Brussels, 29 June 2011
Money where it matters – how the EU budget delivers value to you
The European Union's budget provides important value added to the lives of its 500 million citizens. It is small (around 1% of EU gross national income) but produces concrete results on many things where financing at EU level gives a better return on investment. This MEMO gives a series of examples that show how the current EU budget has made a difference.
Table of contents
1. Boosting growth and jobs
Connecting Europe: Energy
Connecting Europe: Transport
Connecting Europe: telecommunications and ICT
Investing in Europe's people: Research
Investing in Europe's people:
Investing in Europe's people: education
Investing in Europe's regions: Cohesion policy
2. Making Europe safer for its citizens
Safer food: agriculture, fisheries and health
Safer environment: climate action and environment
3. Making Europe count in the world
Enlargement and Neighbourhood policy
Humanitarian aid and crisis response
4. Value for money of EU staff
Have you ever wondered why your high-speed train suddenly has to slow down from 200 km/h to 90 km/h just because it just crossed a border in the European Union? Why certain gas flows cannot be reversed and citizens and companies are left in the cold during a gas crisis? Or why it is still not easy to study abroad or get your professional qualification recognised in another member state? The EU budget can help find solutions to these persisting gaps and bottlenecks. It can help to boost growth and jobs by connecting Europe, by investing in Europe's people and by investing in Europe's regions.
Connecting Europe: Energy
The development of the European Union's energy infrastructure is at the heart of the Europe 2020 strategy and the goal of a resource-efficient Europe. The completion of networks and the removal of gaps, bottlenecks and energy islands are essential for the development of the internal market for energy, for security of supply and for transporting renewable energy. Both citizens and companies need to be able to rely on gas and power being available to them at all times and at a fair price. The share of EU funding is usually rather small, but it leverages other public and private investment. In the case of the European Economic Recovery Programme (EERP) of 2009, it was estimated that EU funding would be amplified about ten-fold.
Doubling transmission capacities between France and Spain: The EU has paid one third of the total investment costs of € 700 Million for the work that has almost doubled the capacity of the existing power line up to 2800 MW. Spain and France had not been able to agree on making the investment alone. The project was considered simply too costly for the benefit it would bring to them. The EU stepped in because the benefits extended well beyond these two countries. As it improves Spain's links to the rest of Europe, citizens and companies in Germany, Belgium, UK, Italy, will in the future be able to receive power produced from renewable energy (solar panels and wind power) in Spain. This means that more renewable energy will be used in Europe, which is good for the climate. It also means that consumers and companies will get renewable energy at a fair price, because solar energy can be produced more cheaply in Spain than in Northern Europe, simply because there are more sunny days. And without this connection, Spain couldn't export all its solar and wind power.
Reversing gas flows: The EU is co-financing the upgrading the Baumgarten gas hub in Austria and installing compressors to allow the transport of gas from Germany via Austria to Slovakia, Hungary, Slovenia and Croatia. By providing 50% of the total investment sum of € 13, 4 Million the EU will increase security of supply in Slovakia, Hungary, Slovenia and Croatia by 2012. In the event of a gas crisis, Germany could step in by delivering gas to these countries. This was not possible during the 2009 Russia-Ukraine crisis, because existing pipelines could transport gas only from East to West and not in the other direction. Without the EU, the upgrade would not have been achieved at all, as Austria had no incentive to make investments which only benefit customers in other countries.
New gas pipeline from Algeria to Italy: The EU is co-financing 3% (€120 million) of the new gas pipelines that will not only connect gas reserves in Algeria to Italy but also increase security of supply for countries such as Slovakia, the Czech Republic, Hungary, Romania, Slovenia.
The first ever East-West electricity interconnection between Ireland and the United Kingdom: Thanks to EU funding amounting to €110 million, a € 300 million loan from the EIB was obtained and resulted in attractive loan terms from other banks. The EU funding gave the project the EU seal of approval and underscored its political significance in connecting the EU's energy islands with the wider European electricity grid. Ireland has the capacity to generate considerable amounts of electricity from renewable wind energy. The surplus can be exported to the UK via the interconnector. The project would not have happened without the stimulus of EU funding. The project will be completed in 2012.
Estlink-2 electricity interconnection between Finland and Estonia: In March 2010 the Commission granted €100 million in funding to support the construction of the Estlink-2 electricity cable with a capacity of 650 megawatts between Estonia and Finland, which should become operational by 2014. The Estlink-2 connection is the largest ever investment in the Estonian electricity network, with a total estimated cost of €320 million. The project is being built jointly by the Estonian electricity transmission system operator and its Finnish counterpart. The project will contribute significantly to the further integration of the Baltic and Nordic energy markets by tripling transmission capacities between the two countries. It will also increase energy security in the Baltics.
Connecting Europe: Transport
EU Transport Policy is there to put in place the transport infrastructure and interconnections that underpin the Single Market, to ensure the free-flow of goods and people and to support growth, jobs and EU competitiveness. In the past, transport systems in Europe developed largely along national lines. This led to poor or absent transport interconnections at the borders, or along key corridors. Weak transport interconnections hamper economic growth. On the other hand, every million we spend though the TEN-T fund at European level generates €5 million in investment from Member State Governments. And every million generates €20 million from the private sector. It is estimated that removing 20-25 major bottlenecks to create a core European transport network over the period 2014-2020 would have a very significant impact on economic growth, potentially generating up to 2.9 million jobs.
Another challenge is interoperability. Simply put, the national hardware (rail track widths, safety certification systems, electrification systems, rail signalling etc.) does not join up. Planes have to contact different air traffic controllers in every country they cross. These technical barriers result in the duplication of tasks and create delays. These are also hugely costly and inefficient. Since the 1970s, European transport policy has been working to create key connections and remove the many bottlenecks and barriers blocking the free-flow of goods and people. The results have been very significant.
EU air liberalisation truly changed the face of air transport. The emergence of low cost airlines would simply not have been possible without the EU starting to open up markets in the 1990s. The EU now has 20 low-cost carriers, representing 40.2% of the internal EU market. In 1990 there were none. Thanks to air liberalisation, millions of consumers have gained access to a much greater choice of air routes at far more competitive prices. Liberalisation dramatically boosted the number of air passengers and routes served. The number of scheduled passenger carriers has risen from 135 to 152, and the average number of routes inside the Union has increased by 140% from 1,680 to 4,000 between 1992 and 2010. At the same time, competition has intensified: routes with more than two competitors have increased by 415% from 93 to 479 (Source: Official Airline Guide). The number of intra-EU passengers has increased from 367 million in 2000 to 480 million in 2009.
Building the missing links, upgrading infrastructure: EU money has been used to partially finance – and stimulate significant investment from Member States – to build missing links and upgrade sections of key transport and corridors. These missing links would probably not be constructed by any one Member State acting on its own – they require European support and co-ordination, sometimes between several Member States.
Malmo – Copenhagen: The Øresund bridge is the longest combined road and rail bridge in Europe. It opened to traffic on 1 July 2000. The project cost €2.7 billion and there were no budget overruns. The EU budget contributed €127 million. Rail travel has developed quickly with a growth of 230% since 2001, with 11.2 million passengers in 2009. In the same year, 7 million vehicles crossed the Øresund Bridge. Thanks to this interconnection, an increasing number of businesses have activities on the other side of Øresund. The most successful examples of cooperation are the Øresund University and the Øresund Science Region. The Øresund fixed link demonstrates the extent to which infrastructure is essential for the functioning of the Internal Market.
