Session 4 Flashcards
What is the multi annual financial framework?
It is the EU long-term budget. It sets the limits for EU spending over a certain period. It concerns both commitments and payments
What are the 4 more important principles of the annual budget?
Annuality (for a single year)
Equilibrium (revenue and payment are in balance)
Universality (revenues cover all expenditures)
Specification (each spending must be assigned to a specific objective)
What proportion of total public expenditure does the EU budget contribute to?
Only a small contribution, around 1% of Gross National Income.
According to Musgrave what are the three roles for state intervention?
- Redistribution -> reduce inequalities
- Stablization -> influence the economic cycle
- Allocation -> for the environment to mitage externalities
What are the key sources of financing?
traditional own resources (tariffs)
VAT
Gross Nation Income rown resource
New sources of financing?
- Non recycles plastic packaging wast own resource
- Maybe more in 2023
Is there redistribution within the EU?
Richer MS contribute more to the budget than they receive, while poorer MS receive more than they contribute.
Who is an outlier in terms of contribution?
Luxembourg is the richest by far and gets one of the highest relative net receipts
What portion of budget goes back to the states
75%
Evaluate the equalising effect of the EU. Passimeni and Rizzo.
1,1 % equalising effect, automatic flows
Evaluate cross border effects
Cross border transfer higher in the US, even more during crises. 0,25% in the EU, 1,5% US, 9 in times of crises.
Multi-annual budget yearly
Close to 150 bn /year
Are flows responsive to crises?
Not in the EU (revenues are more responsive but not expenditures), because automatic. It 30 times more responsive in the US
