Which Options for a Reform? Gabriele CIPRIANI European University Institute 24 April 2015

Outline _________________________________________________________________________________ Criteria Options Conclusion

Criteria _________________________________________________________________________________ Begg, I., Enderlein, H., Le Cacheux, J. and Mrak, M., Financing of the European Union Budget, Study for European Commission, Final Report, April 2008, p. 73-74.

Criteria _________________________________________________________________________________ Simplicity Equity Transparency Democratic accountability

Political sustainability _________________________________________________________________________________ One single taxpayer. EU and national budgets are complementary, most of EU competences are shared. Legitimacy.

Options _________________________________________________________________________________ Status quo Fiscal autonomy Shared fiscal revenue

A simple criterion _________________________________________________________________________________ Funding of the EU budget through national contributions (VAT and GNI-based resources) in comparison to EU GNI (outturn 2007-2013, EU-27) Member states ‘National contributions’(€) Share in total ‘National contributions’ (%) Share of EU GNI (%) (1) (2) (3) (4) Belgium 22,949,141,618 3.16 2.88 Bulgaria 2,294,114,649 0.32 0.28 Czech Republic 8,995,310,434 1.24 1.10 Denmark 15,246,376,397 2.10 1.94 Germany 144,350,028,759 19.90 20.72 Estonia 1,001,211,841 0.14 0.12 Ireland 9,204,749,638 1.27 1.13 Greece 14,453,869,327 1.99 1.67 Spain 66,343,188,432 9.15 8.22 France 128,838,672,813 17.76 15.97 Italy 98,474,506,654 13.57 12.38 Cyprus 1,076,839,954 0.15 0.13 Latvia 1,322,859,528 0.18 0.17 Lithuania 1,907,016,535 0.26 0.24 Luxembourg 1,899,610,206 0.23 Hungary 5,859,788,801 0.81 0.74 Malta 391,808,117 0.05 Netherlands 27,396,559,320 3.78 4.69 Austria 16,920,847,347 2.33 2.31 Poland 22,249,236,981 3.07 2.73 Portugal 10,812,179,731 1.49 1.31 Romania 8,019,346,367 1.11 1.02 Slovenia 2,302,709,527 Slovakia 4,015,883,594 0.55 0.51 Finland 11,994,581,814 1.65 1.48 Sweden 19,464,224,118 2.68 2.96 United Kingdom 77,655,247,244 10.70 14.75 Total 725,439,909,748 100.00 Cipriani, G., Financing the EU Budget, mowing forward or backwards ?, Ceps, Brussels, 2014, p. 22.

Fiscal autonomy _________________________________________________________________________________ Many candidates Popularity Management

(G. Zalm, Dutch Finance Minister, Ecofin Council of 10 July 2001) An EU tax ? _________________________________________________________________________________ The last time a European tax was introduced, was at the time of the Duc d’Albe - and we had eighty years of war. (G. Zalm, Dutch Finance Minister, Ecofin Council of 10 July 2001)

Shared fiscal revenue _________________________________________________________________________________ A rate set at EU level Made visible to citizens No additional fiscal burden

A resource based on final consumption _________________________________________________________________________________ Cipriani, G., Financing the EU Budget, mowing forward or backwards ?, Ceps, Brussels, 2014, p. 65.

Visibility & Accountability _________________________________________________________________________________ Cipriani, G., Financing the EU Budget, mowing forward or backwards ?, Ceps, Brussels, 2014, p. 70.

Conclusion _________________________________________________________________________________ One single tax Better EU spending Accountability for results