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Economics of EU integration > Session 10 > Flashcards

Session 10 Flashcards

1
Q

What is the Next Generation EU made of?

A

it amounts to 750€ billion, it is made of Loans, Grants for Recovery and Resilience Facility, and other Grants

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2
Q

When will most payments be done for NextGen?

A

In 2023 and 2024, consisting of almost 50-50 grants and loan, until 2025 where the size of loan reduces.

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3
Q

How many national plans were presented in the context of NextGen?

A

26 plans were presented.

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4
Q

How many countries will receive loans in the context of NextGen?

A

7 countries: Greece, Italy, Romania, Cyprus, Polan, Portugal and Slovenia.

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5
Q

Who will receive the full amount of them loans?

A

Greece, Italy and Romania.

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6
Q

Who will receive between 16% and 37% of the loans?

A

Cyprus, Poland, Portugal and Slovenia

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7
Q

Until when can countries request loan support?

A

Until 31 August 2023

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8
Q

What are the main justification for the Next Generation Europe fund?

A

Inspired by Musgrave:

  • Allocation based on 6 pillars which priorities environmental protection and the digital agenda
  • Redistribution, NG as an extension of the EU’s cohesion policies
  • Stabilisation: boosting the recovery so as a macroeconomic stabilisation function, role somewhat limited
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9
Q

What does the literature say about the effectiveness of EU cohesion policy?

A

So far studies are inconclusive:

  • Some find positive long-term impacts
  • Only short term impacts
  • No/negative impact
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10
Q

What explains the inconclusiveness the studies on of EU cohesion policy?

A

Major complicating factors such as:

  • Complex local environments
  • Diversity of policy interventions beyond cohesion policy
  • varying time frames
  • cross regional spillover effects
  • lack of appropriate date for analysis
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11
Q

What are the expectations on 2014-2020 funds on the GDP?

A

They are expected to boost GDP per capita in less developed regions by 2% in 2023, with a lasting effect according to the EU 8th report

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12
Q

What were the key findings by Becker on Union’s Structural and Cohesion Funds?

A
  1. They induced positive average effects on per-capita growth in regions that lagged behind the EU average
  2. More expense did not induce proportionately larget effects
  3. Regions respond heterogeneously, w/ smaller effects when institutions are bad, and human capital scarce
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13
Q

How much does one euro of transfers generate?

A

It generates between 1 and 1.20 euros on average increased in income. But this effect is not uniform because of technological absorptive capacity (human capital endowments) and institution absorptive capacity (absence of corruption and weak administrative processes)

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14
Q

Where is the absorptive capacity positive and significant?

A

In France, in the UK, Germany, Scandinavia

Linked with high quality of government

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15
Q

Where is the absorptive capacity more negative?

A

Spain, Portugal, Italy and Greece linked w/ lower quality of governement

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16
Q

What’’s an ineffective policy?

A

A policy that has a high level of assistance and a negligible impact.

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17
Q

What’s an effective policy?

A

A policy that has a high level of assistance and a positive impact

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18
Q

What’s a trigger policy?

A

A policy that has a low level of assistance and a positive impact.

19
Q

What’s a marginal policy?

A

A policy that has a low level of assistance and a negligible impact.

20
Q

What’s a displacement policy?

A

A policy that has a negative impact.

21
Q

How can one explain difference in outcomes?

A
  1. Duration
  2. COncentration of priorities
  3. National co-financing
  4. Project management
  5. Beneficiary
22
Q

How can duration affect outcomes?

A

Duration is strongly associated w/ unexplained economic growth, which hints at the positive effects of taking a longer term view of investments

23
Q

How does concentration of priorities affect outcomes?

A

A greater concentration of programme priorities is associated with better economic performance.

24
Q

How can national co-financing affect outcomes?

A

One of the most robust result is the negative association between national co-financing rate and unexplained economic growth.

25
Q

How can project management affect outcomes?

A

One of the strongest positive association is between unexplained economic growth and proportion of projects managed at national level (as opposed to regional or local)

26
Q

How can beneficiaries affect outcomes?

A

Regions with a higher proportion of projects whose primary beneficiary is a private company also perform better.

27
Q

What kind of issue can arise with these cohesion funds?

A

It can be a treatment withou being a cure, which means that if you stop the treatment, the problem may still come back.
For example abruzzi experienced a 5.5% drop in per capita GDP compared to Synthetic Abruzzi because it lost Objective 1 support.

28
Q

What were the 4 variables on which the effects of 1989 - 2013 for objective 1 structural funds were measured?

A

Average pap-adjusted GDP per capita growth
Average annual employment growth
Average annual total investment intensity
Average annual public investment intensity

29
Q

Which variables significantly increased?

A

Average annual PPP adjusted GDP per capita growth

Average annual public investment intensity

30
Q

What do the results suggest on objective 1?

A

That the increased accumulation of public capital stock crowds out some private investments

31
Q

What are the plans for the EU own resource system?

A
  1. A new own resource based on non-recycled plastic waste
  2. carbon border adjustment mechanism and a digital levy
  3. Revised ES scheme
    Financial traction Tax + early repayment of NGEU borrowing
32
Q

What’s the long term objective of own resource?

A

To replace the GNI resource, which is not bad because transparent, and distributes the financing burden between MS in a proportional way and fiancned via national taxes (respects the principle of subsidiarity)

33
Q

What are the main critiques against the GNI resource?

A
  • They have a distorting effect on political decisions about the EU budget, it encourages a thinking in terms of net balances which is not appropriate because it’s not just transfers between member states
  • Financing of the EU through GNI ignores potential resources that are by definition truly European
34
Q

Through what kind of resources should the EU budget be financed?

A

Through permanent resources.

35
Q

Why can’t the EU Budget be financed by permanent resources?

A

Because of recent decisions, ttemporary revenue is needed to service and pay down the debt incurred in the context of NGEU.

36
Q

What are the criteria that should be used for the future of EU budget resources?

A
  1. Can the origin of the revenu be assigned to a particular MS
  2. Can the revenue be raised in isolation or does it require pan european tax coordination
  3. Can the introduction of this new resource help reduce tax distortions
  4. Is the resource related to EU policies
37
Q

What is the ETS?

A

It is a cap and trade system, with free allowances.

38
Q

Why should ETC revenued be allocated to the EU?

A

The corresponding policy is fundamentally a common policy, which proceeds from the auctioning of emission permits.

39
Q

Why can we say that the ETC is a pigouvian resource?

A

If this tx is successful, revenues from it would decrease over time. But it can still be expected until 2050.

40
Q

According to the realistic scenario, how much could be earned from the ETS?

A

25 billion/year over the next 30 years because of

  • increase in carbon price
  • substitution of free allowances by auctioned allowances
  • broadening of the ETS scope
41
Q

What does the CBA plan to do?

A

Goods imported to the EU would pay a charge that reflects their carbon content, that is the CO2 emissions generated by their production.

42
Q

What is the problem of the CBA?

A

For it to maximise its objective and reduce leakages, it would need to be symmetric (taxes on imports and subsidies on exports)
the net revenu would be 0 + domestic production could actually stay carbon intensive as long as we export

43
Q

What are other sources of own resource for the EU?

A
  • The digital levy, currently on hold, and waiting fr OECD’s base erosion and profit shifting BEPS action program
  • Financial Transaction Tax, seen to be the next MFF, it is all suited as an own resource but its estimated revenues are very limited.

Economics of EU integration (11 decks)

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