What to Reform in the European Budget? Some Reflections on the Stakes of the Current Budget Review Process
The EU budget is the financial tool supporting European integration. The way it has developed over decades, both as concerns revenues and expenditure, superposed to a complex decision-making process, where member states retain veto rights in crucial respects, means that it currently displays a significant inertia, while its size and structure are not the most appropriate for endowing the Union with the means allowing it to best react to the present-day challenges. Tensions are also rising between the national interests of individual members and the common interest, which previous attempts to reconcile by way of special treatments granted to some countries are clearly unsustainable, while inducing additional rigidities to the budgetary construction. This obviates the need for a comprehensive reform, which the 2008/2009 budget review that the Commission was mandated to undertake may set in motion. The following paper attempts at taking stock of the most significant problems in need of a solution and to explore the most appropriate ways available for tackling them.
Nieuwe eigen middelen voor de Europese Unie. Seigniorage als legitieme mogelijkheid van de status quo
Samenvatting De Europese Commissie beraadt zich over de toekomst van het budget van de Europese Unie (EU). Een nieuw eigen middel, een Eurotax, staat hoog op het verlanglijstje. De huidige discussie wordt geplaagd door te veel ad hoc beoordelingscriteria van de voorgestelde middelen; een systematische aanzet is gewenst. De status quo is vanuit de legitimiteitseis die te stellen is aan EU-beleid zo gek nog niet. Alleen seigniorage komt als nieuw eigen middel in aanmerking. Seigniorage is de geldscheppingswinst die met de uitgifte van eurobankbiljetten wordt behaald.
Is There a Role for an Active Fiscal Stabilization Policy?
This paper discusses the need and scope for an active fiscal stabilization policy. It is argued that the effectiveness of fiscal policy as a short run stabilizer does not depend on the long run multipliers of (balanced budget) fiscal policies. To the extent that activity can be affected by aggregate demand in the short run, there is a case for a fiscal stabilization policy in terms of temporary variations in taxes or public consumption contingent on the state of the economy. The effectiveness of fiscal policy is supported by empirical evidence. However, an appropriate policy intervention depends both on the nature of the shock and the structure of the economy. There are thus fundamental information problems in pursuing discretionary fiscal policies on top of political economy concerns, and fiscal fine-tuning is not to be recommended. Automatic stabilizers do not to the same extent suffer from these problems, but their strength is not by design but the net result of other policy considerations. Hence, there is a need to consider the structure and size of automatic stabilizers.