Reforming the Financing of the European Union: A Proposal

Fuest, Clemens; Heinemann, Friedrich; Ungerer, Martin

doi:10.1007/s10272-015-0553-z

Cited by 8 publications

(6 citation statements)

References 6 publications

(6 reference statements)

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“…There can be found number of arguments for support of the reform of the EU budget in discussions. The current design of the EU budget revenues lacks transparency, is prone to complicate adjustments and has low autonomy due to its dependence on GNI and VAT-based resources, as underlined by Sapir (2003), Le Cacheux (2005), Cipriani (2007) Fuest, Heinemann & Ungerer (2015) and Schratzenstaller et al (2016). Moreover, Richter (2006) and Cipriani (2007) express the concern that the current system of financing the EU budget does not support the European added value and does not enhance the economies of scale at the EU level.…”

Section: Introductionmentioning

confidence: 99%

Future EU Funding: A case of lump-sum tax

Dobranschi

Nerudová

Solilová

2017

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This paper is concerned with the EU financing reform, where the lump-sum tax is considered as an alternative source of revenue. The purpose of this study stems out of the current debate related to the EU budget reform, where tax-based ownresources are required to replace the current system of own resources of the EU budget. The novelty of this research arises from the evaluation of a hypothetical EU lump-sum tax as a future replacement of GNI and VAT-based EU budget own sources. The aim of this paper is to analyze the potential of a lump-sum tax as a source of future EU funding. We consider lump-sum tax as an EU per capita charge applicable to all citizens of 28 EU member states. In order to assess the lump-sum tax potential we simulate five different lump-sum tax rates and compare the obtained yield to current EU own resources. The results of the research show that a charge per capita in the EU does not have the capacity to fully replace GNI or VAT-based EU own resources. Therefore, we consider the EU per capita charge as a form of complementary source to fund the EU own budget, with no real potential to fully replace the current EU own resources.

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Section: Introductionmentioning

confidence: 99%

Future EU Funding: A case of lump-sum tax

Dobranschi

Nerudová

Solilová

2017

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“…The proposals were radical and would have produced a very different set of budgetary financing arrangements if they had been agreed. In order to achieve better value for money through public goods, Fuest et al (2015) recommend empowerment of the EP, whose interests are less particularist than those of the national governments on the Council, in budgetary expenditure. But not even they go so far as to suggest revenue based empowerment on this scale for the EP.…”

Section: Treaty Of Brussels 1975mentioning

confidence: 99%

Institutions and the route to reform of the European Union’s budget revenue, 1970–2017

Benedetto

2017

Empirica

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Using process tracing, this paper charts the history of the changes in the EU's revenue since 1970, including package deals and the unforeseen consequences of change, comparing the positions of the Council to those of the European Commission and European Parliament. Those revenue decisions allowed European integration to proceed though without a fully autonomous budget as Member States became more careful to calculate their net benefits or costs in relation to the budget. In December 2013, the European Union's institutions established a High Level Group to recommend changes to the revenue base of the EU's budget. This reported in January 2017, proposing to resolve the effect of sub-optimal revenue and budget decisions made by the European Union over many years, to reduce direct national contributions, to minimise the risk of unforeseen consequences, and to combine revenue flows with steering effects to discourage certain forms of economic behaviour in line with the wider policy agenda of the European Union.

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“…Fourthly, Begg (2011) and Fuest, Heinemann and Ungerer (2015) stress that the current EU budget system does not respect ability-to-pay measured by GNI, resulting from not adequately distributing the burden of financing the EU budget among the member states.…”

Section: Introductionmentioning

confidence: 99%

“…Thirdly, as mentioned by Fuest, Heinemann and Ungerer (2015), the current EU budget system is very complicated due to the various permanent and temporary correction mechanisms and due to the difficult method of the harmonized base calculation for VATbased own resource. Moreover, Schratzenstaller (2013), Schratzenstaller et al (2016) and European Commission (2011a-f) note that the EU system of own resources is also not transparent, which endangers political credibility and the acceptance of member states' contributions.…”

Section: Introductionmentioning

confidence: 99%