Enhancing Fiscal Transparency through Participatory Budgeting in the EU - Related Opinions

The need for open and transparent budgetary processes has never been more critical. The multiannual financial framework (MFF) emerges as a crucial tool for aligning financial resources with the Union's long-term priorities. The EESC has highlighted significant gaps in the current MFF, including its limited scope in addressing contemporary challenges such as Europe's aging population and strained budgets due to inflation.

The EESC therefore explores a paradigm shift towards Open budgets in the EU –a framework that encompasses not only participatory budgeting but a broader spectrum of fiscal transparency and citizen engagement across all stages of the budget cycle. This approach is aimed at enhancing the responsiveness and effectiveness of EU budget allocations, thereby fostering a more resilient, inclusive, and democratic European economy.

The EESC has issued key recommendations for the mid-term revision of the Multiannual Financial Framework (MFF) 2021-2027. The Committee calls for a prompt agreement on the MFF revision still this year, to guarantee continued financial backing of Ukraine and financing the EU´s evolving political priorities. However, the EESC criticizes the proposed changes as being too limited and lacking ambition, resembling mere patches. It advocates for long-term strategies centred on fiscal sustainability, efficient resource allocation, and measures to guard against unexpected events. Civil society should be engaged for effective planning and monitoring of MFF programmes.

The EESC emphasises that the designing of proposals for new sources of own revenues should be done in context of the budgetary pressures faced by Member States following the pandemic and the ongoing international tensions. This has become all the more important in the current higher interest rate environment. The EESC also emphasises that the second set of own resources measures should be in line with the proportionality and social fairness principles. An EU-wide tax on digital transactions could be potentially considered to increase own resources in case the agreed rules of the OECD/G20 Inclusive Framework are not respected by other major trading partners.