The high-speed railway axis Paris – Brussels – Cologne – Amsterdam – London: The first European cross-border high-speed rail network linking Paris-Brussels-Cologne-Amsterdam-London was completed in 2007. It has brought substantial reductions in journey times between the five countries and provides passengers with a real alternative to air and road transport. Journey times were more than halved (e.g. from over 3 hours to 1h22 on the Paris-Brussels link and from over 5 hours to 1h50 on the London-Brussels link). In many cases, the new high speed rail line has completely taken over from traditional air routes. The project has resulted in a huge modal shift from air and road to rail. For example, the number of Eurostar and Thalys passengers increased from 6.5 million in 1995 to 15.3 million in 2009. Airlines no longer provide a service between Paris and Brussels, as taking the train is faster than flying. The EU TEN-T programme provided €720 million in funding while the EIB lent €1.8 billion on a total project cost of €17.3 billion.
The Single European Sky
European skies and airports risk saturation. Without substantial investment to support the deployment of Europe's air traffic management system (the Single European Sky), our airports will be jam-packed. Concretely, by 2030, 19 airports will be operating at full capacity eight hours a day, every day of the year, affecting 50% of all flights on departure or arrival or both. In 2007 only 5 airports were operating at or near capacity, involving 17% of flights. Without investment, Europe would not only have to reject a large portion of potential demand, it would also be vulnerable to regular delays and flight cancellations on an unprecedented scale. If we continue with business as usual, congestion costs will increase around 50% by 2050. The main problem is that the air traffic management system is archaic; the basic technologies used date from the 1950s. The solution is European and has a name: SESAR, a joint initiative of the European Commission, EUROCONTROL and the aviation sector with the aim of a) tripling airspace capacity, b) improving safety tenfold, c) reducing the environmental impact by 10%, d) reducing air traffic management costs by 50%; and e) shortening passengers' flight time by 10% and reducing cancellations by 50%.
Electric cars are being developed and rolled out on the market. But we need to develop common basic standards for electric charging points across the EU - otherwise you could find yourself crossing from France to Germany without being able to refuel. That work has started. 42 partners from the industry, the energy sector, electric vehicles manufacturers, municipalities as well as universities and research institutions have joined forces to develop and to demonstrate a commonly accepted and user-friendly framework for the charging infrastructure. The project called 'Green eMotion' has a total budget of €41.8 million and will be funded from the European Commission with €24.2 million. Green eMotion will connect ongoing regional and national electromobility initiatives making use of the results to compare the different technology approaches and promote the best solutions for the European market.
Connecting Europe: telecommunications and ICT
Lower prices, more choice of quality services: Europe's consumers and businesses now enjoy a wider choice of good quality telephone services that are substantially cheaper. This is the direct result of the EU liberalising telecommunications markets and so introducing more competition. People can now choose between several telecoms operators and have the right to change their minds within one working day (whilst keeping the same number). As a result, charges for national fixed line phone calls have decreased by more than 60% since 1998. Mobile prices went down by at least 30% between 2006 and 2010.
Roaming: Thanks to legislation drafted by the Commission that introduced price caps, costs for roamed mobile phone calls made in the EU have dropped by 73% since 2005. These caps were cut further each year and the last cut will occur on 1 July 2011. In addition, consumers and businessmen no longer face unexpected bill shocks for downloading data over mobile networks - monthly bills for data downloading are limited to €50 unless the customer explicitly agrees otherwise. The Commission aims to ensure that differences between roaming and national telecoms tariffs should approach zero by 2015. In July 2011 the Commission will therefore propose new roaming rules that will apply from 1 July 2012.
Digital Single Market: The European Commission is working together with Member States to establish a Digital Single Market. European internet-based businesses can only thrive in a borderless environment, but currently Europe is a patchwork of national online markets. European consumers are therefore prevented from enjoying the benefits of a Digital Single Market. 60% of attempted cross-border internet shopping orders fail. Only 8% of those in the EU who shop online buy from another country. Consumers are often unable to download music online legally from another EU country. Failing to implement the Digital Single Market could lead to Europe losing its competitive edge in the next 10 years. To make sure this does not happen, the Commission is working to break down fragmentation and strengthen the Single Market.
Super fast internet: Widely available and competitively-priced super fast internet access is the 'Digital Oxygen' Europe needs to grow and increase its prosperity. The EU therefore aims to bring basic broadband to all Europeans by 2013 and to ensure that, by 2020, (i) all Europeans have access to much higher internet speeds of above 30 Mbps and (ii) 50% or more of European households subscribe to internet access above 100 Mbps.
Mobile phones and broadband: 3G and 4G: With the support of EU-funding, the European industry has gained worldwide leadership in mobile and wireless technologies and standards. The European 3G standard is used by over 600 million mobile phones in the world. A €120 million investment 10-15 years ago at EU level has enabled the flourishing of a €250 billion product and services market for 3G telecom equipment today. With EU-funding, researchers have developed the first concept of the 4G-based mobile network infrastructure. 4G is the latest wireless technology providing mobile internet speeds 10 times faster than current 3G mobile networks. 4G will provide the necessary speeds to meet demand for bandwidth-hungry services in the next 100 years while stimulating economic growth. An estimated 500 million users will benefit from 4G communication networks by 2016. Market analysts expect operators worldwide to invest nearly €6 billion in 4G equipment by 2013.
Investing in Europe's people: Research
Some research is both very expensive and needs to be done on a very large scale to provide meaningful results. It is crucial to maximise value for money. Because conducting certain research collaboratively at EU level avoids duplication and allows us to pool skills and existing knowledge, it gets better results than could be achieved by purely national spending. One euro of EU Framework Programme funding leads to an increase in industry added value of between €7 and €14. The long-term macro-economic impact of the current Seventh Framework programme (about €8 billion/year) amounts to 900,000 jobs, of which 300,000 are in research, an extra 0.96 percent of GDP, an extra 1.57 percent of exports, and a reduction by 0.88 percent of imports.
Only by pooling resources, both through using EU funding programmes and through further coordination of national funding, can the EU achieve the critical mass in science and research to take the lead in tackling the biggest challenges facing Europe and the world, today and into the future. These challenges include: climate change, energy and food security, resource efficiency, health and an ageing population.
Progress in coming up with solutions to these issues will not only directly improve the lives of millions of Europeans, it will also give Europe a competitive edge in the industries of the future and the products and services that other countries who are facing the same challenges want to buy. That means in turn creating sustainable and high quality jobs in Europe.
The European Green Car Initiative (EGCI) is making the widespread introduction of electric vehicles in Europe a commercial reality. Bringing together 51 research projects, large equipment manufacturers such as Siemens, along with leading car manufacturers (Volkswagen and Renault) EGCI has succeeded in getting major stakeholders moving in the same direction. EGCI is tackling issues such as European standards, electricity distribution networks, smart ICT technologies, faster-charging, longer-life batteries, and lighter, stronger car components. As oil becomes scarcer and the pressure on car manufacturers to "green-up" builds, many countries are setting ambitious targets for the introduction of electric cars: China is aiming for 50% of new cars sales in 2020. The world market will be enormous, and Europe must be a major player; electric car technologies have the potential to create unprecedented job opportunities and growth. Total investment in EGCI amounts to €5 billion with €4 billion coming from the European Investment Bank and €1 billion mobilised under the EU research programme. Europe can become a world leader in this new sector only through collaboration, setting common standards and reaching agreement on developing compatible and complementary technologies.
EU funding leverages private investment. In the case of the EU's RSFF (Risk Sharing Finance Facility), which provides funding for large-scale, high-risk technological projects with major potential economic and social benefits, the volume of loans is 12 times the EU contribution, and the additional investment leveraged in research, development and innovation is 30 times the EU contribution.
As a result of targeted research by the Commission's Joint Research Centre costing about € 1 million, the cost of tests for BSE were reduced and the direct EC subsidy per test could be scaled back from €20 to €7 resulting in cumulative savings for the Community budget of about €250 million over the period 2002-2006.
