The Deadlock of the EU Budget: An Economic Analysis of Ways In and Ways Out
Most of the EU budget is spent on redistribution. Large sums of money are transferred from the member state governments to Brussels and back to these governments. Some member states end up as net receivers and some as net payers. Most economists agree that the resources of the budget should be reallocated from redistribution towards the provision of more Union-wide public goods. While such appeals have been made for years, little change has been observed. We want to explain why. We propose to distinguish two periods. In the early years of the Community, some larger member states or coalitions of member states were able to credibly threaten to terminate membership if their claims on budgetary resources were not fulfilled. Their activity has created a redistributive status quo to which, in the second period, the budgetary rules of the Treaty were applied. It is shown that the combination of the Council’s qualified majority rule on the expenditure side and the unanimity rule on the revenue side and on the programs are largely responsible for creating a deadlock in the status quo with large redistribution and few Union-wide public goods. In order to break the deadlock, a complementary budget procedure is proposed on the basis of voting by veto.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: Poschingerstrasse 5, 81679 Munich|
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
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.:
- Widgren, Mika, 1991.
"Voting Power in the EC Decision Making and the Consequencesof two Different Enlargements,"
377, The Research Institute of the Finnish Economy.
- Widgren, Mika, 1994. "Voting power in the EC decision making and the consequences of two different enlargements," European Economic Review, Elsevier, vol. 38(5), pages 1153-1170, May.
- Tapio Raunio & Matti Wiberg, 1998. "Winners and Losers in the Council: Voting Power Consequences of EU Enlargements," Journal of Common Market Studies, Wiley Blackwell, vol. 36(4), pages 549-562, December.
- Guido Tabellini, 2003.
"Principles of Policymaking in the European Union: An Economic Perspective,"
CESifo Economic Studies,
CESifo, vol. 49(1), pages 75-102.
- Guido Tabellini, 2003. "Principles of Policymaking in the European Union: an Economic Perspective," Levine's Working Paper Archive 506439000000000157, David K. Levine.
- Mueller, Dennis C., 1978. "Voting by veto," Journal of Public Economics, Elsevier, vol. 10(1), pages 57-75, August.
- Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR;CES;MSH, vol. 12(24), pages 125-176, 04.
- Buchanan James M. & Lee Dwight R., 1994. "On A Fiscal Constitution For The European Union," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 5(2-3), pages 14, June.
When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_989. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe)
If references are entirely missing, you can add them using this form.