Contribution of Indhira Santos to the on-line debate organised
by Notre Europe on the CEPS
policy brief “A new budget for the European Union?” by Alfonso Iozzo,
Stefano Micossi and Maria Teresa Salvemini

Iozzo et al (2008) do a great job in identifying the main issues in the EU Budget’s expenditures, revenues and decision-making process and put forward an innovative proposal to address these shortcomings. The authors’ proposal relies on dividing up the EU budget expenditures in three

categories – redistributive, EU public goods and capital expenditures – and having a differential funding structure for each expense class. In doing so, the authors try to link closer together the expenditure and revenue sides of the EU budget and reduce the detrimental effects of net balances on expenditure quality. The paper further recognizes the constraints imposed by the political process in the EU budget where indeed many expenditures are redistributive in nature. It is ambitious in that it foresees the creation of an EU tax and effectively joint issuance of bonds and, in terms of economic efficiency, points at the right direction. Its practicality and its final effect on the distribution of expenditures are less obvious, however…