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The EU’s hidden subsidy

Posted by Richard Tuesday, November 30, 2004

Up for the first time on the EU commission’s website last night is a "clarion call for the public to help compose themes for future EU research".

This is the launch of a public consultation "to allow the various stakeholders to shape the forthcoming Seventh Framework Programme (FP7), by suggesting thematic domains for future research."

It is also the start of a mad dash by academia for a pile of gold, as they rush to frame outline proposals that will eventually fill its coffers with euros from a research fund that will be pump-primed by the commission to the tune of €35 billion of taxpayers’ money over the five years starting in 2007.

However, while the rush for Euro-gold gathers place, few people even begin to realise that this programme (with double the FP6’s €17.5 billion budget) represents a massive hidden subsidy for the European Union, adding substantially to its declared official income.

Some clue of this can be gleaned from the stated requirements for the research programme, given by the commission. In order of priority, projects must as contribute to EU policy objectives; foster the European research potential; and generate "European added value".

The first of the requirements actually gives the game away, in that the primary purpose of the programme is developing or supporting EU policies. And it is in this area that academia provides enormous support to the commission, carrying our research programmes which support the need for legislation, developing detailed models for its legislation and, sometimes, even preparing draft legislative proposals for it.

It is this which party explains how the commission manages to run such an enormous legislative programme, and produce such a huge volume of technical reports to back it up.

Despite constant claims by the likes of Richard Corbett MEP, who even in his latest arguments for the constitution, makes the claim that the EU cannot be a "superstate" because the Commission has fewer employees than Leeds City Council (which we addressed in one of our "myths") , if you really think about it, an organisation that size could not actually deliver the amount of paperwork it does.

And, of course, it does not. It out-sources the work, and has thousands of willing academics ready and waiting to take the EU’s euros, in return for producing its new laws.

But the really interesting bit is in the third requirement, the need for projects to generate "European added value". The commission website elaborates on this, stating that there must be "a strong need for additional public funding and for such intervention to be at a European level."

The programme, in any event, is what is known as "co-funded" which means that the commission generally pays only a proportion of the costs of each project – typically 50 percent, which means the rest must be found by the applicant. If an academic institution applies, this is very often taxpayers money from the member states. But what the commission is also saying is that the more "co-funding" a project attracts, the more likely it is to get EU money.

On that basis, at the very least, by putting in €35 billion of our money into the pot, the commission stands to gain at the very least a similar amount directly from member state taxpayers, without it being declared in the EU budget – and it gets a great deal of (to it) useful work into the bargain.

This is one of the many ways by which the EU manages to extend its own disposable income, so that the real expenditure under the control of the commission is vastly greater than the €100 billion or so that appears on the bottom line of the publicly declared budget – all of which means that, in addition to our annual "contributions", we are paying a massive hidden subsidy to the EU.