EU and money Flashcards
(20 cards)
NATO model -
4 key policy instruments for governments
4 key policy instruments for governments
Nodality
Authority
Treasures
Organisaties
Nodality
centralized communication
EU = weak
authority
rule-making and enforcement
EU = strong, but indirect
treasure
financial incentives
EU = scattered, so depends
organisation
structure of public service provision
EU = medium and indirect
Two different budgetary procedures
Procedure 1: (all with strict deadlines)
Procedure 2: Multi-Annual Financial Framework (7 years!)
Procedure 1: (all with strict deadlines)
Council prepares draft budget
Council presents amendments
EP accepts or rejects (with reasons)
Meeting between 27 EP and Council members on each side
Compromise leads to acceptance, otherwise the cycle starts again.
Procedure 2: Multi-Annual Financial Framework (7 years)
Commission prepares draft framework
Council needs to be unanimous
EP accepts or rejects (with reasons)
A ‘framework’, but basically boxing in the annual EU budgets (currently: 2021-2027)
Advantages and disadvantages 7 year cycle
with a 7 year cycle the EU budget becomes more predictable, but less flexible in case of emergencies.
It reduces major political contestation to once every 7 year, major EU spending policies now also have a 7 year cycle.
more predictable, less flexible
Spending from EU
civil servants, buildings, EU institutions, spending programmes
Earnings EU
contribution from member states, some EU taxes
Balance EU
return to member states, in exceptional cases borrow money
Revenues
National contributions based on Gross National Income
‘Own Resources of the European Union’
A mixed bag of duties, collected by Member States on behalf of the EU: customs duties, excise duties on certain agricultural products, fixed part of VAT, carbon tax, (part of) single-use plastic tax
What are the revenues spend on
Some of the EU’s most costly policies/biggest funds: cohesion policy, regional development / rural development funds, common agricultural policy, Erasmus / horizon: research policy
What if crisis strikes
Case is COVID
EU would borrow money on the capital market (Eurobonds). Interest rates were very low at the time.
Disburse that money to member states, upon handing in a spending plan that fits the EU policy ambitions (conditionality)
Member states would only need to repay part of that
EU would increase its own resources to cover for the rest
conditionality
Means that there are strings attached.
Exist in many different forms: rule of law conditionality, cross-compliance (agriculture), proving deliverables in detail (almost every policy area), human rights conditionality (international trade).
EU and money: micro level
individual subsidy decisions to individual applicants
EU and money: meso level
annual budget, income and expenditure per year
EU money: macro level
multiannual financial framework, 7 year cycle. General principles of EU budget