A first pilot initiative to combine national research programmes and funding to advance research in neurodegenerative diseases, in particular Alzheimer’s, was launched in 2009 with, to date, 23 countries participating. Better coordination of the research efforts in the EU will lead to more efficiency for Europe in tackling societal challenges related to these issues.
Pooling research resources and knowledge is crucial if we are to effectively compete with the US and Japan, both of which have much larger populations and therefore larger public and private research and innovation budgets than any single EU country. Emerging economies have also entered the race and are catching up fast. Although EU research investment in real terms increased by 50% in the period 1995 to 2008, the US saw a 60% increase, while investment grew by 75% in the four most knowledge intensive countries in Asia (Japan, South Korea, Singapore and Taiwan). The pace of investment growth is even higher, at 145%, in the BRIS countries (Brazil, Russia, India, South-Africa), and 855% in China. At this rate, China will overtake the EU in terms of volume of R&D expenditure by 2014.
Investing in Europe's people: employment and social funding
The European Social Fund (ESF) reaches about 10 million Europeans each year and helps 2 million citizens each year find a job. One in four people who found a job between 2000 and 2008 did so after receiving ESF training. With EU level support, Member States make new investments in people that would not have happened otherwise. By spending more money in less well-off countries, the European Social Fund (ESF) helps Member States invest much more in human capital - essential to helping them catch up to competitive levels. Poland receives €250 of ESF funding per person for 2007-2013, compared to €50 for Denmark. Since the year 2000, Member States have received €80 billion in ESF support, representing around 10% of the total budget of the European Union. This is matched by more then €40 billion of national and private co-funding. Over the period 2000-20081, the ESF supported approximately 76 million people and 1.7 million organisations. Each year, the European Social Fund (ESF) reaches about 10 million Europeans and helps 2 million citizens find a job. Young people make up almost a quarter of the 10 million ESF participants each year, boosting youth employment, entrepreneurship and the mobility of young workers, helping lower school drop-out rates and raising skill levels. (In 2009 is the drop out level was 3.1 million out of 11.0 million).
Since its launch in 2006, the European Globalisation Adjustment Fund (EGF) has managed 77 applications from 19 countries for almost € 353 million, covering training and job-search assistance for nearly 75 000 European workers who lost their job. The EGF provides funding for measures that go beyond the obligations of a company following large scale redundancies and in 2009 over 40 % of those trained through EGF support found employment.
With the new PROGRESS microfinance facility, EU funding leverages financing from international financial institutions, extending micro-financing to at-risk groups and developing entrepreneurship, the social economy and micro-enterprises across the EU. Until the end of 2013, the Union's contribution to the Microfinance Facility will be €100 million (2010-2013). The Commission estimates that the Union's contribution could be leveraged to €500 million in micro-credits by bringing in other international financial institutions like the European Investment Fund (EIF).
In response to the economic crisis, additional advance EU funded payments provided an immediate cash injection of €6.25 billion in 2009 (€1.76 billion for ESF and €4.5 billion for ERDF) so more money could be spent rapidly on Member States' priority projects, helping SMEs and refocusing support on the most vulnerable .
In Germany a federal programme co-financed by the ESF has helped short-time workers gain new qualifications.
The MG Rover case (United Kingdom)
The package of support offered by the Better West Midlands project in England delivers a bespoke service tailored to the needs of both employers and individuals. It includes individual advice and support and access to skills and training. Funding from the European Social Fund helped to provide an extended range of support and training to workers under threat or notice of redundancy, prior to their current employment ending. The aim is to maximise their pability to move directly into new employment. The project will help about 14 500 people from companies across the West Midlands in manufacturing and other sectors.
EGF supports more than 3000 workers in Germany
In June 2007 Germany applied for EGF support following 3 303 job losses when the Taiwanese mobile phone manufacturer BenQ withdrew all financial support from its two German based subsidiaries, causing their insolvency. These subsidiaries were located in Munich, (Bavaria), Kamp-Lintfort and Bocholt (North Rhine Westphalia). 2 528 of the dismissed workers decided to enter into a transfer company to benefit from active labour market policy measures. The EGF made it possible to extend the period from 12 to 17 months and to increase the quality of the support measures. Ultimately, 1 879 (or 74 %) of the EGF beneficiaries were reintegrated into the labour market.
Investing in Europe's people: education
Overall, the EU invests €2.5 billion a year on education, youth, culture, cinema and the mobility of researchers –1.8% of the EU's total budget. This relatively small share of the budget delivers significant results and considerable added value for Member States, which do not have comparable funding schemes. The organisation of transnational students' mobility and cooperation between education institutions (e.g. universities, schools, etc) is more effective at EU level than a maze of bilateral initiatives. Money spent through EU programmes is usually 'seed money' that attracts further public and private funding, helping many worthwhile projects to get off the ground. EU funding has proven it can create very high returns.
Through the Lifelong Learning Programme, the EU will invest around € 7 billion between 2007 and 2013 in transnational mobility exchanges and cross-border projects Each year around 300 000 European students and teachers spend a period of time training or studying abroad and about 20 000 education institutions take part in transnational cooperation projects. The programme also helps to bridge the gap between the world of education and the world of work, notably via traineeships in enterprises. In particular through the Erasmus Programme, 2.5 million students have received support since 1987 to study or take up a business traineeship abroad. Studies show that Erasmus students are more adaptable and motivated, and that the experience boosts their prospects on the labour market. At the same time, the Erasmus Programme helped to pave the way for more comparable university programmes and the recognition of studies abroad (the 'Bologna Process'). The programme budget is fully used each year and around 50% of requests have to be turned down.
Every year, through the Marie Curie Actions, the EU gives 8 000 researchers the opportunity to work abroad and stimulates partnerships between research and business. The European Institute of Innovation and Technology is the first ever attempt to strengthen the 'knowledge triangle' of education, research and innovation at EU level. The EIT will increasingly tackle the 'innovation gap', enhancing EU's competitiveness and creating jobs.
Culture: The cultural and creative sectors account for 4.5% of the EU's GDP, and 3.8% of employment, which is higher than many other key sectors. Support from the MEDIA programme for film distribution improves the competitiveness of the industry and helps small companies, thus creating job opportunities. The multiplier effect of MEDIA support in the cinemas sector can be estimated at €13 revenue generated for each €1 invested.
Mobility for Company Placements (traineeships)
Company placements or traineeships in companies or organisations are the fastest growing action within the Erasmus and Lifelong Learning Programmes. In the period from 2009-2010, more than 35 000 work placements abroad were funded, which represents an annual increase of over 17%. Grants enable students to spend a period of three to twelve months doing a traineeship abroad. Spending time in a company abroad helps students to better meet the requirements of the labour market, develop specific skills and also boosts cooperation between higher education institutions and companies.
Investing in Europe's regions: Cohesion policy
Cohesion policy helps poorer regions and countries to catch up and to connect to the Single Market. It is a future-oriented investment policy that also clearly benefits the rest of Europe by creating growth and jobs across the board.
For example, intra-EU exports have gone up considerably to regions benefiting from cohesion funds. There is a clear link between cohesion policy and growth in the EU. Studies have shown that GDP in the EU-25 as a whole was 0.7% higher in 2009 thanks to cohesion policy investments over the 2000-2006 period. This was estimated to rise to 4% by 2020. In the EU-15 alone, the estimate is a cumulative net effect on GDP of 3.3% by 2020. In other words, regional investment is European development. Growth in one, perhaps poorer region, leads to the purchase of goods and services from another, richer region. This boosts the development of the Single Market, which represents between 60 and 80% of Member States' exports, considerably more than to third countries like China, India or the US.
