The deal on the Multiannual Financial Framework 2014-2020, which will regulate the EU’s annual budget, is a missed opportunity. As in the past, the EU was captive to agonising negotiations in two separate European Councils for just a handful of money. The process clearly indicates that the EU budget is still perceived as an entitlement budget, from which each national government tries to extract the highest possible return. Read more
Bruegel blog
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Same old Europe
14th February 2013
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How to read the EU budget deal? II
13th February 2013
Structural and Cohesion Funds, if properly used, can represent an important instrument for economic growth. The European Council conclusions of 8 February 2013 include the decision to impose a capping to the maximum amount of Structural and Cohesion Funds each member state can receive per year. The capping is set at 2.35 percent of GDP or 2.59 percent if average real growth over 2008-2010 was lower than - 1 percent. Read more
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How to read the EU budget deal? I
12th February 2013
Now that the European Council has approved the MFF 2014-2020 commentators are indulging on an evaluation of “who wins, who losses”, whether at stake are policy objectives or countries. The variety of opinions is disorienting at best. Read more
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How to read the EU budget deal?
8th February 2013
The approval of the Multiannual Financial Framework (MFF) 2014-2020 was preceded by the usual agonizing negotiations, but a deal was eventually struck at the European Council of 8 February 2013. The latest deal is much lower than the European Commission’s proposal. Commitments go from 1033bn euros (1.08% of EU GNI) down to 960 bn euros (1% of EU GNI). Payments, which what is going to be truly disbursed over the next seven years, go down to 908.5bn from 988bn euros in the EC proposal. Compared with the MFF 2007-2013 it is reduction in the size of the budget in the order of 0.12% of EU GNI. Read more
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„Flexibilität geht vor Größe“
30th January 2013
Interview mit Bruegel-Forscherin Benedicta Marzinotto über das künftige EU-Rahmenbudget. Read more
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The euro area’s need for stabilization in historical perspective
19th December 2012
It is not unusual that some European countries register strong growth rates and others less so. Yet, significant divergence in output is historically associated with dramatic events (or crises). This implies that a euro area budget used for stabilization will end up being activated only a few times. Moreover, there is no historical record of core Europe marching above and the periphery below potential. This makes it unrealistic to conceive of a euro area budget that transfers resources on the spot from badly hit to just moderately hit countries. Some institutional engineering would be necessary. Read more
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Europe’s Dysfunctional Growth Compact
29th November 2012
Recently, a €10 billion ($13 billion) shortfall in this year’s European Union budget came to light. As a result, the EU cannot reimburse member states for recent unexpected expenditures, including emergency outlays, such as aid to Italian earthquake victims, and spending aimed at boosting economic growth and employment, such as the accelerated absorption of unused Structural and Cohesion Funds. Member states have refused the European Commission’s request for extra contributions to cover the shortfall, causing talks over next year’s budget to collapse. Meanwhile, negotiations over the 2014-2020 Multiannual Financial Framework (MFF), the central-planning instrument for the use of EU funds, have broken down, owing to disagreement over key issues, including the size of the budget and the composition of expenditure.… Read more
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Chart of the week: fiscal deficits in the euro area under the new forecast
8th November 2012
The 2012 Autumn Economic Forecast of the European Commission confirms the Spring Forecast expectation that several euro area countries, including France, will breach their commitment to return below a 3 percent deficit in 2013, unless they change their budget plans or the EU gives them more time to meet their commitment. However, most of these countries, including France, appear to be taking EU rules seriously as their structural balance figures have improved since the Spring Forecast. Read more
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Gli aiuti Ue e il dilemma della legittimità democratica
18th October 2012
L'entrata in vigore del Meccanismo europeo di stabilità (Esm) è un test. Ma è molto più di un test sul funzionamento di uno strumento tecnico. È un test sulla legittimità dell'Europa e delle ricette pensate in risposta alla crisi. L'Esm è il nuovo strumento permanente di gestione e risoluzione delle crisi che l'Unione si è data. Ha una capacità di prestito simile al precedente Meccanismo europeo di stabilizzazione finanziaria, che era però uno strumento emergenziale. L'Esm può essere utilizzato sia per sostenere il settore pubblico sia per ricapitalizzare il sistema bancario. Invece, la ricapitalizzazione diretta delle banche, desiderabile perché evita allo Stato di mettere gli aiuti a bilancio, sarà possibile solo quando la supervisione bancaria sarà passata alla Bce.I Paesi… Read more
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EU Cohesion spending: policy can deliver what economic research cannot
11th October 2012
The EU uses about one third of the EU Budget for cohesion policy. Those that are now fighting for a smaller EU Budget are also questioning the importance of Structural and Cohesion Funds and the extent to which they are truly growth-generating (and welfare-improving). The criticism is not unwarranted. For example, the empirical literature that has attempted to measure the growth effects of these funds is rather inconclusive, not least because the estimation is plagued with a number of methodological and practical problems. But macroeconomic simulations show that EU funds generate economic growth, something the empirical literature does not always pick up. This is by itself an indication of the fact that Structural and Cohesion Funds are potentially useful for… Read more