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Outcome of the special European Council, 20-21 February 2020

24-02-2020

On 20-21 February 2020, EU Heads of State or Government held their first meeting specially dedicated to the 2021-27 Multiannual Financial Framework (MFF) since the publication of the European Commission’s proposal in May 2018. Despite intense preparations and discussions, lasting over two days, EU leaders failed to overcome their differences and to find an agreement. At the end of the meeting, the President of the European Council, Charles Michel, declared that ‘we need more time’. When, and under ...

On 20-21 February 2020, EU Heads of State or Government held their first meeting specially dedicated to the 2021-27 Multiannual Financial Framework (MFF) since the publication of the European Commission’s proposal in May 2018. Despite intense preparations and discussions, lasting over two days, EU leaders failed to overcome their differences and to find an agreement. At the end of the meeting, the President of the European Council, Charles Michel, declared that ‘we need more time’. When, and under which conditions, the European Council will reconvene for another attempt to finding an agreement has not decided thus far.

The net operating balances or the "Juste retour" approach

19-02-2020

Operating budgetary balances (OBBs) are calculated and published annually by the European Commission as an attempt to document the differences between a Member State’s financial contribution to and its allocated expenditure from the EU budget. OBBs have become a highly politicised concept, with substantial shortcomings. Calculating Operating budgetary balances (OBB) is purely an accounting exercise. This is most convincingly demonstrated by the zero-sum assumption inherent in the Operating budgetary ...

Operating budgetary balances (OBBs) are calculated and published annually by the European Commission as an attempt to document the differences between a Member State’s financial contribution to and its allocated expenditure from the EU budget. OBBs have become a highly politicised concept, with substantial shortcomings. Calculating Operating budgetary balances (OBB) is purely an accounting exercise. This is most convincingly demonstrated by the zero-sum assumption inherent in the Operating budgetary balances concept, as a positive OBB of one country must necessarily be offset by a negative OBB of equal size by another Member State. Evidently, such a perspective stands in sharp contrast with the idea of an EU budget that is not primarily meant as a system of fiscal redistribution, but rather as a means to generate European added value..

Autor extern

Zareh Astryan, Annika Havlik, Friedrich heinermann, Justus Nover, Marta Pilati

Net operating balances indicator: A distorted indicator of a Member's benefit from the EU budget

19-02-2020

Operating budgetary balance (OBB) calculations imply that EU spending is a zero-sum game. This feature is inconsistent with the main argument that EU spending creates European added value. Thus, taking simple net operating balances as an indicator of a Member State’s ‘net benefit’ from the Union’s fiscal activities can lead to misleading results, as demonstrated in the following points of argument.

Operating budgetary balance (OBB) calculations imply that EU spending is a zero-sum game. This feature is inconsistent with the main argument that EU spending creates European added value. Thus, taking simple net operating balances as an indicator of a Member State’s ‘net benefit’ from the Union’s fiscal activities can lead to misleading results, as demonstrated in the following points of argument.

Autor extern

Zareh Astryan, Annika Havlik, Friedrich heinermann, Justus Nover

EU membership benefits: Not measured by net operating balances

19-02-2020

National operating budgetary balances (OBBs) do not take into account all of the economic and non-monetary benefits that Member States gain from EU membership. In many policy areas with cross-border characteristics and demand for critical mass, common action at the EU level may lead to better results than fragmented national initiatives. Several studies show that the Single Market has increased employment and growth. The effect of the Single Market deepening since 1990 has been quantified by 3.6 ...

National operating budgetary balances (OBBs) do not take into account all of the economic and non-monetary benefits that Member States gain from EU membership. In many policy areas with cross-border characteristics and demand for critical mass, common action at the EU level may lead to better results than fragmented national initiatives. Several studies show that the Single Market has increased employment and growth. The effect of the Single Market deepening since 1990 has been quantified by 3.6 million new jobs. Additionally, EU GDP would be 8.7% lower if there had been no Single Market integration. The average EU citizen gains €840 more per year thanks to the Single Market. While all EU citizens benefit from income gains thanks to the Single Market, these effects are higher for Western Europeans in absolute terms. Relative to GDP, gains and losses are more similar.

Autor extern

Marta Pilati, Fabian Zuleeg

How to overcome the "Juste retour" obsession

19-02-2020

A net budgetary balance is a highly misleading indicator of the benefits from EU spending and EU membership. Budgetary decisions taken on the basis of this indicator result in poor policies as they are biased towards programmes with monetary backflows into Member States. This ‘juste retour’ mentality is a major obstacle to achieving more European added value through the EU budget. The deeper underlying cause of this misleading and detrimental net balance preoccupation is the high salience and political ...

A net budgetary balance is a highly misleading indicator of the benefits from EU spending and EU membership. Budgetary decisions taken on the basis of this indicator result in poor policies as they are biased towards programmes with monetary backflows into Member States. This ‘juste retour’ mentality is a major obstacle to achieving more European added value through the EU budget. The deeper underlying cause of this misleading and detrimental net balance preoccupation is the high salience and political appeal of backflow policies, with their easily identifiable national and regional beneficiaries. Policies whose European benefits are more dispersed and do not entail payments into Member States do receive less voter and policy support.

