Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

would have received a rebate of two thirds of the excess above this level,
the cost being spread across all member states. The proposal was not
however adopted by the Council.
Other proposals have been made which attempt to remedy some of the
lacunae in the Commission scheme. A proposal by de la Fuente et al.
suggests linking net balances rigourously to prosperity. 2 This would have
the advantage of separating budgetary proposals from distribution issues.
It would mean that all member states’ transfers to the Union budget would
be increased by a decision to spend additional funds, so that it would
attack not only the problem with excessive deficits but also excessive
receipts. Such a scheme should make it easier to make a radical assessment
of EU policies which have a budgetary impact and where desired to make
changes. Under such a system a sharp reduction in expenditure on the
CAP would not have an excessively negative effect on the budgetary
situation of those countries which benefit from this policy.
The problem with such a proposed radical change is mainly the practical
problem of its negotiation. The move to a fairer system, which would allow
significant changes on the expenditure side of the budget would mean that
some countries would be faced with considerable increases in net
contributions; in the case of the “de la Fuente” system for instance, if the
same level of redistribution was maintained as at present, Ireland would
be a major loser, as would Greece, the UK and several of the new member
states, while the big winners would be Italy, Germany and France. And of
course any change would have to be supported unanimously. The system
might also not appeal to the European Commission and Parliament, which
might find it more difficult to persuade the member states to accept the
financing of EU wide programmes.
The problem of policy being partly driven by net budget balances must be
tackled in the longer term: and the solution like that proposed by de la
Fuente et al. is certainly worthy of further work. However at present there
seems to be no enthusiasm in the Union to consider such fundamental
reform in the short-term.
The problem which led to the introduction of budget rebates in the Union
was the very large expenditure on the Common Agricultural Policy; in
other words it was a problem on the expenditure side of the budget. An
easier route to reform, though a far less satisfactory solution, might be to
tackle a reform of EU expenditure.
Chapter 4 – Alan Mayhew 71