EU multi-level budgetary governance: from EU funding to strategic spending

In the emerging paradigm of “integration through funding” the budget is increasingly becoming an instrument of EU governance. In this context, cohesion policy is evolving from a funding scheme to a form of strategic spending, leading to the emergence of a new EU budgetary governance, whose key features are the multi-level nature and the conditionality regimes. The paper investigates these emerging trends in EU budgetary governance from a legal perspective, focusing on the centralisation of decision-making, the relationship between levels of government and the Union’s democratic legitimacy. First, building upon theories of multi-level governance, the paper argues that, whereas cohesion policy has traditionally favoured decentralised decision-making, the redirection and repurposing of funding as a form of EU strategic spending tends to recentre decision-making around the relationship between the EU and national executives. Second, the shift towards a more strategic use of spending has enhanced the potential of cohesion funds to serve EU enforcement and compliance purposes, yet it carries two significant accountability and legitimacy concerns: a risk of permanent executive dominance and the stretching of EU enforcement channels beyond the power allocation of the Treaties.