Authors: Ioannis Ragies

Title: EU Defence Expenditure: COFOG Methodology re-Examined in an Era of Wider Security.

Abstract

The paper emphasizes the public debate, cantered, on the one side, Peace- Dividend and the associated economic benefits of a decrease in defence spending of many EU nations, after the end of CW, and, on the other, the emergence of new asymmetric security challenges, risks and threats to ‘homeland security’ of EU states. However, this public debate, in spite of a significant academic research and defence – security policy developments, has not touched upon the issue of ‘defence’, ‘military’, ‘war’ spending, thus, maintaining ‘gaps’ between ‘reality’ and ‘policy’. Main target is to demonstrate that, in current security environment, multi-purpose Government functions / expenditure have well emerged, requiring a new policy approach, as well as a new, modern, effective, democratic and highly accountable, methodology to government expenditure on the ‘wider security’ of EU and its citizens. The Classification of the functions of government/ COFOG was developed by OECD (1999) and published by the UN Statistical Division as a standard tool for classifying the purposes of government activities. The classification has three levels of detail: a) divisions b) groups c) classes. Divisions describe the broad objectives of government, while groups and classes both define the means by which these broad objectives are achieved. COFOG classifies government expenditure into ten main categories (divisions known as 'COFOG I level' breakdown). These divisions are further broken down into 'groups' (COFOG II level). The paper aims to: 1) ‘re-define’ current defence expenditures in EU 2) propose the reform of (pure) ‘internal security’ budget levels 3) propose the ‘re-allocation’ of current (pure) defence/ military funding to other Divisions 4) attempt to terminate current duplication, ineffectiveness and lack of accountability. Methodologically, it will: 1) analyse current regional security environment, as it influences EU internal and external security 2) underlines the importance for EU defence expenditure of main EU defence and security- related Initiatives and policies 3) argue that total EU action related to defence and security is, gradually, converging 4) demonstrate that for EU policies timely and complete statistics are necessary, based on a common methodology 5) show that policy makers increasingly need to assess all types of security- related expenditure 6) assess current structure, user requirements, analytical framework and methodological guidance 7) review and assess current COFOG classification  8) transform / update all existing Sub-items /groups/ classes 9) design a new inclusive Main Category/ Division, ‘’Security’’ -according to COFOG.