The EU declares to provide support for the rural and poor regions of its member states. However, recent research shows that past EU budget allocations (in EU-15) can largely be explained by measures of the distribution of voting power in the Council of Ministers deciding on the bulk of EU spending. Yet, empirical analysis also indicates that the needs of the member states play a role in the determination of their receipts from the EU budget. As a rough estimate, power explains 60% of the budget allocation and, when stable coalition structures among member countries are allowed, even 90%. In this paper we use such estimates to predict EU budget shares after the eastern enlargement. We compare incumbent member states' predicted budget receipts before and after eastern enlargement, and examine the impact of different voting rule proposals on predicted budget shares and receipts in EU-25. According to our estimates, eastern enlargement has large effects on the budget receipts of the incumbent member states. Moreover, whether the voting rules are based on the Nice Treaty (NT) or the Constitutional Treaty (CT) makes a difference for most member states. Many member states would be worse off under CT than under NT. In relative terms, Germany would be the biggest winner under CT, because under CT population counts more on power than under NT voting rules.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
5134.
Find related papers by JEL classification: C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
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