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Tag Archives: EU budget

Who pays for the EU budget rebates and why?

A complex system of EU budget revenue corrections has been developed since the mid-1980s. I quantify their impacts: which countries pay and benefit from it and by how much and highlight several anomalies. The best solution would be to reform EU budget spending to provide only European public goods and eliminate all rebates. But if that’s not possible, then at least the rationale for the rebates should be spelt out clearly, and a transparent system built on clear principles should replace the...

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Uncertainty over output gap and structural-balance estimates remains elevated

The EU fiscal framework strongly relies on the structural budget balance indicator, which aims to measure the ‘underlying’ position of the budget. But this indicator is not observed, only estimations can be made. This post shows that estimates of the European Commission, the IMF, the OECD and national governments widely differ from each other and all estimates are subject to very large annual revisions. The EU should get rid of the fiscal rules that rely on structural balance estimates and...

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The campaign against ‘nonsense’ output gaps

A campaign against “nonsense” consensus output gaps has been launched on social media. It has triggered responses focusing on the implications of output gaps for fiscal policy under EU rules, especially for Italy. But the debate about the reliability of output-gap estimates is more wide-ranging. The debate on the output gap is hardly new. What motivates this review is rather the social media campaign Robin Brooks (Institute of International Finance) recently launched against “nonsense”...

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Overcoming the hurdles to Italian Growth

Now is the time for refining recommendations and for a serious political debate on how best to overcome bottlenecks and improve the economic prospects of Italians. By: Guntram B. Wolff Date: September 4, 2018 Topic: European Macroeconomics & Governance This opinion piece was also published in La Repubblica As the Italian government is contemplating its budgetary policy, it is useful to look at other countries’ experiences...

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The Commission’s proposal for the next MFF: A glass half-full

The Commission’s proposal for the next Multiannual Financial Framework provides a good basis for subsequent negotiations and includes a number of bold suggestions. But it has a number of deficiencies and some of the proposed tools are conceptually weak. We make proposals as to how to improve them. On May 2nd, the European Commission published its proposal for the broad outline of the next seven-year EU budget, the Multiannual Financial Framework (MFF) for the period 2021-27. The proposal...

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What does Europe care about? Watch where it spends

The European Union says it wants to focus on new priorities. First it will have to cut spending in sectors that have long enjoyed support. By: Guntram B. Wolff Date: May 14, 2018 Topic: European Macroeconomics & Governance This article was published first by Bloomberg, on March 21st 2018. “Don’t tell me what you value,” Joe Biden once said. “Show me your budget, and I’ll tell you what you value.” He wasn’t talking about...

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New EMU stabilisation tool within the MFF will have minimal impact without deeper EU budget reform

The European Commission’s proposal for a new stabilisation instrument inside the EU budget for the countries of the economic and monetary union is disappointing. This analysis highlights the proposed instrument’s main limitations, as well as the restrictive factors that will persist without a deeper EU budget reform. By: Grégory Claeys Date: May 9, 2018 Topic: European Macroeconomics & Governance On May 2, the European...

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How large is the proposed decline in EU agricultural and cohesion spending?

Cohesion spending is proposed by the Commission to increase by 6% in the next MFF, but inflation is expected to reduce the real value of such spending by 7%. The gradual convergence of the least developed regions to the EU average reduces the need for cohesion spending. Common agricultural spending is proposed to be cut by 4%, while if we consider inflation too, the reduction in real value is 15%. In this post we focus on a special aspect of the new proposal from the European Commission...

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EU budget: Scope to reform Common Agricultural Policy

In this episode of ‘The Sound of Economics’, Bruegel director Guntram B. Wolff talks with Lars Hoelgaard, former deputy director general at DG AGRI, regarding the possibilities for reforming the EU’s Common Agricultural Policy and the consequences for the new Multiannual Financial Framework. By: The Sound of Economics Date: March 20, 2018 Topic: European Macroeconomics & Governance Ongoing negotiations over the next...

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Europe needs a strong Italy

Europe needs to have its Italian voice. A stable government is required not only to pursue domestic policies and remain fiscally prudent but also to negotiate on euro-area reform, priorities in the EU budget and intensifying competition in global trade. By: Guntram B. Wolff Date: March 20, 2018 Topic: European Macroeconomics & Governance This opinion piece has been published in: All eyes turn to Italy, in the wake of the...

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