The Multiannual Financial Framework 2021-2027 has put European Union (EU) finances under the spotlight in unprecedented ways. Certainly, the creation of Next Generation EU has contributed to this outcome. For the first time in its history, the EU is allowed to borrow money from financial markets. To fully appreciate the innovative reach of this instrument, however, it is necessary to broaden the scope of analysis. NGEU might be the result of contingent circumstances, as much as the outcome of a longer path of development in the budgetary domain producing slow but constant institutional and inter-institutional changes. The aim of this paper is to delve into EU long-term budgetary politics to capture the development of decision-making processes and inter-institutional relations, with a specific focus on the European Commission.
The EU budget is relatively small if compared to an average national budget. Yet, it has a considerable impact on public expenditure in EU member states. Since the budgetary reform in 1988, EU long-term budgets have determined the levels and purposes of European finances for at least five years. The Commission initiates this procedure by submitting a budgetary proposal to the European Parliament and the Council of the EU, which then negotiate it under an informal but increasingly relevant presence of the European Council. Studies of EU politics have well depicted the power struggles among the budgetary actors. This paper contributes to the literature with a new conceptualisation and detailed empirical account of the Commission’s role. Given the relevance of European finances in determining the future of EU integration, understanding how this institution has performed its role in budgetary politics, and its evolution over time, becomes crucial.
Indeed, the budget-maximisation approach of the first Delors packages was hardly matched by the following ones. This apparent decline in the Commission’s ambition has been, however, mostly explained in terms of structure. Faced with increasing constraints, the Commission settles for more modest budgetary proposals. Building on new intergovernmentalism, this study suggests the need for a more comprehensive explanation. It is hypothesised that the rise in public contestation induces an intra-institutional change resulting in the politicisation and presidentialisation of the Commission. In turn, this alters the inter-institutional balance favouring a closer relation between the Commission and the European Council.
Through a new theoretical and methodological framework, this paper intends to shed light on the progressive emergence of a closer link between European finances and the political agenda of the Commission, with considerable implications for the integration process. Besides the theoretical contribution, the paper also provides first empirical evidence on how the preferences and strategies of the Commission have evolved across the six long-term budgets of the EU. These insights might prove valuable in understanding better the adoption of new financial instruments in the wake of the Covid-19 pandemic. Not only a sudden crisis, but a process of adaptation and repositioning, unfolding over time, might explain how the Commission played its role in EU budget politics.
