IDEAS home Printed from https://ideas.repec.org/p/wii/rpaper/rr317.html
   My bibliography  Save this paper

Scenarios for the Financial Redistribution across Member States in the European Union in 2007-2013

Author

Listed:
  • Sandor Richter

    () (The Vienna Institute for International Economic Studies, wiiw)

Abstract

The order and modalities of cross-member state redistribution as well as the net financial position of the member states are one of the most widely discussed aspects of European integration. The paper addresses selected issues in the current debate on the EU budget for the period 2007 to 2013 and introduces five scenarios. The first is identical to the European Commission's proposal; the second is based on reducing the budget to 1% of the EU's GNI as proposed by the six major net-payer countries while maintaining the expenditure structure of the Commission's proposal; the third is 'halfway' between the first and the second scenarios. The next two scenarios represent radical reforms the fourth scenario also features a '1% EU GNI'; however, the expenditures for providing 'EU-wide value added' are left unchanged and it is envisaged that the requisite cuts will be made in the expenditures earmarked for cohesion. The fifth scenario is different from the fourth in that the cohesion-related expenditures are left unchanged and the expenditures for providing 'EU-wide value-added' are reduced. After the comparison of the five scenarios, we analyse the allocation of transfers to the new member states in terms of the conditions prevailing in the different scenarios. The impact on demand and on external and fiscal balances are discussed. Next, characteristic features of the position of Austria, Germany, Hungary, Poland and Slovenia vis-à-vis the European Commission's proposal for the 2007-2013 financial perspectives are addressed. Then the new member states' first experiences with the absorption of EU transfers are reviewed. Finally, the global impact of a success or failure of redistribution across member states in the European Union is analysed.

Suggested Citation

  • Sandor Richter, 2005. "Scenarios for the Financial Redistribution across Member States in the European Union in 2007-2013," wiiw Research Reports 317, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:rpaper:rr:317
    as

    Download full text from publisher

    File URL: https://wiiw.ac.at/scenarios-for-the-financial-redistribution-across-member-states-in-the-european-union-in-2007-2013-dlp-327.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Falcetti, Elisabetta & Lysenko, Tatiana & Sanfey, Peter, 2006. "Reforms and growth in transition: Re-examining the evidence," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 421-445, September.
    2. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    3. Falcetti, Elisabetta & Raiser, Martin & Sanfey, Peter, 2002. "Defying the Odds: Initial Conditions, Reforms, and Growth in the First Decade of Transition," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 229-250, June.
    4. Kolodko, Grzegorz W., 2000. "From Shock to Therapy: The Political Economy of Postsocialist Transformation," OUP Catalogue, Oxford University Press, number 9780198297437.
    5. Rainer Schweickert & Inna Melnykovska & Ansgar Belke & Ingo Bordon, 2011. "Prospective NATO or EU membership and institutional change in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(4), pages 667-692, October.
    6. Nauro F. Campos & Abrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 793-836, September.
    7. Roxana Radulescu & David Barlow, 2002. "The relationship between policies and growth in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(3), pages 719-745, November.
    8. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    9. Kazimierz Laski & Roman Römisch, 2003. "From Accession to Cohesion: Ireland, Greece, Portugal and Spain and Lessons for the Next Accession," wiiw Research Reports 298, The Vienna Institute for International Economic Studies, wiiw.
    10. Bhagwati, Jagdish N, 1982. "Directly Unproductive, Profit-seeking (DUP) Activities," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 988-1002, October.
    11. Eicher, Theo S. & Schreiber, Till, 2010. "Structural policies and growth: Time series evidence from a natural experiment," Journal of Development Economics, Elsevier, vol. 91(1), pages 169-179, January.
    12. Gérard Roland & Thierry Verdier, 1999. "Transition and the output fall," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(1), pages 1-28, March.
    13. Leon Podkaminer, 1995. "Household Behavior under “Austerity” Stabilization of Hyperinflation: The Roots of Fragility," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 17(4), pages 593-605, July.
    14. Ratna Sahay & Jeronimo Zettelmeyer & Eduardo Borensztein & Andrew Berg, 1999. "The Evolution of Output in Transition Economies; Explaining the Differences," IMF Working Papers 99/73, International Monetary Fund.
    15. Daron Acemoglu & Simon Johnson & James Robinson, 2004. "Institutions as the Fundamental Cause of Long-Run Growth," NBER Working Papers 10481, National Bureau of Economic Research, Inc.
    16. International Monetary Fund, 1998. "Recovery and Growth in Transition Economies 1990–97; A Stylized Regression Analysis," IMF Working Papers 98/141, International Monetary Fund.
    17. Leon Podkaminer, 1998. "Inflationary Effects of High Nominal Interest Rates," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 20(4), pages 583-596, July.
    18. Angela Cheptea, 2007. "Trade liberalization and institutional reforms," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15(2), pages 211-255, April.
    19. Kazimierz Laski & Leon Podkaminer, 2012. "The basic paradigms of EU economic policy-making need to be changed," Cambridge Journal of Economics, Oxford University Press, vol. 36(1), pages 253-270.
    20. John Bennett & Saul Estrin & Giovanni Urga, 2007. "Methods of privatization and economic growth in transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15, pages 661-683, October.
    21. Leon Podkaminer, 2010. "Real Convergence And Price Levels: Long-Term Tendencies Versus Short-Term Performance In The Enlarged European Union," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 640-664, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    European integration; EU; redistribution across member states; scenarios; cohesion; competitiveness; budgetary reforms; EU financial perspective; EU budget; own resources and expenditures; net financial position;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other
    • H49 - Public Economics - - Publicly Provided Goods - - - Other
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wii:rpaper:rr:317. 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: (Customer service). General contact details of provider: http://edirc.repec.org/data/wiiwwat.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.