Cohesion policy over the 2000-2006 period resulted in a return of €2.1 for each euro invested. By 2020, the return is estimated at €4.2 per euro invested. Cohesion policy also helped to increase the level of employment. Estimates for 2009 are that the number employed was 5.6 million higher as a result of policy in 2000-2006, or an average of 560.000 more a year than without Cohesion policy.
In the aftermath of the recent downturn and in countries struggling with the debt crisis, Cohesion policy has a key role to play in economic and social recovery, leveraging investment in growth sectors like energy efficiency, but also helping people train and improve their skills so that they can find a job.
Cohesion spending benefits several Member States
In 2009, Poland, the biggest recipient of cohesion policy funding in the current programming period, undertook a study2 of the benefits for EU15 countries as a result of cohesion policy in Poland. Based on a survey of contracts won by enterprises from the EU15 countries, the study shows that around 8% of the total contract volume in Poland went to EU15 companies, enterprises from Germany being the by far most important group. These companies were typically successful in larger Polish projects.
Lahti Clean-tech cluster (Finland)
The EU's intervention in this project had a catalyst effect: it encouraged innovation and the development of environmental technologies by bringing together small and large enterprises, educational organisations and regional authorities. The cluster provides services which make it easier for its 200 participating businesses to network and branch out into the international market.
The Lahti Science and Business Park which coordinates the cluster has become the leading environmental technology centre in Finland. Between 2005 and 2007, some 20 clean-tech companies and organisations were relocated to the region. The EU budget contributed €1.5 million to this project. The business development and relocation services of the park have attracted investment worth more than €30 million and some 170 new jobs to the region.
New approach to renewables in Güssing (Austria)
Güssing (a small town in the southeast of Austria) is a model for the forward-looking renewable energy policy at local level that is driving the economic development of the whole region. Using wood from local forests in its biomass heating plant, the town produces more electricity than it consumes and is able to provide power for the entire region. Over 50 companies have been created in the renewable energy sector alone and since 1995 Güssing has reduced its carbon dioxide emissions by 100%.
The availability of cheap heat (30% cheaper) has led to over 1 000 new jobs being created in and around the town, including 100 in a new office building on an industrial estate which houses the European Centre for Renewable Energy. In order to facilitate the dissemination of experience in the field of renewable energy sources, a network including regional, national, and international partners has been founded.
The EU budget contributed €461.000 to this project.
There are thousands of smaller and bigger cross-border challenges that Europeans are facing every day. It is the EU'a job to shape an area of law, rights and justice to make the daily lives of our citizens easier. At our external borders, the recent events in the Southern Mediterranean have shown that Europe is not only called upon to provide unequivocal support to the democratic transitions in the Arab world, but that more cooperation and solidarity are needed to cope with tens of thousands of migrants arriving in Europe. Equally, environmental challenges do not stop at our borders and can best be tackled through European action and support. Moving towards a greener economy will be easier to achieve when EU action and support help to stimulate investments in eco-innovation, resource efficiency and climate action. We are happy to have a large choice of food products across the EU.=, but this requires pan-European systems and rules on food safety, consumer protection and animal health and making sure that risky products do not enter our Union – all tasks that can be best tackled through cooperation on customs controls.
EU Pilot Project on Intra-EU relocation from Malta (EUREMA): Under the European Refugee Fund (ERF) the Commission has financed two projects on the intra-EU relocation of refugees from Malta: one pilot project with the participation of France for an amount of € 770.000 and another, ongoing project known as "EUREMA" (European Relocation Malta) for an amount of nearly € 2 million. EUREMA is led by the Maltese authorities with the participation of ten Member States (France, Germany, UK, Portugal, Luxembourg, Hungary, Poland, Slovenia, Slovakia and Romania) which pledged to relocate almost 260 refugees stranded in Malta to their territories. UNHCR and the International Organisation for Migration (IOM) also participate in the project. The European funding covered the costs and made it possible for Member States to take the refugees, offer them a better future and to alleviate the particular migratory pressure that Malta frequently faces due to its geographical situation.
Agencies like Europol or Frontex help Member States to cooperate on the ground, for instance, in the fight against organised crime, the control of the EU's external borders, or to keep the European open space safe. The setting-up of joint investigation teams, under the coordination of Europol (€83 million budget in 2011), has led to successful operations disrupting international criminal groups involved in drug trafficking or currency counterfeiting. With approximately 77 tons in 2008, the reported seizures of cocaine alone are almost double those reported in 2003 in Europe. The "market" is European and the response must be European too.
The construction of the Schengen area means that one Member State controls its section of the external borders on behalf of all the others. The EU needs to be able to support those Member States who face difficult situations due to their geographical location, and the patterns of travel flows and migratory routes. This is the role of Frontex (€78 million budget in 2011), which is confronted with increasing demands from Member States. In June 2011, the reinforcement of Frontex was agreed.
The Rapid Border Intervention Teams (RABIT) in Greece: During the operation, which lasted from 2 November 2010 to 2 March 2011, every week close to 200 well-trained guest officers from 26 Member States assisted their Greek colleagues in controlling the border areas as well as in identifying the apprehended irregular immigrants. Managed by Frontex, the deployment of Rapid Border Intervention Teams has also helped the Greek authorities in gathering information on migration routes and facilitator networks which exploit the desperate situation of irregular immigrants. In October, prior to the operation, there were a total of 7 607 persons detected at the Greek-Turkish land border. During the 4 months' operational period, over 11,800 migrants were detected and the number of illegal entries dropped by over 70%.
The joint operation Hera, coordinated by Frontex, represents Europe’s biggest search-and-rescue operation. It prevented countless deaths by deterring irregular migrants from embarking on a perilous voyage from West Africa (Senegal, Mauritania and Cape Verde) to the Canary Islands across the high seas in unseaworthy, small boats. Successive Hera operations contributed to almost closing the West African route for irregular migration (from a peak of almost 32,000 arrivals in 2006 in the Canary islands). But smuggling and trafficking networks are not easily deterred. Organised crime is profit‐motivated and the methods employed become ever more complex and sophisticated. Since the launch of Hera, the people‐smuggling route has shifted systematically through the Central Mediterranean to the Eastern Mediterranean route, with the Greek‐Turkish border.
Customs: After the Fukushima incident in Japan in March 2011, when many Europeans were worried about radiation in food and goods imported from Japan, the customs authorities in Europe were at the front line, ensuring that radiation thresholds were respected and no contaminated products entered the EU.
The EU customs union has been in place for more than 40 years and has generated an added value far beyond the remit of European customs policy. In addition to collecting customs and agricultural duties for EU Member States and the EU budget (exceeding €20 billion/year), it supports Member States in the collection of VAT, excise duties and other revenue and ensures the control of exports in order to avoid undue VAT or excise refunds. Furthermore, it directly controls and implements other EU policies such as transport, agriculture, sanitary or environmental measures. The customs union is also the frontline for ensuring the security of the supply-chain, the fight against smuggling and fraud, and the enforcement of intellectual property rights (IPR) at the border.
The total cost incurred by the 27 Member States to obtain the same results in terms of the fight against fraud, trade facilitation and uniform application of the legislation would be at least 4 times higher than the cost currently incurred by the Commission to deliver the same services. In short, every euro spent by the Commission contributes to reducing the costs incurred by the 27 Member States by at least 4€.
With a budget of €324 million over the period 2008-2013, the Customs programme is a key EU tool that enables the customs union to function seamlessly as one, instead of a patchwork of 27 implementing administrations. The Programme allows, among other things, the national administrations to handle 7 customs declarations every second, totalling 211 million per year, without disruptions for imports and exports.
The Europe-wide secure computer network interconnecting all customs and tax administrations costs €11 million per year. It saves €35 million each year for Member States, which would otherwise have to establish bilateral networks.
