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Working Paper

A new look at net balances in the European Union’s next multiannual budget

Whenever the European Union’s budget is discussed, much of the political focus is on net balances – whether countries pay in more than they receive – rather than on the broader overall positive effects of EU spending. The largest net contributor countries have sought to limit their contributions, leading to the build-up of an ad-hoc, complex, opaque and regressive system of revenue corrections.

By: Date: December 12, 2019 Topic: Macroeconomic policy

To inform debate on the 2021-2027 EU budget, I estimated the impact on net balances of the 2018 European Commission multiannual budget proposal, under three scenarios: elimination of rebates for all of the 2021-2027 new budget period, gradual elimination of rebates and non-elimination of rebates. These estimates were done on the basis of the EU’s ‘operating budgetary balance’ indicator, and on the basis of a new and broader indicator, the ‘net direct balance’. The calculation also takes into account the estimated net contribution of the United Kingdom to the 2021-2027 EU budget based on the draft EU-UK withdrawal agreement.

Under the baseline scenario of the Commission’s proposal, those member states that currently benefit from rebates would face between 0.01 percent of GNI and 0.06 percent of GNI increases in their net contributions to the EU budget, measured by the EU’s operating budgetary balance indicator.

Meanwhile, central and eastern European member states that received several percent of their GNI as net payments from the EU in 2014-2020 would face significant reductions, though they would still receive net payments of about two percent of their GNI in 2021-2027.

The methodology in this paper can be easily applied to estimate the net balance implications of any new MFF proposal.

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Podcast

Podcast

The EU recovery fund - state of play and outlook

Live from the Annual Meetings: Bruegel Director Guntram Wolff discusses the EU recovery fund, its state of play and outlook with Nadia Calviño, First Vice-President and Minister for Economy and Digitalization of Spain and Professor Karolina Ekholm of Stockholm University.

By: The Sound of Economics Topic: Macroeconomic policy Date: September 1, 2021
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Past Event

Past Event

The EU recovery fund - state of play and outlook

Bruegel Annual Meetings, Day 1- In The Sound of Economics Live session we will discuss the EU recovery fund, its state of play and outlook.

Speakers: Nadia Calviño, Karolina Ekholm and Guntram B. Wolff Topic: Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: September 1, 2021
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Past Event

Past Event

Investment firepower for the recovery: a conversation with Philippe Donnet, CEO of Assicurazioni Generali

At this event the CEO of Assicurazioni Generali, Philippe Donnet will be in conversation with Guntram Wolff, Director of Bruegel.

Speakers: Philippe Donnet and Guntram B. Wolff Topic: European governance, Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: July 8, 2021
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Past Event

Past Event

How to spend it? A closer look at the recovery plans

In this event, participants will take a closer look at the recovery plans submitted by EU countries.

Speakers: Zsolt Darvas, Alex Patelis and Maarten Verwey Topic: Macroeconomic policy Date: June 23, 2021
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Blog Post

Setting Europe’s economic recovery in motion: a first look at national plans

Plans for spending European Union recovery funds submitted by the four largest EU countries reflect rather different priorities. So far, only Italy is interested in borrowing from the EU.

By: Zsolt Darvas and Simone Tagliapietra Topic: Macroeconomic policy Date: April 29, 2021
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Blog Post

The post-coronavirus fiscal policy questions Europe must answer

Europe’s policymakers will have to take a series of decisions in the months ahead, in order to reinstate, and possibly reform, the bloc’s fiscal rulebook.

By: Thomas Wieser Topic: Macroeconomic policy Date: February 3, 2021
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External Publication

Building a Euro-area Budget Inside the EU Budget: Squaring the Circle?

As part of a volume on the Multiannual Financial Framework, the EUI recently published a chapter by Grégory Claeys on the creation of a euro area budget within the EU's budget.

By: Grégory Claeys Topic: Macroeconomic policy Date: December 1, 2020
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Blog Post

Next Generation EU payments across countries and years

How much cake does everyone actually get and at what speed? This blogpost estimates the yearly Next Generation EU (NGEU) payments to each EU country at current prices in euros and as a share of GNI.

By: Zsolt Darvas Topic: Macroeconomic policy Date: November 12, 2020
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Policy Contribution

European governance

European Union recovery funds: strings attached, but not tied up in knots

Ensuring effective recovery spending is a high-stakes challenge for the European Union, with the potential for derailment because of fuzzy objectives and overloaded procedures. The EU should work with member countries to identify limited policies that will maximise the impact of EU investment, while accounting for spillovers.

By: Jean Pisani-Ferry Topic: European governance, Macroeconomic policy Date: October 27, 2020
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Blog Post

The European climate law needs a strong just transition fund

To deliver on the goals of the European climate law, the European Union needs finally to get coal out of its energy mix: the EU should quicken the pace of decarbonisation whilst delivering on its goal of social inclusion.

By: Simone Tagliapietra Topic: Green economy Date: October 6, 2020
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Past Event

Past Event

From playing field to player: Europe’s strategic autonomy as our generation’s goal

At this online event Charles Michel spoke about the importance of Europe's strategic autonomy.

Speakers: Charles Michel and Guntram B. Wolff Topic: Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: September 28, 2020
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Opinion

Europe’s recovery gamble

Next Generation EU, was rightly hailed as a major breakthrough: never before had the EU borrowed to finance expenditures, let alone transfers to member states. But the programme and its Recovery and Resilience Facility amount to a high-risk gamble.

By: Jean Pisani-Ferry Topic: Banking and capital markets, Macroeconomic policy Date: September 25, 2020
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