The EU Budget Dispute - A Blessing in Disguise?
AbstractThis paper analyses the European budget and the net position of the ten new member states. We argue that the EU budget should be reconsidered, as the Union has expanded to 25 member states and has become more heterogeneous. We demonstrate how the ten new members fared with respect to the budgetary plans outlined in the budget proposal approved at the 2002 summit at Copenhagen. We show that, in 2004, the new member states failed to qualify for the whole planned budget within the agricultural policy and the structural funds. On the other hand, they qualified for more than planned from a set of internal policy programmes and also from compensation transfers. We discuss the financial outlook for 2007Ã¢â‚¬â€œ2013 and its recent developments. We argue that for the EU budget to support economic growth, the priorities must be re-oriented towards potentially productive spending programmes, and spending on oldfashioned programmes, such as the Common Agricultural Policy, should be scaled down or possibly re-nationalised. We show, however, that it is exactly these programmes that remained unchanged in the final negotiations for the 2007Ã¢â‚¬â€œ2013 perspective. A simple economic growth model illustrates that the current EU budget setting is, at best, neutral with respect to the EUwide 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.
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Bibliographic InfoPaper provided by Czech National Bank, Research Department in its series Research and Policy Notes with number 2006/01.
Date of creation: Dec 2006
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Budget; European Union; growth.;
Other versions of this item:
- Ondrej Schneider, 2007. "The EU Budget Dispute – A Blessing in Disguise?," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 57(7-8), pages 304-323, September.
- Ondrej Schneider, 2007. "The EU Budget Dispute – A Blessing in Disguise?," CESifo Working Paper Series 1986, CESifo Group Munich.
- Ondřej Schneider, 2007. "The EU Budget Dispute - A Blessing in Disguise?," Working Papers IES 2007/14, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2007.
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-19 (All new papers)
- NEP-EEC-2007-05-19 (European Economics)
- NEP-MAC-2007-05-19 (Macroeconomics)
- NEP-PBE-2007-05-19 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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