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Why should the European Union centralise public expenditure at EU level?

Publishing date
21 October 2024
Authors
Emmanuel Mourlon-Druol
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From major road building projects in disadvantaged parts of the European Union to jobs and facilities for top EU researchers and institutions, public expenditure centralised at EU level has come to be taken for granted. But there have also been many missed opportunities. One of the earliest European integration projects, the failed European Defence Community, involved a common budget for European defence. In the context of the Cold War, several European countries agreed on shared expenditure to defend themselves, until the French Parliament eventually torpedoed the project in 1952. Much later, Scottish economist Donald MacDougall led a group of experts that set out in a 1977 report ambitious plans for a putative European federal budget. The MacDougall Report analysed different scenarios of integration, implying a common budget ranging from 2% to 25%.

Why did EU countries decide to spend in common in the first place? In the past few years, the debate about so-called European public goods has been based on the argument that member states should decide on common spending for reasons of economic efficiency. Spending at European level would provide added value compared to spending confined to the national level alone. Several criteria have been put forward for identification of such situations, which policies would be best allocated to the EU level and which could be left to the national level.  

In this Policy Brief I show that the discussion on European public goods is not new, though it has morphed and been relabelled over time. EU agreements on common spending have relied heavily on political considerations, in addition to, or instead of, carefully crafted analyses of economic efficiency. These precedents should inform todays discussions and help better realise the limits of decisions on common spending, thus helping attain greater realism in future debates.


Read the policy brief, An uphill struggle: a long-term perspective on the European public goods debate by Emmanuel Mourlon-Druol.

The Why Axis is a weekly newsletter distributed by Bruegel, bringing you the latest research on European economic policy. 

About the authors

  • Emmanuel Mourlon-Druol

    Emmanuel Mourlon-Druol was a Visiting fellow at Bruegel in 2015 and he is now a Non-resident fellow. He is Professor of History of European Cooperation and Integration at the European University Institute in Florence. His research focuses on European economic and monetary cooperation since 1945, sovereign debt crises and global governance. He is Principal Investigator of the project : The Making of a Lopsided Union Economic Integration in the European Economic Community, 1957-1992 funded by a Starting Grant of the European Research Council (ERC).

    Prior to joining the EUI, Emmanuel was Professor of International Economic History at the University of Glasgow. Emmanuel held several visiting appointments at the Universit矇 Libre de Bruxelles (2015-2019), the University of Economics in Prague (2015) and the University of Tokyo (2020). He is the author of A Europe Made of Money: the Emergence of the European Monetary System (Cornell University Press, 2012) and co-editor of International Summitry and Global Governance: the Rise of the G-7 and the European Council, 1974-1991 (with Federico Romero, Routledge 2014). His work has appeared in Business History, Cold War History, Contemporary European History, Diplomacy & Statecraft, JCMS: Journal of Common Market Studies, and West European Politics, among others. You can find more information on his .

Keyword
WhyAxis newsletter
Language
English

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