Haushalts- und Steuerpolitik in der EU / Budget and Tax Policy in the EU

Public finances in Europe are relevant both with respect to their fiscal and their possible integration- promoting function. However, decisions on the expenditures and revenues of the European Community create a permanent potential of conflicts between the EU countries. Furthermore, with the Maastricht Treaty, additional restrictions for national budgetary policies have come into existence. If the present structure of EU expenditures is measured by the criteria of welfare economics as well as of the Public Choice School, it would be desirable to transfer most EU responsibilities back to the national level. Instead, the EU should concentrate on the provision of EU-wide public goods and on the internalisation of border-crossing external effects. Contrary to this, the existing revenue system of the EU - representing de facto a system of fiscal contributions from the member countries - seems to be quite appropriate also for the foreseeable future both from a welfare economic and from a politico-economic point of view. Also in the field of taxation, a regulated tax competition should be preferred to a far-reaching tax harmonisation. This applies particularly taking into consideration the changed framework of incentives created by the European Economic and Monetary Union created in 1999.