New demands for EU spending: justifiable or fanciful?

Begg, Iain (2009) New demands for EU spending: justifiable or fanciful? In: UNSPECIFIED.

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Abstract

The aim of this paper is to examine how expenditure from the EU budget on new classes of public goods could help to address major demands on policy after the end of the 2007-13 Multi-annual Financial Framework, formally agreed in 2006. It starts by discussing principles for preferring the EU level and their limitations as a guide to decision-making, an exercise that builds partly on insights from first- and second-generation fiscal federalism, but also brings in political economy considerations. The paper then looks specifically at two areas of economic governance in which it is frequently claimed that the current low level of EU spending is simply not commensurate with the aims the Union has set itself and has embodied in its principal co-ordination processes. These are how to secure a transition to a low carbon economy (part of both the Sustainable Development Strategy and the evolving Energy Policy for Europe) and how to underpin efforts to boost productivity growth as part of the Lisbon strategy. The main message from the paper is that although the EU budget could, and probably should, be orientated more towards these aims as part of a more coherent approach to economic governance, hard choices will be needed in deploying what is certain to remain a limited policy instrument.

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