Assessment of the European Commission's proposals for financing the EU budget in 2021–2027

Kawecka-Wyrzykowska Elżbieta ()
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Kawecka-Wyrzykowska Elżbieta: Collegium of World Economy, SGH Warsaw School of Economics, Warsaw, Poland

International Journal of Management and Economics, 2020, vol. 56, issue 3, 193-208

Abstract: A major problem in all European Union (EU) budgetary negotiations is the approach of Member States in net return terms (the fair-return approach). EU members compare their contributions to the EU budget with transfers that they receive from the budget. Net payers tend to reduce the size of the budget to contribute less. Brexit has aggravated the problem of the size of revenue (due to the United Kingdom's position as a big net payer). Also, new expenditure needs have arisen (for protecting external borders and climate, innovation, etc.). To address those needs, in 2018, the Commission submitted three proposals to supplement the current resources to finance the EU budget after the expiry of the principles of the Multiannual Financial Framework (MFF) for 2014–2020 at the end of 2020. The article aims to indicate whether the Commission's proposals are good instruments for the financing of the EU budget. The assessment relies on selected criteria based on theory. It also takes account of the feasibility of the proposals. The main conclusion is that none of the proposals meets well theoretical criteria of “genuine” EU revenue. Also, for practical reasons, it will be difficult for the Member States to come to an agreement on new budgetary resources. All proposals would be relatively costly for Poland.

Keywords: EU budget; EU Multiannual Financial Framework; own resources; EU taxes (search for similar items in EconPapers)
JEL-codes: H21 H61 H77 H87 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ijomae:v:56:y:2020:i:3:p:193-208:n:4

DOI: 10.2478/ijme-2020-0018

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