Paper Titles & Abstracts

The EU is going through a period of reflection on the future of the EU budget. This raises all manner of issues in relation to the policy orientation of the Union in a fiscal climate in which public expenditure is under severe stress. Central to this process is the possible role which so-called innovative financial instruments could have in driving forward the priorities of the EU. These instruments, in which the EU budget is combined with loans (e.g. from an international bank such as the European Investment Bank) and national public and private investment, have been seen by many in the EU as a panacea. A crucial question is can such instruments serve to leverage greater financial capacity from the EU budget and hence help serve to deliver the EU's broader policy objectives? Alongside such questions are whether there are possible trade-offs and costs in terms of governance, visibility and transparency - in short, how does the EP and citizenry gain effective oversight of instruments to which the EU budget is blended with other financial interventions? Overall, the paper adopts insight from principal-agent theory in order to explore matters of political control and offers insight into the implications of co-financing for the policy outcomes of the EU. In doing so it reflects upon arguably the most important issue confronting the Union today - the financial framework which the EU adopts could not only shape its governance and financial capability but could also transform its entire raison d'être.