budgets, and raises methodological bias concerns.
The study is constrained by the institutional framework and statistical data
Because the EU classifications of public finances, expressed as "financial" in the study, were used, they largely determined the way in which the scoreboard was presented. Based on this, the 2007-2013 financial framework was then adapted to include all national public finances.
The classifications used (CAS classifications) combine the sections based on the "financial framework objectives" of the EU (objectives 1a, 1b, 2, 3, 4 and 5) with a breakdown of these targets by "sectors of intervention" (R&D, energy, transport, etc.). These are sectors that are more consistent with identified expenditure categories from national budgets (see table below). This "combined" classification is the basis for the "aggregate" approach.
The conditions of the statistical data available determine the study. Thus, the data used is from 2009, which is the latest data available at the Union level for the data "executed" (meaning effective data). Moreover, the scope of interstate or international comparisons was limited when the data on expenditures in a given sector were not available. Finally, in cases where specific financial data were not available arbitrations reported as appropriate and allowing for approximations were conducted.
The data were taken from the EU’s Official Journal (L68 of 15 March 2011), which presents the expenditures undertaken by the "general budget of the European Union" and also shows the budget of the European Communities for each fiscal year. We call this the "community" budget. The national data are taken from the OECD and Eurostat. Data for the United States, Canada and Japan are either taken from domestic sources or from the OECD. Annex 4 specifies the sources of all the data used.
Despite these constraints, the scoreboard presents "information of great importance", illuminating, on the one hand, the overall nature and the level of public expenditures in Europe (Part 1) and, on the other hand, the breakdown of expenditures between the national level and the EU (Part 2).