The
order and modalities of cross-member state redistribution as well as the net
financial position of the member states are one of the most widely discussed
aspects of European integration. The paper addresses selected issues in the
current debate on the EU budget for the period 2007 to 2013 and introduces four
scenarios. The first is identical to the European Commission's proposal; the
second is based on reducing the budget to 1% of the EU's GNI, as proposed by
the six net-payer countries, while maintaining the expenditure structure of the
Commission's proposal. The next two scenarios represent radical reforms: one of
them also features a '1% EU GNI'; however, the expenditures for providing
'EU-wide value-added' are left unchanged and it is envisaged that the requisite
cuts will be made in the expenditures earmarked for cohesion. The other reform
scenario is different from the former one in that the cohesion-related
expenditures are left unchanged and the expenditures for providing 'EU-wide
value-added' are reduced. After the comparison of the various scenarios, the
allocation of transfers to the new member states in terms of the conditions
prevailing in the different scenarios is analysed.
