Aljanka Klajnšek

LINKING EU STRATEGIC GOALS WITH NATIONAL BUDGETS

Introduction

Linking eu strategic goals with national budgets. Investigate how EU strategic goals connect with national budgets and fiscal policies (2020-2025). Analyze EU economic governance, fiscal rules reform, geopolitical shifts, and Member State planning.

Abstract

With the development of the European Union as a political community, also its public finances and fiscal policies have gradually taken shape and developed. The research focuses on the period from 2020 to 2025 and seeks to answer the question of whether and how the European Union’s economic governance system ensures that its strategic goals and priorities are reflected in the Member States’ strategic and budgetary planning, and what new developments in this respect have been brought about in 2024 and 2025 by the fiscal rules reform, the new composition of the European Parliament and the European Commission, as well as by the substantially changed geopolitical and economic situation and increased security risks. The research is based on empirical and qualitative research methods. The results of the research analysis shows that the European Union’s economic and fiscal governance system has linked its strategic goals to national budgetary and reform policies and has responded to changing circumstances through ad hoc emergency instruments such as the fiscal escape clause and the Recovery and Resilience Facility. In particular, the 2024 reform of the European Union’s fiscal rules, and changes in the geopolitical and security situation, have brought about greater flexibility and individualisation in the coordination of fiscal policy when dealing with Member States according to their characteristics. The findings of the research indicate the start of a new, broader reform of the economic governance of the European Union, which will allow sustainable adjustments of the European Union to changing geopolitical circumstances and security challenges. While the Republic of Slovenia has kept pace with the European Union’s objectives in terms of economic and fiscal governance, it has been less successful in achieving its national goals. Between 2020 and 2025, the transition from national strategic to budgetary planning in the Republic of Slovenia remained incomplete.

Review

This paper addresses a highly relevant and critical topic concerning the integration of the European Union's strategic goals with the budgetary planning of its Member States. Focusing on the turbulent period of 2020-2025, the research seeks to understand the efficacy of the EU's economic governance system in translating overarching strategic priorities into national fiscal policies. The timeliness of the study is underscored by its explicit consideration of recent developments, including the 2024 fiscal rules reform, changes in EU institutional leadership, and the profoundly altered geopolitical and economic landscape, which collectively necessitate a re-evaluation of current coordination mechanisms. The paper's ambition to explore both "whether and how" this linkage occurs provides a comprehensive scope for its inquiry. The study employs empirical and qualitative research methods to analyze the complex interplay between EU-level objectives and national implementation. The findings suggest that the EU's governance system has indeed established links between its strategic goals and national policies, demonstrating adaptability through ad hoc instruments like the fiscal escape clause and the Recovery and Resilience Facility. A significant conclusion is that the 2024 fiscal rules reform and the evolving geopolitical context have introduced greater flexibility and individualization in fiscal policy coordination, allowing for more tailored approaches to Member States. This indicates a responsive and evolving system rather than a rigid one, highlighting a dynamic process of adaptation. Crucially, the research posits the beginning of a "new, broader reform" of EU economic governance, signaling a shift towards more sustainable adjustments in response to external challenges. While the overall findings point to increased flexibility and responsiveness at the EU level, the paper also provides a specific case study of the Republic of Slovenia. It notes that while Slovenia has generally aligned with EU economic and fiscal governance objectives, it has faced difficulties in achieving its national goals, with an incomplete transition from national strategic to budgetary planning between 2020 and 2025. This particular insight adds a nuanced perspective, revealing potential disparities in the effectiveness of strategic goal translation at the national level, even within a seemingly adapting EU framework.

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