Bigger, better funded and focused on public goods... 107 Figure – Headings 1-7 of the 2021-2027 MFF by categorisation of expenditure (p.25) Chapter 3 states that the introduction of new revenue collection mechanisms (new ‘own resources’) or an increase in contributions based on Member States’ gross national income is irrelevant to the total amount collected, but affects the amount each country contributes. However, it points out that the introduction of new revenue mechanisms can help achieve the EU's policy objectives and counteract the net balance calculations that dominate budget debates. Source: Bruegel which the authors consider do not contribute directly to food security, but rather constitute political preferences. They conclude that the CAP continues to reflect national sectoral support rather than the provision of public goods at EU level. On the other hand, they consider that environmental objectives (e.g. ecological schemes) and programmes such as Environment and Climate Action (LIFE) are in line with the principles of the EPGs, as they address global challenges such as biodiversity and climate change. The European Maritime and Fisheries Fund addresses negative externalities such as overfishing, which is also an EPG. However, these EPG components represent a minority of the total. They propose increasing it to 1.7% of GNI if 0.3% of current non-EPG-related expenditure, namely agricultural subsidies, is transferred to the national level. In other words, the CAP should continue to be defined at EU level, but the financing of its non-EPG components should be transferred to the national budgets. If the transfer of nonpublic expenditure to the national level proves politically impossible, the size of the MFF should be increased to 2% of GNI in order to take account of additional expenditure needs that would be better implemented at EU level. It also analyses current sources of revenue and proposals put forward by the European Commission, the European Parliament and academia, highlighting persistent anomalies in the rebate system that distort the fairness of contributions to the EU budget. It puts forward proposals, including a tax on defence spending shortfalls, to encourage more equitable contributions to European security from countries that currently spend less on defence, and the integration of agriculture into the EU Emissions Trading System (ETS) to accelerate the decarbonisation of the sector while generating additional budget revenue. Chapter 4 looks at how to improve the effectiveness of EU spending by reforming the budgetary method. It supports the ideas put forward by the European Commission in February 2025 to apply a performance framework to funds managed by EU countries and to centralise competitiveness and foreign policy instruments. It considers, however, that the current performance frameworks, particularly in the context of the Recovery and Resilience Facility, cohesion policy and the CAP, are not sufficient to meet the needs, as they do not include clear performance indicators, transparent evaluation processes and comparability of national plans.
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