The central IT system (called "TARIC") which makes all EU tariff rates and trade measures available online on a daily basis is another example of the enormous economies of scale that can be achieved through EU management. Since 2007, the Commission has spent €3.7 million to develop this system. If all Member States had developed their own system, costs would have totalled about €80 million, a ratio of 1 to 20!
Another example in the area of customs is the economic operators system (EOS) which stores information of 2.5 million legal entities registered in the 27 EU Member States that are in contact with customs administrations. With such a single system, businesses save time and resources as they no longer need to register in each Member State when performing their activities. It cost the Commission €5 million to develop EOS while Member States would have spent €25 million to develop it separately.
Safer food: agriculture, fisheries and health
Food security is a strategic matter for the European Union and any nation, and a wide majority of the EU's citizens believe it is a vital issue. Hence, this is an essential part of the budget – 70% of the public funding for agriculture and rural development in Europe is provided for by the EU budget.
The policy reaches a wide range of goals. In the EU, rural areas cover 77% of EU territory (47% agricultural land and 30% forest) and are home to about half its population (farming communities and other residents). 13.7 million farmers feed 500 million Europeans, maintain our landscapes, play a central role in preserving the environment, protecting biodiversity and fighting climate change to help maintain a living countryside. The high level of consumer protection standards makes sure citizens have quality food on their plates.
The CAP does not have a big budget, even if its proportion of the EU budget is relatively high:
Expenditure on agriculture policy through the CAP is less than 1% of all government spending by all Member States. By comparison, the EU and its Member States spend 3 times as much on defence and nearly 5 times as much on research, which is not harmonised.
The overall cost for the EU is around € 55 billion per year, so it costs per citizen about €110 a year, €2,20 a week, or 30 cents a day - the price of an apple.
Since agriculture is the only sector primarily funded by the European Union budget, spending at European level largely replaces national spending, which is not the case for other policies. This explains why it represents a large proportion of the EU budget. It was 40% of the total EU budget this year, but that share has been steadily declining from 71% in 1984 (with only 10 member states). It will be 39% in 2013 (with 27 member states). This downward trend will continue after 2013.
In the absence of a single common policy, 27 different national policies would be more costly and less effective, inducing different levels of intervention and trigger a major risk of distortion of competition. Reforms have made European agriculture much more market-oriented economy, with public stocks now virtually empty and no throwing away of food.
A reform of the Common Fisheries Policy is also underway. The Union has exclusive competence in the conservation of marine biological resources and shared competence for the rest of the policy. In the area of Maritime policy and Fisheries the pilot projects 'MARSUNO' and 'BluemassMed' are meant to pave the way towards more effective and cost efficient maritime surveillance throughout the EU. The authorities of 6 coastal Member States are involved in the BluemassMed project in the Mediterranean sea basin. The MARSUNO project encompasses authorities from 9 Member States bordering North European sea basins and Norway. BluemassMed and MARSUNO are thus providing a substantial contribution towards finding ways to avoid expensive duplication of data gathering that can be avoided if the above authorities appropriately communicate with each other. BlueMassMed, coordinated by France, costs €10.2 million, of which the EU contributes €3.6 million. MARSUNO, coordinated by Sweden, costs €3.05 million, of which the EU contributes €1.9 million.
Diseases, affecting animals or plants, and contaminations of the food chain do not stop at borders. The EU allocates around €300 million per year to co-finance annual or multi-annual programmes to control and eradicate a number of diseases. Through legislation and other means, of the EU provides a comprehensive approach to keep food safe from its production site until it ends up on our plates –from farm to fork, the EU ensures food safety. Despite the emergence of new diseases such as bluetongue, the health status in the EU has continuously improved, also in the new Member States, which has a positive impact on the functioning of the internal market in live animals and food of animal origin, on EU export possibilities and on consumer confidence. Support at EU level is important as the impact is cross-border whereas otherwise, the costs would generally be shouldered by one Member State alone. Similarly, in the area of Plant Health, Member States can receive EU co-financing for expenditures relating to eradication and containment of regulated harmful organisms of plants. Large-scale eradication actions by Member States for outbreaks are very difficult without EU support as an individual Member State has to bear large costs, which to a large extent benefit other Member States and the Union as a whole.
Classical swine fever, for example, is a major disease of pigs and wild boar which caused devastating outbreaks in the '90s in several EU Member States. The direct and indirect losses from the outbreak in the Netherlands in 1997-1998 were estimated at around €2 billion. Since the mid-1990s the EU has allocated around €218 million for emergency eradication and surveillance. The disease situation has improved considerably, with no major outbreak during the last ten years, leading to a virtual eradication of disease in most of the EU, and a substantial improvement also in the new Member States. This means, that if one counts the costs in the Netherlands alone, each euro spent at EU level has a potential cost saving of € 9, or even higher if costs in other Member States are also taken into consideration. As a result of targeted research carried out by the Joint Research Centre costing about €1 million, the cost of tests for BSE –more widely known as mad-cow disease– were reduced. The direct European Commission subsidy per test scaled back from €20 to €7, resulting in a cumulative saving of about €250 million from 2002 to 2006.
Safer environment: climate action and environment
Most environmental problems, including climate change, do not stop at borders and cannot be solved by Member States acting alone. They need to join forces and create partnerships with stakeholders to tackle these problems which, if not solved, may later come at a great cost for the EU as whole.
EU climate action includes not only the first and most ambitious set of legally binding emission reductions and renewable energy targets, but also the world's first and biggest emissions trading scheme ETS. Nobody would believe that a Belgian or Danish national carbon market would make sense or help to reduce emissions effectively – let alone convince our global partners to follow their example. Only together will Europe succeed in taking effective action on climate change, with the subsequent positive effects of more sustainable growth and job creation. In addition, EU climate action reduces our energy bill: in 2010 Europe paid around € 50 billion more on oil imports than in 2009. That is almost a third of what all the EU Member States combined spend on research and development. Decreasing reliance on fossil fuels and making more use of renewable energy would mean not having to send fortunes abroad each time the oil prices spike. Instead, the money saved could be invested in European research, education or other growth- and job-enhancing measures.
Determined and timely European action in climate and energy policy would create a net 1.5 million additional jobs by 2020, for example to retrofit buildings and create smart electricity grids in Europe. Without such collective action, fossil fuel imports are projected to double by 2050. With such action, fossil fuel imports will be more than halved compared to today. Average fuel costs will fall by between € 175 and € 320 billion a year.
With the Global Energy Efficiency and Renewable Energy Fund, the Commission has set up an innovative global risk capital fund to mobilise private investment in energy efficiency and renewable projects in developing countries and emerging economies. The EU budget contributed just €80 million between 2007 and 2010, but about 300 million in private investment is expected to be mobilised. EU spending for technological development and early deployment (for example with carbon capture and storage) provides the advantage of sharing the risk of innovative demonstration projects, where technology is tried for the first time. Sharing the risks with the help of the EU budget and benefitting from the results at national level are welcome ways to mitigate climate change through new technology.
The EU's environmental programme LIFE+ attracts partnerships that otherwise would be difficult to set up, ensuring a more effective intervention than Member States individual action through an increased pooling of resources and expertise. The programme has an overall envelope of €2.2 billion (or around €300 million a year), including climate action. While the scale of the programme is relatively small, its individual projects have often had a disproportionately large impact.
Multiple benefits for the environment: An Austrian LIFE project known as Donauufer is a good example of the sort of multiple benefits environment funding can bring at the European level. A small-scale project, it restored natural river banks and floodplains along a 3 km stretch of the Danube, but the results have been felt far beyond the immediate vicinity. As well as local improvements to the conservation status of endangered fish, plants and birds like the white-tailed eagle, the slowing of the river current and the unblocking of floodplain side-arms has reduced the risk of flooding in nearby Hainburg and in Bratislava, Slovakia, further down the river. Subsequently visited by countless experts, it serves as a model for similar initiatives along the Danube and elsewhere. Yet it cost only €1.7 million (with €0.7 million of EU co-financing).
