Thinking the EU budget and public spending in Europe: the need to use an aggregate approach

Brief

It is essential to deal with the negotiations on the EU budget on the basis of an “aggregate” vision of European public finances, which integrates national and Community levels: here is the credo of the Policy brief written by Amélie Barbier-Gauchard, particularly enlightening and useful.

| 29/06/2011

| Amélie Barbier-Gauchard |

| Economics and finance

It is essential to deal with the negotiations on the EU budget on the basis of an “aggregate” vision of European public finances, which integrates national and Community levels:

Firstly, it enables to assess the total level of public spending in the EU and to obtain a better vision of the EU’s main financial priorities.

Secondly, most of the spending carried out by the EU takes place in fields of competence “shared” with Member States, and is thus frequently accompanied by significant national spending.

It also enables us to answer a longer-term question: is the current distribution of public spending between the Community and the national level comparable, or required to be comparable, with the distribution observed in other confederal or federal entities (such as the United States, Canada or Switzerland)?

This Policy brief by Amélie Barbier-Gauchard provides very enlightening elements of comprehension on these different perspectives. It also finally points out economic rationales in favour of more fiscal intervention at EU level to benefit from the “added value” of public spending at EU level.