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Mid-term European Budget Review

This report discusses the changing distribution of expenditures and net balances in the European budget, as well as the need for reform in both expenditures and financing. It explores potential new instruments for financing and the benefits of adopting a new own resource. The report also suggests moving towards a focus on expenditures with European Value Added and implementing a 5-year Multiannual Financial Framework.

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Mid-term European Budget Review

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  1. Mid-term European Budget Review Mid-term Review: Seizing the opportunity for reform Jacques Le Cacheux, Professor UPPA, OFCE, Sciences Po, and Stanford U. in Paris European Parliament, Brussels, March 17, 2016

  2. The distribution of expenditures has changed over time 2000-2006, % GNI

  3. The distribution of expenditures has changed over time 2007-2013, % GNI

  4. … and so have the ‘net balances’ Mn €

  5. The ‘net balances’ have changed over time % GNI

  6. The issue of financing • The current structure: in 2015, 75% GNI-based contributions, 13% VAT-based, and 12% TOR. • The VAT-based resource is almost like GNI-based. • The pros and cons of the GNI-based resource.

  7. The issue of financing • The need to reform, both expenditures and financing. • On the financing side, which new instruments? • Reforming without treaty changes implies keeping GNI-based resource as a balancing instrument. May also be used to correct distributive consequences of other resource instruments.

  8. The issue of financing • The leading candidates: VAT, CIT, Carbon levy, FTT. • Why and how to adopt a new own resource: • Change the focus, from net balances to expenditures with European Value Added. • Institutional framework for decision-making over the revenue side. • Switch to a 5-year MFF.

  9. for good reasons

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