Turning mud into gold across the EU: Wastewater treatment has a key role to play in EU environment legislation, as water is clearly a shared resource. One of the products of wastewater treatment processes is sewage sludge: every year nine million tonnes of sewage sludge are produced in Europe, containing enough energy to meet the electricity and heating needs for 1.7 million homes. But sludge is an environmentally sensitive issue, and there is a significant need to build public confidence. A LIFE project called 'MAD but Better' developed a full-scale treatment process which is highly adaptable to a range of companies in related waste industries, and has become a catalyst for improved wastewater management. The project’s technology is now the standard sewage sludge treatment for the entire UK water industry. By August 2007, four Enzymic Hydrolysis Plants had been built, and five more ordered around the UK. Some 12 EU Member States and 26 countries around the world have now shown interest in replicating the treatment plant. Part of the appeal is the low price: the cost of sludge disposal is further reduced to just €210 per tonne of dry solid, half the standard cost of landfilling. The technique also saves farmers around €175 per hectare in fertiliser replacement.
The European Earth Monitoring programme (GMES) could make around € 6.9 billion per year for industry, or 0.2% of EU annual GDP. Natural and manmade catastrophes in Europe, America, Asia and Africa, coupled with increased security needs, have further reinforced the case for improved monitoring systems. The European initiative for the Global Monitoring for Environment and Security (GMES) will gather relevant data, for example concerning environmental pollution, floods, refugee movements, forest fires or earthquakes in support of public policy makers’ needs. GMES has great potential for businesses in the services market, which will be able to make use of the data it provides free of charge. Over the 2006-2030 period, the potential GMES benefits accumulated would be comparable to 0.2% of the EU current annual GDP. The benefits from all the GMES services in full use would equal € 130 billion (2005 prices) or around € 6.9 billion per year.
Building an EU-wide area of law, rights and justice: The European Commission's proposals in the justice area seek to offer practical solutions to cross-border problems for both citizens and business: for citizens to feel at ease about living, travelling and working in another Member State and to trust that their rights are protected no matter where they are in the European Union they happen to be; and for businesses to make full use of the possibilities in the Single Market. With only 0.1% of the EU budget used in justice area, many of the policy initiatives in the justice area have concrete cost-saving effects and can stimulate growth.
Rapid technological developments and globalisation have profoundly changed the world. The Commission's aim is to make these rules fit to meet the challenges of this new age, shaped by globalisation and new technologies. A strong, consistent and uniform European framework on data protection will enhance the "internal market dimension" of data protection. The new rules will reduce the administrative burden on companies (for example with regard to notifications which are estimated to cost €80 million/year) and ensure a true level playing field for all businesses holding personal data and operating in different Member States.
Consumer rights directive
The Consumer Rights Directive will bring tangible benefits to consumers and businesses. The current rules are fragmented, preventing citizens and businesses from taking full advantage of our Single Market. The proposal will increase consumer protection by eliminating hidden charges and costs on the Internet. Businesses will benefit from a single set of core rules for distance and off-premises contracts in the European Union, creating a level playing field and reducing transaction costs for cross-border traders, notably in e-commerce. A standard set of consumer contract terms could cut compliance costs substantially by up to 97% for EU wide traders.
Integration of Roma
Europe's 10-12 million Roma continue to face discrimination, exclusion and the denial of their rights. The social and economic integration of Roma is in the interest of European societies, not least because Roma integration could mean considerable economic benefits. Roma represent a growing share of the working age population, with an average age of 25 compared to the EU average of 40. They make up one in five new labour market entrants in Bulgaria and Romania. Research by the World Bank suggests full Roma integration could be worth around €0.5 billion a year to the economies of some countries by improving productivity, cutting welfare bills and boosting tax receipts. This is why the European Commission called on Member States to set national strategies for Roma integration.
Women on the labour market
Despite making up nearly half of the workforce and accounting for 60% of new university graduates in the EU, women continue to be under-represented in economic decision-making positions, in particular at the top. Our aim is to use untapped talent to reach our economic and social goals. More women in top jobs is good for business, particularly since they make around 80% of consumer purchasing decisions. A projection from Goldman Sachs found that closing the gender gap could boost the euro zone's gross domestic product by up to 13%.
Would you seriously think that your country alone is big or important enough to shape globalisation or defend your interests and values in the world? At a time when the world order is changing rapidly and emerging economies like China, India, and Brazil are asserting their influence, Europe must stand together and be an active partner in shaping global action. To pull its weight on the global scene and defend its interests and values, Europe needs to pool its resources and act united, for example through its common trade policy, by preparing accession candidates to become new members, by investing in our neighbourhood, and by helping those in need.
The EU is the largest trading bloc worldwide. The overall value of EU trade (exports and imports of goods, services and foreign direct investments) is worth about €3.5 trillion per year (2010). EU trade policy works to create growth and jobs for European companies by making it easier for EU companies to do business across the globe. Trade policy connects Europe to the main sources and regions of global growth. More than 36 million jobs in Europe depend directly on our trade with the rest of the world. EU trade policy over the next 5 years aims to add around €150 billion to our economy. Increased trade offers a greater variety of goods, at lower prices to consumers. The gains for the average consumer are estimated at around €600 per year.
A single trade policy (including trade in goods, services and foreign investment) at EU level works because the 27 member states of the European Union share a single market and a single external border meaning that the EU trades as a single bloc with foreign countries. Both in the World Trade Organization, where the rules of international trade are agreed and enforced, and with individual trading partners, EU Member States speak and negotiate major trade deals 'with one voice' by the European Trade Commissioner.
Emerging economies are increasing their share of world growth. By 2015, 90% of world growth will be generated outside Europe, with a third from China alone. Developing and emerging countries are likely to account for nearly 60% of world GDP by 2030, compared to less than 50% today. The EU has maintained its 17.5% share in world trade on average over the last decade despite the rise of emerging economies.
The EU-South Korea Free Trade Agreement enters into force on 1 July: It marks a significant milestone in EU-South Korea trade relations with the entry into force of the Free Trade Agreement (FTA) that will bring €850 million in savings to EU exporters on day one. This is the most ambitious trade deal ever negotiated by the EU and its first with an Asian country. The FTA is expected to create new trade in goods and services for the EU worth €19.1 billion, and to more than double EU-South Korea bilateral trade in the next 20 years compared to a scenario without the agreement.
Enlargement and Neighbourhood policy
The EU is best placed to assist (potential) candidate countries to prepare for accession and to accompany neighbourhood countries' economies in aligning to EU rules and standards. Support for closer integration with our neighbours helps the EU to achieve its own objectives in a number of areas which are key to its own prosperity and security, as well as to economic recovery and sustainable growth, such as energy and network infrastructures, the protection of the environment and efforts to address climate change.
Enlargement policy yields tangible results in terms of growth and job creation everywhere in the EU, in old and new member states. Enlargement creates a win-win situation for the current and the possible future member states.
For instance, since the 2004 and 2007 EU enlargement (12 countries) approximately 150.000 new jobs have been created in Austria. Half of Austrian exports are now going to these new Member States. Austrian direct investment in Central and Eastern European countries corresponds to almost 50% of Austria's total direct investment abroad.
The accession perspective provides strong encouragement for political and economic reform in the countries which are the closest neighbours of the EU. Reforms in the area of rule of law, including judicial reform, and the fight against corruption and organised crime benefit not just the countries concerned but also the citizens and economic operators of the European Union. These reforms reinforce peace, stability and democracy in Europe and save the EU money which would otherwise have to be spent on crisis prevention, reinforced border controls and combating illegal immigration.
