The EU Budget Dispute - A Blessing in Disguise?
This 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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- 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.
- Sandy Dall'Erba & Julie Le Gallo, 2007. "The impact of EU regional support on growth and employment," Post-Print hal-00485024, HAL.
- 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.
- 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.
- Kneller, Richard & Bleaney, Michael F. & Gemmell, Norman, 1999. "Fiscal policy and growth: evidence from OECD countries," Journal of Public Economics, Elsevier, vol. 74(2), pages 171-190, November.
- 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.
- Asea, Patrick & Mendoza, Enrique G & Milesi-Ferretti, Gian Maria, 1996. "On the Ineffectiveness of Tax Policy in Altering Long- Run Growth: Harberger's Superneutrality Conjecture," CEPR Discussion Papers 1378, C.E.P.R. Discussion Papers.
- Gleich, Holger, 2003. "Budget institutions and fiscal performance in Central and Eastern European countries," Working Paper Series 215, European Central Bank. Full references (including those not matched with items on IDEAS)
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