In my @FT column this week, I urge European leaders to treat the next seven-year EU budget as a policy tool and a matter of statecraft. That means shifting the discussion from the funding side - who pays what - to the spending side - what is it for? I offer some proposals.
First, Europe is still far too disconnected physically (which includes digitally). The single market relies on transactions being as close to zero as possible regardless of where in Europe you are. And its biggest domestic political problem is rooted in regional divergence...
...*within* almost all its nation-states. So much more investment on all sorts of connecting infrastructure could both consolidate the single market and address the grievances of left-behind regions.
Second, there are huge returns on subsidising research and development in areas aligned to European political values and goals. Climate-friendly energy is one, and overlaps with the first area (connective infrastructure). Privacy-friendly digital technology is another.
Third, if China with its Belt and Road can have as its ambition to shape the economic geography of (at least eastern and southern) Europe, and thereby of course its political geography, then surely so can Europe itself! Especially as Chinese promises of investment have so far...
... been disappointingly small. In other words a little spending on an agenda of how Europe's eastern-southeastern economic geography should look, and projecting such an agenda onto the broader Eurasian economic space, can achieve a lot. (Again, overlaps with the first point.)
Fourth, putting more money behind refugee and asylum settlement would at least smooth the path to more agreement in that area.
Finally, a much punchier level of investment spending along these lines would have a much stronger effect in terms of macroeconomic stabilisation than the new eurozone budget will have. Mr Macron and other advocates of EZ stabilisation function should take note.
In national politics, democratic politicians know very well that budgets are their most powerful tool to shape the trajectory of a country, and build political allegiance for their preferred course. It is time they start to treat the EU budget in the same way. /ends