The European Neighbourhood Policy (ENP) was developed in 2004 to strengthen the prosperity, stability and security of both the EU and its neighbours. In order to enhance our partnership; we go beyond classical foreign policy to support reform and modernisation, based on the projection of our experiences beyond our borders. It covers a wider range of issues, like transport, energy, research, migration..
The use of innovative financial instruments was spearheaded in the Neighbourhood Region through the creation of the Neighbourhood Investment Facility (NIF). The NIF is a blending instrument through which EU budget grants leverage IFI loans to provide assistance in support of the ENP objectives and its regional initiatives (Union for the Mediterranean (UfM), the Eastern Partnership or the Black Sea Synergy). Since its inception in May 2008, the NIF has been funded with nearly €308 million grant resources (€245 million from the EU budget, €62.5 million from the Member States) and has approved grant contributions to 39 projects for a total amount of about €277 million, contributing to leverage over €5 billion loans from European Finance Institutions for a total investment cost exceeding €10 billion. The NIF has proven to be an effective tool for mobilizing extra support for ENP countries (East and South) and it has also helped promoting donor co-ordination in the Neighborhood region.
The European Union is a global economic and political player, with regional and global security interests and responsibilities. It is actively involved in protecting human rights, promoting a decent work agenda, other universal values and respect of international environmental and social conventions. The EU is increasingly active in conflict prevention, crisis management and peace building, through EU-led crisis management missions. Moreover, the EU is committed to supporting the multilateral system and its reform. External policies are therefore a major field of action for the EU, which has been reinforced within the new institutional framework of the Lisbon Treaty. The EU's comparative advantage is linked to its global field presence, its wide-ranging expertise, its supranational nature, its role as facilitator of coordination, and to the economies of scale.
The EU has a network of international agreements with partners and organizations all over the world, not matched by individual Member States, which gives to all of them influence in almost all fields of international relations. With 27 Member States acting within common policies and strategies, the EU alone has the critical weight to respond to global challenges, such as poverty reduction, climate change, managing migration and stability. The EU as a global player has a credibility and a neutrality which is unmatched by individual Member States when it comes to human rights, electoral observation, governance and crisis resolution, and neutrality and impartiality of the delivery of humanitarian assistance. The EU is also unique in its long term and predictable engagement in development assistance, coupled with a track record in supporting the populations most in need on a global scale.
EU added value in the area of external action can be illustrated by the following examples in various situations. Most of them emphasize the capacity of the EU to mobilize critical financial and political means to significantly impact a given situation, something that could hardly be done by Member States alone with the same impact.
Since the outburst of the crisis in Northern Africa, the EU has mobilised considerable political and financial means to accompany the transition towards democracy of our neighbours. Such a process obviously requires considerable means to be mobilized. Taking the Tunisian example: since the beginning of the year, € 60 million have been made available to help resolve the humanitarian consequences of the Libyan crisis in Tunisia and Egypt. The EU is also getting ready to support the electoral process in Tunisia and is adapting its on-going cooperation with Tunisia with an additional €140 million for the 2011-2013 period. Other instruments have also been mobilised to reach out to Tunisian civil society and support the democratic transition. The EU is also currently discussing a possible adaptation of its neighbourhood policy. The added value of EU external action resides in the fast mobilisation of substantial political and financial means, coupled with the definition of a common framework of intervention.
In the light of a quickly deteriorating situation in the Western Sahel, a region in which security and development are intimately interlinked, the EU has mobilized both significant funding and increased political means to address a situation that could potentially have disastrous consequences. The EU's current and programmed engagement responding to the security and development objectives of the Strategy amounts to approximately €450 million, mostly originating from the European Development Fund but also from the Stability instrument. The Strategy for security and development in the Sahel should allow for a more comprehensive and a more coordinated European engagement as well as to mobilise additional financial and political means.
In the aftermath of the earthquake which struck Haiti in January 2010, the EU and the Member States agreed on a common response in support of the reconstruction efforts. The EU andmember states presented a common EU pledge of €1,234 billion at the March 2010 New York donors Conference on Haiti reconstruction, out of which €522 million from the EU. Such joint commitment has certainly heightened the visibility and relevance of the EU as the main international donor to the reconstruction process. Member States and the EU also carried out a joint programming exercise which resulted in a revised joint strategy, covering the period 2011-2013. This joint programming exercise underpins the objective of a more coordinated and effective EU-Member States intervention.
The EU and its Member States provide more than half of global development assistance (56%). The EU is committed to achieving the Millennium Development Goals on time by the end of 2015.
In the current economic context, it makes more sense than ever to improve the coordination of development aid to maximise the impact while avoiding duplicating efforts and losing money. Acting through the EU can actually save money for Member States could add up to potential savings of between 3 and 6 billion a year, according to a recent study (The Benefits of a European Approach, by HTSPE, 2009).
Working with the EU is also cheaper. Administrative costs – estimated at 5.4% on the basis of 2009 data - are lower than the average administrative costs of the principal donors for bilateral aid. The administrative rules that apply are intended to make sure that EU taxpayers' money is properly spent, using strict criteria which can be monitored. It is about transparency and good management.
Furthermore, development aid is an investment for all Europeans. Thanks to development cooperation, some issues can be tackled in advance and save money. By investing in developing countries we address issues such as migration, climate change, food security, piracy, sexual violence and many others. It is often far cheaper to eliminate the root causes of poverty than to deal with its symptoms further down the line.
The African Peace Facility (APF) is a prime example of how the EU can take the initiative on an issue, involving Member States as well. Most Member States do not work in this area, but through the EU they are able to channel their contributions in a simple and fast way. Since 2004, the EU has provided €740 million, helping to prevent conflicts and promote stability after they have taken place.
The Food Facility is another project which only a donor with the critical weight of the EU was able to put in place. Established in December 2008 as a rapid response to soaring food prices in developing countries, it made an additional €1 billion available for projects and programmes in 50 target countries during the period 2009-2011. So far it has helped around 50 million people. It demonstrates Europe’s ability to react to a global food security crisis, on a scale and in a quality which Member States would find not possible to match.
The Vulnerability FLEX (V-FLEX), launched by the European Union in 2009, has helped between 40 million and 80 million people in developing countries at risk of absolute poverty because of the global economic crisis. €434 million out of the €500 million allocated under the mechanism in 2009 and 2010 have been disbursed. 17 of the poorest African and Caribbean countries have benefited.
Humanitarian aid and crisis response
Humanitarian aid and civil protection assistance are the first response by the European Union to crises and disasters. The relevance of EU action in this area, managed by the Commission, is underscored by the rising frequency, intensity and complexity of humanitarian crises and natural and man-made disasters around the world. On a global scale, the number of natural disasters has increased five-fold between 1979 and 2010. In 2010 alone, there were 950 disasters around the world (of which - five mega-disasters), afflicting hundreds of millions of people. Europe is at risk as well: floods and forest fires, earthquakes and extreme weather are becoming more frequent. In 2010, the economic cost of humanitarian crises was estimated at approximately €100 billion. The problem is likely to get worse in the future: it is expected that by 2015 the number of people affected by climatic disasters will grow by 375 million per year. When the European Union responds together to these growing challenges with humanitarian and civil protection support, our actions and investment are more efficient, more effective, and more relevant than if Member States would struggle separately to cope with the effects of crises in Europe and abroad.
The EU is the largest provider of humanitarian assistance worldwide, delivering around 50% of official humanitarian aid. The Commission is the world's second-largest humanitarian aid donor. Through its sheer size, the EU humanitarian aid budget effectively maximises the value of otherwise dispersed efforts, while promoting a sound division of labour. One example of this value is the so-called "forgotten crises" - disasters or conflicts which are not in the headlines, but whose victims require international assistance. For instance, the European Commission was instrumental in focusing international attention on the crisis in the Sahel region (Burkina Faso, Chad, Mali, Mauritania and Niger), suffering from chronically poor rains, political instability, high food prices and epidemics that aggravate already fragile communities but attract limited attention abroad.
