Europe for Growth: For a Radical Change in Financing the EU

Jutta Haug, Alain Lamassoure, Guy Verhofstadt, Daniel Gros, Paul De Grauwe, Gaëtane Ricard-Nihoul & Eulalia Rubio, EUROPE FOR GROWTH: FOR A RADICAL CHANGE IN FINANCING THE EU, CEPS Paperbacks, 2011

86 Pages Posted: 31 Jul 2011  

Jutta Haug

affiliation not provided to SSRN

Alain Lamassoure

Parlement Europeen

Guy Verhofstadt

affiliation not provided to SSRN

Daniel Gros

Centre for European Policy Studies, Brussels; CESifo (Center for Economic Studies and Ifo Institute)

Gaëtane Ricard-Nihoul

affiliation not provided to SSRN

Paul De Grauwe

London School of Economics & Political Science (LSE); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Centre for Economic Policy Research (CEPR)

Eulalia Rubio

affiliation not provided to SSRN

Date Written: April 6, 2011

Abstract

The system for financing the EU today is on its last legs. Indeed, with the EU budget being predominantly financed by national contributions, member states attach great importance to what they get in return, which in the end affects the European principle of solidarity and makes every budgetary negotiation a potential arena for political blockage. The economic and financial crisis, with its corresponding increase in the public deficit of member states, has unfortunately worsened the situation.

Fully funding the European Union with own resources is the only way to put an end to the fair return approach and to make the necessary changes to EU spending that would provide it with the financial means equal to its needs and allow it to face the challenges of the future.

On the eve of the presentation of a new proposal for own resources announced by the European Commission, Jutta Haug, Alain Lamassoure and Guy Verhofstadt, Members of the European Parliament belonging to three different political groups, have brought together their views and present this report as their contribution to the debate.

Economists Daniel Gros and Paul De Grauwe of CEPS and Gaëtane Ricard-Nihoul and Eulalia Rubio of Notre Europe have collaborated with them in this important project. They demonstrate in this report that fully financing an EU budget of the size it is today with genuine own resources is not a dream but that such a change is feasible, provided that the political will to reform the current system can be summoned. Moreover, they find that it would not infringe on the member states’ fiscal sovereignty. On the contrary, it would reinforce the link between the European Union and its citizens, putting an end to member states' tendency to calculate their net returns and possibly even enabling them to make cuts to their public expenditure. Finally, such a reform would represent a return to the spirit and the letter of the Treaty of Rome, which contained a clear aspiration for financial autonomy and which prevailed until the end of the 1980s.

Keywords: economic crisis, financial crisis, EU, budget, EU budget, member states, public deficit, European Union

Suggested Citation

Haug, Jutta and Lamassoure, Alain and Verhofstadt, Guy and Gros, Daniel and Ricard-Nihoul, Gaëtane and De Grauwe, Paul and Rubio, Eulalia, Europe for Growth: For a Radical Change in Financing the EU (April 6, 2011). Jutta Haug, Alain Lamassoure, Guy Verhofstadt, Daniel Gros, Paul De Grauwe, Gaëtane Ricard-Nihoul & Eulalia Rubio, EUROPE FOR GROWTH: FOR A RADICAL CHANGE IN FINANCING THE EU, CEPS Paperbacks, 2011. Available at SSRN: https://ssrn.com/abstract=1898678

Jutta Haug

affiliation not provided to SSRN

Alain Lamassoure

Parlement Europeen ( email )

Bât. Altiero Spinelli
60 rue Wiertz / Wiertzstraat 60
Brussels, B-1047
Belgium

Guy Verhofstadt

affiliation not provided to SSRN

Daniel Gros (Contact Author)

Centre for European Policy Studies, Brussels ( email )

1 Place du Congres
B-1000 Brussels, 1000
Belgium

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Gaëtane Ricard-Nihoul

affiliation not provided to SSRN

Paul De Grauwe

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Eulalia Rubio

affiliation not provided to SSRN

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