Business Opportunities under the European Union Budgetary Framework 2014-2020

Francisco A. Laguna & Wojciech Kornacki 

Janusz Lewandowski, European Union (“EU”) Financial Programming and Budget Commissioner, forecast that the EU’s new 2014 – 2020 budget would result in 6 years of growth.  The goal of the Commission is to transform the EU into a “knowledge-intensive, low-carbon, and highly competitive economy” supported by flexible energy, transport and infrastructure networks.  The budgetary framework of € 959 billion presents ample opportunities for both EU and non-EU businesses.

Screen shot 2013-10-16 at 3.19.59 PM

The EU consists of 28 countries.  Its economy, measured by Gross Domestic Product (“GDP”), is currently bigger than that of the United States (“US”). The US economy is estimated at $15.4 trillion (2012), while the EU economy is estimated at around $17.3 trillion, after conversion, placing it as the world’s largest economy.

The population of the EU is approximately 503,000,000: about 7% of the global population.  The EU generates ~ 20% of global trade.  It is responsible for 16.4% of world imports and 15.4% of all exports.  In comparison, the US accounts for 15.5% of all imports and 13.4% of all global exports (2011).  The last few years have slowed down all major economies, including the EU’s.  While many observers are quick to point out that the EU economy grew by only 0.4 % in 2012, growth was primarily affected by Greece, where the GDP growth dropped by 5%.

The table below contrasts the EU, US and Chinese markets.

European Union United States of America People’s Republic of China
Population 503,000,000 316,000,000 1,349,585,838
Economy Size $17.3 trillion (converted) $15.4 trillion $12.6 trillion
Growth in 2012 0.4% 2.2% 7.8%
Inflation in 2012 1.6% 2.0% 2.6%

Every 7 years, the EU re-sets its own spending goals and re-focuses its budgetary priorities.  This is why the budget of almost €960 billion for the next 6 years will have significant consequences for its 28 member States and the rest of the world, including your business or private organization.

The European Central Bank

The European Central Bank

Job creation is a primary focus of the 2014-2020 budget.  The EU plans to have 75% of its workforce gainfully employed by 2020.  It also plans on spending significant amounts in States that recently joined the EU in Central and Eastern Europe, otherwise known as the cohesion policy.  The EU also prioritized spending on carbon-neutral technologies and investment in education.  By 2020, the EU intends on spending 3% of its budget on research and development (“R&D”).  Specific details are yet to be agreed upon among the member States; however, the following spending roadmap emerges: (1) job creation; (2) R&D; (3) communications; (4) transportation; (5) energy independence; and (6) infrastructure.

If you are seeking to expand your business into the EU and your business specializes in some of the industries which the 2014 – 2020 EU budgetary framework prioritizes, contact TransLegal.  We will advise you on how to identify specific EU spending areas and EU regulatory framework, and how to benefit from them.  We will also advise you on the EU regions most advantageous for you to invest in, infrastructure and transportation, pools of customers, and workforce, among others.

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