Responding effectively to increasingly complex crisis like in Haiti, Japan and Libya is often beyond the capacity of each Member State - or comes at an exorbitant price. The European Union, on the other hand, through its common resources and the available national capabilities, has sufficient means, experience and expertise to respond efficiently and in a cost-effective way. One example is the Union’s assistance to Japan following the triple disaster of March 2011, when the Civil Protection Mechanism coordinated the provision and delivery of assistance (from blankets through water to radiation meters), and the Commission supplemented this civil protection support, provided by Member States, with humanitarian aid to the evacuees. Another example is Libya: within the first week of civil unrest, the Commission identified, facilitated and co-financed transport assets for the immediate evacuation of 5 800 EU citizens. The operation was executed through the use of aeroplanes and ships provided by the Member States, and was coordinated and partially co-financed by the European Commission. In the same week, the Commission dispatched humanitarian teams to the Egyptian and Tunisian borders, where thousands of people were left stranded while attempting to flee the violence across the Libyan borders. The Commission was the first international humanitarian donor with continuous presence inside Libya. Until the arrival of the United Nations on 9 April, EU humanitarian experts in Benghazi coordinated the international aid in eastern Libya.
Value for money derives not only from the way EU policies and programmes are conceived and implemented but also from the fact that there are highly qualified people working in the EU institutions who prepare and monitor EU laws, coordinate member states' actions, prepare merger, cartel and anti-trust decisions, ensure that the EU works in 23 languages, and who manage the funding programmes. Below are a few examples of the value for money of staff working in the European Commission:
People working in the Directorates-General for Economic and Financial Affairs and the Internal Market are playing a crucial role in fighting the worst financial crisis in decades with its consequences on the euro area in particular. The European Commission has been at the forefront of developing a collective and comprehensive European response to the crisis. For example, the package of six proposals presented by the European Commission in September 2010 will lead to a change in the tide of current coordination and surveillance of economic policies in Europe.
In the Directorate-General for Internal Market and Services (DG MARKT), the staff has elaborated proposals for the new European financial supervisory architecture, whose new authorities started work this year. These new supervisory authorities facilitate and coordinate actions by national supervisors. This EU level effort represents a vast improvement in efficiency compared to the fragmentation that existed before. The total staffing levels of the Authorities will be around 150 people in 2011 and these are planned to rise to around 300 after four years of operation. This figure is well below the staffing levels of most national supervisors (for example, the UK Financial Supervisory Authority has around 3,300 staff), yet will be sufficient to carry out the required tasks.
People working in DG MARKT are also at the origin of EU rules that have led to open and competitive public procurement which has generated savings of approximately €20 billion. This far exceeds the costs generated by the regulatory framework, which are estimated to be €5 billion.
Roaming: Thanks to legislation drafted by staff of the Commission that introduced price caps, costs for roamed mobile phone calls made in the EU have dropped by 73% since 2005.
The terrible oil tanker accidents of “Erika” and the “Prestige” led the EU to drastically reform its existing regime and to adopt new rules and standards for preventing accidents at sea. Also here it was people working in the Commission drafting the legislative proposals to prevent further accidental oil spills.
The China IPR SME Helpdesk, co-financed by the Commission, provides free support services for EU small and medium-sized enterprises to protect and enforce their intellectual property rights in or relating to China.
Commission staff working in the Directorate-General for Competition implement the European Union's competition policy, which provides direct and indirect benefits to European consumers and businesses of many billions of euro. These are all cases with a significant cross-border impact, better dealt with at European than at national level. The Commission took 14 antitrust and cartel decisions in 2010, imposing € 2,873,676,433 in fines. The money received in fines reduces the amount of money that Member States have to contribute to the EU budget. In 2010, the estimated customer benefit resulting from just the Commission's cartel decisions was at least €7.2 billion (and perhaps as high as €10.8 billion). For mergers, the Commission issued 274 decisions in 2010, of which 16 required the parties to change their proposed mergers plans in some way. In 2010, the estimated benefit derived from the Commission's decisions on mergers was at least €4.2 billion (and perhaps as high as €6.3 billion). The European Commission has dealt with around 4 500 cases since the introduction of the Merger Regulation in 1989. Using the conservative assumption that an average merger involves four Member States, we have avoided 18 000 national proceedings in 20 years. In 2010 the Commission also issued 435 State aid decisions, many of which were a vital part of the EU's response to the financial and economic crisis.
Elaborated by people in DG Justice, the European Commission pushed for the EU-wide recognition of judgements: In December 2010, the European Commission proposed to abolish the 'exequatur' – a complicated and costly procedure for recognising and enforcing judgements in civil and commercial matters between Member States. The reform proposed by the Commission will foster the free circulation of judgements. With the abolition of the 'exequatur' procedure any judgement in any Member State will be recognised in any other Member State. On average, 'exequatur' costs a company or individual around €2,000 in a straightforward case in the EU, ranging from €1,100 in Bulgaria to €3,800 in Italy. For more complex cases, the costs can reach €12,700. This procedure also implies an unnecessary hassle of going through intermediary proceedings that can sometimes take up to 12 months. The Lisbon Treaty now allows us to give full faith and credit to judgements in civil and commercial matters from all 27 EU Member States.
In the internal market, difference in tax rules may be an obstacle to doing businesses in an efficient manner. For example, the Council, based on proposals elaborated by Commission staff, adopted on 13 July 2010, a directive ensuring that tax authorities now accept e-invoices issued in other Member States. Until now, differences in national e-invoicing rules have hindered such evolution. The Commission estimates that removing obstacles to e-invoicing in VAT rules could generate annual cost savings for businesses of up to €18 billion.
The main action of staff working in DG Trade is negotiating both multi-lateral and bi-lateral trade deals to open-up access to new markets for European companies. The EU trade negotiators from the Directorate-General for Trade make some 2000 business trips each year to open up markets and improve the rulebook for business to trade. DG Trade operates with not even 750 staff in Brussels and EU delegations around the world. This is a modest number of people, when compared to similar trade policy departments in the US, Canada or Japan. Under a single EU trade policy - no longer must a country enter into 27 separate marathons of trade negotiations; no longer must a country have 27 separate teams of negotiators forced to travel to 27 different capitals for talks. A single EU trade policy is therefore an effective and efficient means of offering 'real value for money'. Another task of the Commission's trade staff is to ensure that our trade partners 'play fair' by respecting EU and WTO trade rules and take legal action on behalf of EU business against them when they don't. We also impose extra duties on importers who don't play by the rules on the EU market. Furthermore, the DG offers many services to EU business to ensure they get the most out of a single EU trade policy, for example an on-line market access database for EU exporters, an export helpdesk for developing countries and dedicated market access teams in the EU and in countries around the world who work to lift unfair trade barriers experienced by EU companies.
The more than 100 humanitarian aid experts of the Commission are the eyes and ears of Europe in the field. In crisis and disaster situations they assess humanitarian needs and meet the immediate priorities - an asset that would be unavailable to each individual Member State. These experts provide the Commission and Member States with first-hand, regular and reliable information on humanitarian needs (e.g. through situation reports). They also coordinate with humanitarian partners on the ground to prevent assistance duplication and to avoid gaps. What's more, EU humanitarian experts monitor the implementation of EU-funded projects, which puts them on the front-line of the European Commission’s rigorous system of checks and audits.
The data presented in this section comes from the ESF ex-post evaluation as well as 2009 data from MS provided in annual implementation reports.
Instytut Badan Strukturnalnych, Assessment of the benefits drawn by EU15 countries as a result of Cohesion Policy Implementation in Poland (2009)