Autor extern

Friedrich Heinermann, Marta Pilati, Fabien Zuleeg

"I want my money back": The history of national rebates

19-02-2020

This document is a brief overview of the history of the own resources system and its rebates.

This document is a brief overview of the history of the own resources system and its rebates.

Autor extern

Zareh Asatryan, Annika Havlik, Frierich Heinermann, Justus Nover, Marta Pilati

The benefits of EU membership are not measured by net operating balances

19-02-2020

National operating budgetary balances (OBBs) do not take into account all of the economic and non-monetary benefits that Member States gain from EU membership. In many policy areas with cross-border characteristics and demand for critical mass, common action at the EU level may lead to better results than fragmented national initiatives. Several studies show that the Single Market has increased employment and growth. The effect of the Single Market deepening since 1990 has been quantified by 3.6 ...

National operating budgetary balances (OBBs) do not take into account all of the economic and non-monetary benefits that Member States gain from EU membership. In many policy areas with cross-border characteristics and demand for critical mass, common action at the EU level may lead to better results than fragmented national initiatives. Several studies show that the Single Market has increased employment and growth. The effect of the Single Market deepening since 1990 has been quantified by 3.6 million new jobs. Additionally, EU GDP would be 8.7% lower if there had been no Single Market integration. The average EU citizen gains €840 more per year thanks to the Single Market. While all EU citizens benefit from income gains thanks to the Single Market, these effects are higher for Western Europeans in absolute terms. Relative to GDP, gains and losses are more similar..

Autor extern

Marta Pilati, Fabian Zuleeg

Why net operating balances are a distorted indicator of a Member State's benefit from the EU budget

19-02-2020

Operating budgetary balance (OBB) calculations imply that EU spending is a zero-sum game. This feature is inconsistent with the main argument that EU spending creates European added value. Thus, taking simple net operating balances as an indicator of a Member State’s ‘net benefit’ from the Union’s fiscal activities can lead to misleading results, as demonstrated in the following points of argument.

Operating budgetary balance (OBB) calculations imply that EU spending is a zero-sum game. This feature is inconsistent with the main argument that EU spending creates European added value. Thus, taking simple net operating balances as an indicator of a Member State’s ‘net benefit’ from the Union’s fiscal activities can lead to misleading results, as demonstrated in the following points of argument.

Autor extern

Zareh Astryan, Annika Havlik, Friedrich heinermann, Justus Nover

The net operating balances: Variants, emerging numbers and history

19-02-2020

Operating budgetary balances (OBBs) are calculated and published annually by the European Commission as an attempt to document the differences between a Member State’s financial contribution to and its allocated expenditure from the EU budget. OBBs have become a highly politicised concept, with substantial shortcomings. Calculating Operating budgetary balances is purely an accounting exercise. This is most convincingly demonstrated by the zero-sum assumption inherent in the Operating budgetary balance ...

Operating budgetary balances (OBBs) are calculated and published annually by the European Commission as an attempt to document the differences between a Member State’s financial contribution to and its allocated expenditure from the EU budget. OBBs have become a highly politicised concept, with substantial shortcomings. Calculating Operating budgetary balances is purely an accounting exercise. This is most convincingly demonstrated by the zero-sum assumption inherent in the Operating budgetary balance concept, as a positive OBB of one country must necessarily be offset by a negative OBB of equal size by another Member State. Evidently, such a perspective stands in sharp contrast with the idea of an EU budget that is not primarily meant as a system of fiscal redistribution, but rather as a means to generate European added value. In addition to the criticisms on the interpretation of Operating budgetary balances, the approach also has serious inherent limitations:.

Autor extern

Zareh Astryan, Annika Havlik, Friedrich heinermann, Justus Nover, Marta Pilati

Strategies to overcome the "juste retour" perspective on the EU budget

19-02-2020

A net budgetary balance is a highly misleading indicator of the benefits from EU spending and EU membership. Budgetary decisions taken on the basis of this indicator result in poor policies as they are biased towards programmes with monetary backflows into Member States. This ‘juste retour’ mentality is a major obstacle to achieving more European added value through the EU budget. The deeper underlying cause of this misleading and detrimental net balance preoccupation is the high salience and political ...

A net budgetary balance is a highly misleading indicator of the benefits from EU spending and EU membership. Budgetary decisions taken on the basis of this indicator result in poor policies as they are biased towards programmes with monetary backflows into Member States. This ‘juste retour’ mentality is a major obstacle to achieving more European added value through the EU budget. The deeper underlying cause of this misleading and detrimental net balance preoccupation is the high salience and political appeal of backflow policies, with their easily identifiable national and regional beneficiaries. Policies whose European benefits are more dispersed and do not entail payments into Member States do receive less voter and policy support. This briefing sketches and discusses the options that might correct this detrimental bias.

Autor extern

Giacomo Benedetto, Friedrich Heinermann, Fabian Zuleeg

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