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A Radical Way Out of the EU Budget Maze

It can be tempting to treat European budgetary discussions as a fairly inconsequential distributional game. But with the EU's role increasingly focused on the provision of public goods, in accordance with its values and priorities, this would be a mistake.

PARIS – In 2003, I co-authored a report on the future of the European Union – the Sapir report – in which we observed that the expenditures, revenues, and procedures of the EU budget were all inconsistent with the Union’s objectives. We therefore advocated a radical restructuring of what had become a “historical relic.” Seventeen years later, little has changed.

Two years ago, when negotiations on the budget for 2021-2027 started, I pointed out that the outcome would reveal what the EU is really up to, but that after high-drama bluffing, bullying, blackmail, and betrayal, such negotiations usually result in minimal changes. And here we are: we have had bluffing, bullying, blackmail, and betrayal, not least on the occasion of the inconclusive EU summit of February 20-21, and Europe appears to be headed for minimal changes.

Such an outcome would be dreadful. True, the EU’s budget is not what usually defines it. Europe’s integration has proceeded by establishing a legal system, common institutions, a single market and currency, and joint policies for competition, trade, and climate, rather than through joint spending programs. The lion’s share of its budget goes to transfers to poorer regions and farmers, which may or may not be useful but do not characterize what today’s Europe is about. It is therefore tempting to treat the EU’s budgetary discussion as a fairly inconsequential distributional game: Europe’s pork barrel.

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