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The EU Budget Dispute – A Blessing in Disguise?

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  • Ondrej Schneider

Abstract

This paper analyses the European budget and the position of the ten new member states. We argue that the EU budget should be reconsidered, as the Union has expanded to 27 member states and has become more heterogeneous. The budget priorities must be re-oriented towards potentially productive spending programmes. A simple economic growth model illustrates that the current EU budget setting is, at best, neutral with respect to the EU-wide long-term growth potential and may actually hamper growth in the majority of the EU countries if the distortionary nature of taxation is taken into account.

Suggested Citation

  • Ondrej Schneider, 2007. "The EU Budget Dispute – A Blessing in Disguise?," CESifo Working Paper Series 1986, CESifo.
    • Handle: RePEc:ces:ceswps:_1986
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp1986.pdf
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    References listed on IDEAS

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    1. Sandy Dall’erba & Julie Le Gallo, 2007. "The Impact of EU Regional Support on Growth and Employment," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 57(7-8), pages 324-340, September.
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    3. Ondrej Schneider & Jan Zapal, 2006. "Fiscal Policy in New EU Member States: Go East, Prudent Man!," Post-Communist Economies, Taylor & Francis Journals, vol. 18(2), pages 139-166.
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    6. Mendoza, Enrique G. & Milesi-Ferretti, Gian Maria & Asea, Patrick, 1997. "On the ineffectiveness of tax policy in altering long-run growth: Harberger's superneutrality conjecture," Journal of Public Economics, Elsevier, vol. 66(1), pages 99-126, October.
    7. Gleich, Holger, 2003. "Budget institutions and fiscal performance in Central and Eastern European countries," Working Paper Series 215, European Central Bank.
    8. Urlik Butzow Mogensen & Patrick Lenain & Vicente Royuela-Mora, 2004. "The Lisbon Strategy at Midterm: Expectations and Reality," CASE Network Reports 0058, CASE-Center for Social and Economic Research.
    9. Jacques Pelkmans & Jean-Pierre Casey, 2004. "Can Europe Deliver Growth? The Sapir Report and Beyond," Bruges European Economic Policy Briefings 6, European Economic Studies Department, College of Europe.
    10. Martin Hallet, 2004. "Fiscal effects of accession in the new Member States," European Economy - Economic Papers 2008 - 2015 203, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    Cited by:

    1. Ionela POPA & Dorina LUTA & Diana CODREANU, 2012. "Romania and the European Union budget, the integration costs and benefits," Anale. Seria Stiinte Economice. Timisoara, Faculty of Economics, Tibiscus University in Timisoara, vol. 0, pages 368-372, May.
    2. van der Hoek, M. Peter, 2011. "European Union Finances," MPRA Paper 89953, University Library of Munich, Germany, revised 2011.
    3. Hofreither, Markus F., 2007. "EU-Haushaltsreform und Agrarbudget - nationale Kofinanzierung als Lösungsansatz?," Discussion Papers DP-30-2007, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.

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    More about this item

    Keywords

    budget; European Union; growth;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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