Spending Priorities in the EU Budget 2007–2013: The Perspective of Fiscal Federalism

Hans Pitlik

Austrian Economic Quarterly, 2007, vol. 12, issue 1, 11-24

Abstract: The new financial framework of the EU for the years from 2007 to 2013 provides for total liabilities amounting to € 864 billion. The budget thereby just slightly exceeds 1 percent of aggregate national income of the 27 member states. However, the composition of expenditure corresponds only to some extent to concepts developed by the theory of fiscal federalism for an optimal allocation of economic responsibilities between the Union and its member states. Almost one-half of EU budgetary expenditure is devoted to items for which an EU responsibility is difficult to establish from the point of view of fiscal federalism. From a normative perspective, a readjustment of funds would be desirable in favour of policy areas for which a genuine European responsibility can indeed be justified (e.g., basic research).

Date: 2007
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