Comments by Iain Begg on the CEPS paper brief "A New Budget for the European Union?"

Contribution of Iain Begg to the on-line debate organised by Notre Europe on the CEPS policy brief "A new budget for the European Union?" by Alfonso Iozzo, Stefano Micossi and Maria Teresa Salvemini


While it is true that the juste retour mentality that has increasingly pervaded budget negotiations since the last major reform twenty years ago has many regrettable characteristics, it will never be easy to arrive at a package of EU spending that escapes this particular curse. The Iozzo, Micossi and Salvemini paper is, therefore, a welcome attempt to find a new approach. It is one of a number of recent contributions to the budget debate that has sought to distinguish more explicitly between the public good and distributive elements of the budget. In essence the proposal boils down to saying that the budget should be split, with public goods funded by authentic EU resources, while net transfers between Member States are financed by GNI-based contributions. It sounds alluring, but would have to confront a number of difficulties. Conceptually, to begin with, the first "chapter" of spending in the proposal is a form of equalisation in which the transfers are embedded in selected policies, rather than being pure cash transfers as found in some federal countries. Good examples of the latter are the finanzausgleich mechanisms in Austria and Germany...