Authors Iain Begg | Gabriel GlÃ¶ckler | Anke Hassel ... - The Europaeum

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ensure that a ceiling is put on the net contributions of certain member states. The second is that the “own resources” of the EU budget are not at all own resources but require the agreement of member states which transfer gross contributions to the Union. The system of budgetary rebates began with the agreement to reduce the contribution of the United Kingdom, because that country benefits only marginally from the main spending instruments of the budget, namely the CAP and cohesion spending, and, at the time of the decision to grant the rebate, the United Kingdom was one of the poorer member states. Later Germany, Austria, the Netherlands and Sweden were given rebates on their contributions to the British rebate. In addition the UK rebate was not applied to most spending on enlargement countries when they joined in 2004. This lack of transparency in the budget is added to by its use to make side payments to countries in order to get them to agree to policy innovation or additional budgetary resources. The result is an incomprehensible and ill-justified mess, which cannot be explained simply to normally intelligent EU citizens. The argument on providing the Union with real “own resources” (“an EU tax” in Eurosceptic language) is that this would make the budgetary process more democratic, because the Council and above all the Parliament would be held directly responsible by the voters for the use made of EU budget resources. This would mean that both institutions would become more responsible and some of the silly spending would be eliminated, with a consequent rise in the efficiency of EU public spending. How might the EU budget be reformed? The criticism of the EU budgetary process is well-founded. However as usual identifying weakness is easier than curing it. What steps are necessary to reach a budget fit for purpose in an EU fit for purpose? Net budget balances There is general agreement that one of the fundamental problems is the question of net budget balances. Clearly one of the first changes which could be made is to create a gross contribution system, which would eliminate this sort of calculation, and the very complex system of budget rebates. The Commission made a proposal for a system of generalised budgetary compensation during the negotiations of the last financial perspective. This would have set a cap on the net contributions of individual member states; when the level of deficit exceeded 0.35% of GNI, the net contributor 70 After the crisis: A new socio-economic settlement for the EU
would have received a rebate of two thirds of the excess above this level, the cost being spread across all member states. The proposal was not however adopted by the Council. Other proposals have been made which attempt to remedy some of the lacunae in the Commission scheme. A proposal by de la Fuente et al. suggests linking net balances rigourously to prosperity. 2 This would have the advantage of separating budgetary proposals from distribution issues. It would mean that all member states’ transfers to the Union budget would be increased by a decision to spend additional funds, so that it would attack not only the problem with excessive deficits but also excessive receipts. Such a scheme should make it easier to make a radical assessment of EU policies which have a budgetary impact and where desired to make changes. Under such a system a sharp reduction in expenditure on the CAP would not have an excessively negative effect on the budgetary situation of those countries which benefit from this policy. The problem with such a proposed radical change is mainly the practical problem of its negotiation. The move to a fairer system, which would allow significant changes on the expenditure side of the budget would mean that some countries would be faced with considerable increases in net contributions; in the case of the “de la Fuente” system for instance, if the same level of redistribution was maintained as at present, Ireland would be a major loser, as would Greece, the UK and several of the new member states, while the big winners would be Italy, Germany and France. And of course any change would have to be supported unanimously. The system might also not appeal to the European Commission and Parliament, which might find it more difficult to persuade the member states to accept the financing of EU wide programmes. The problem of policy being partly driven by net budget balances must be tackled in the longer term: and the solution like that proposed by de la Fuente et al. is certainly worthy of further work. However at present there seems to be no enthusiasm in the Union to consider such fundamental reform in the short-term. The problem which led to the introduction of budget rebates in the Union was the very large expenditure on the Common Agricultural Policy; in other words it was a problem on the expenditure side of the budget. An easier route to reform, though a far less satisfactory solution, might be to tackle a reform of EU expenditure. Chapter 4 – Alan Mayhew 71
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Authors Iain Begg | Gabriel Glöckl
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Published in 2009 by Policy Network
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4 After the crisis: A new socio-eco
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6 After the crisis: A new socio-eco
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Simona Milio is associate director
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Chapter 10 Simona Milio ...........
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Before the crash: the EU as a parti
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liberalisation. The City of London
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of the Financial Services Action Pl
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confidence and world trade, to whic
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Page 24 and 25: signals are in place to promote a n
Page 26 and 27: need to be constructed to create ac
Page 28 and 29: or indeed re-impose, what they rega
Page 30 and 31: Markets with rules The overall conc
Page 32 and 33: 30 After the crisis: A new socio-ec
Page 34 and 35: Target financial stability The EMU
Page 36 and 37: Belgium, the Netherlands and Luxemb
Page 38 and 39: mortgage banks and the insurance se
Page 40 and 41: financial market rules. The ESFS au
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Page 44 and 45: initiatives vis-à-vis ratings agen
Page 48 and 49: Even if membership in a monetary un
Page 50 and 51: emained relatively contained to spe
Page 52 and 53: The second channel of functional sp
Page 54 and 55: But even so, the depth and intensit
Page 56 and 57: governance in the EU and the euro a
Page 58 and 59: in the EU show, authorities at the
Page 60 and 61: factors will remain prevalent and b
Page 62 and 63: centralised decision-maker. Similar
Page 66 and 67: (GNI), the interests of the member
Page 68 and 69: terms only very slowly and as a per
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Page 74 and 75: Reform of EU expenditure Spending 4
Page 76 and 77: The medium-term financial framework
Page 78 and 79: unanimity. The need to obtain the c
Page 80 and 81: therefore, was weakening the Europe
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Page 84 and 85: Since then, member states have name
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Page 88 and 89: a Treaty that not only ignores trad
Page 92 and 93: Firstly, they should include policy
Page 94 and 95: emanate from demographic trends. Ho
Page 96 and 97: Furthermore, the Lisbon agenda may
Page 98 and 99: Strengthening, if not really crafti
Page 100 and 101: incentives in the welfare schemes a
Page 102 and 103: security, yet at a lower cost than
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Page 108 and 109: in an increasingly global age the
Page 110 and 111: So what kind of social role for the
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Page 114 and 115: help by ensuring a thorough audit a
Page 116 and 117: irrespectively of benefit and costs
Page 118 and 119: to the European Innovation Scoreboa
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to cope with change is germane to a
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average job tenure figures in the E
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(74), and road vehicles (78). On th
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Towards a less dogmatic approach Wh
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128 After the crisis: A new socio-e
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will be reinforced rather than cont
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Where do we come from? The EU agend
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However, so far the flexicurity app
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existing practices of wage subsidie
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minimum wage tend to have higher pr
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commitment for employment”, 18 un
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provisions for minority protection,
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eflected in the objective of the Li
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instruments have been criticised fo
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However, the countries’ planning
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ich developed country pre-occupatio
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emerging markets (indeed the rules
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Energy and carbon use depend on fou
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concentrate on the size of the cake
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esurgence of long-term unemployment
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22 Financial Services Authority (FS
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7 This idea is not new. The 1970 We
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33 Arpaia, Alfonso, Declan Costello
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9 See Garabiol-Furet, M.-D. (2006)
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Chapter 11 1 Victor, D.G. (2006)
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Authors Iain Begg | Gabriel GlÃ¶ckler | Anke Hassel ... - The Europaeum

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