BUDGET OF THE EU: Current structure (2021-2027) New resources are being - Stability Programmes (euro zone) or Convergence

rammes (euro zone) or Convergence Programmes (outside euro zone) fixing goals
discussed: regarding:
REVENUES
• The medium-term budgetary objective → in 2 years... to move from 2,9 to 2,1
-Emissions Trading System
-Traditional own resources (agricultural and custom duties)→10-
own resource→ of • Adjustment path for achieving the objective.
12%
greenhouse gasses lately.
-VAT based own resource (limited quantity, not progressive)→15% Still subject to approval • National reform program→ to get the objective I’m going to take these actions...

-Gross National Income based own resource (“additional” at
beginning, now main item)→70%. Own resources ceiling increased
from 1,4% to 2% of EU GNI
-Resources based on plastic (contribution of amount of non-
recycled plastic, from January 2021)→New mechanism
-Other revenues→contributions of non-EU countries to certain
programs, interest on late payments, fines, surpluses→ as MFF
(Multi Financial Framework)
-TEMPORAL AND EXCEPTIONAL: E. Commission will borrow on
markets at favorable rate (for the first time to finance recovery).
EXPENSES
3. The Economic and Monetary Union: The SGP
-Carbon border adjustment
mechanism own
resource→Tax on carbon
footprint of product
entering the EU.
- Own resource based on
the profits of very large
multinational companies→
Tasa google: avoid large
companies from
committing tax evasion.
-Sustainable growth and resources:
CAP→COMMON AGRICULTURAL
POLICY
Not only production subsidies, also
for natural preservation and creation
of natural spaces.
-Security and citizenship: home
affairs and current home countries
issues
-Global Europe: Foreign affairs
policies. We do not deal with a
common policy, but with different
policies (support role)
-Administration: Luxembourg based
• Economic perspectives (economic outlook) →forecasts and Monetary goals (only for countries
outside the euro zone)
• The Corrective Arm→ Excessive Deficit Procedure: Sanctions system:
- Non-interest-bearing deposit with the EU. The amount of this deposit comprises a fixed
component (0.2 % of GDP) and variable component equal to one % point for each point of
deviation from the allowed deficit (3 % of GDP).
- Deposits may not exceed the upper limit of 0.5% of GDP per year and can become a sanction if
the deficit has not been corrected in two years. The Council of Ministers decides.
Stability and Growth Pact has evolved significantly (amendments from 2005 to 2015):
Consideration of individual national circumstances, reinforcement of economic cooperation,
more flexibility with g deficit to boost investment, job creation and growth.
4.New commitments for more integration for the future, better governance:
• Fiscal Union: budgetary discipline and new pact. Additional measures:
-New monitoring -New budgetary plans -new imbalance procedure
• Banking Union 2014: financial supervision and recapitalization and European Stability
Mechanism
To prevent a complete collapse of the banking system, European governments came to the
rescue of their banks with urgent support (13 % of the EU’s annual GDP committed between
2008 and 2011). This proved that banking system was fragile.
In response, the EU and its member countries have been strengthening financial sector
supervision: Single Supervisory Mechanism and Single Resolution Mechanism.
• Economic Union: Europe 2020 Strategy
- Smart, through the development of knowledge and innovation;

Stability and Growth Pact (1997): Rules to ensure sound public finance and fiscal compliance
after convergence exam. EU Member States reinforce the deficit and debt limits established in
the Maastricht Treaty. (3% over GDP for public deficit and 60% over GPD for public debt). Two
procedures:
• Preventive Arm→Surveillance of Budgetary Policies: Monitoring and coordinating Member
States' budgetary policies→preventive measures to ensure discipline.
- Sustainable→greener, more resource efficient and more competitive economy;
- Inclusive→ strengthening employment, and social and territorial cohesion.
Targets: increase the employment rate of aged 20-64 to 75 %; investing 3 % of gross
domestic product (GDP) in R&D; reducing carbon emissions by 20-30%, increasing the
share of renewable energies by 20 % and increase energy efficiency 20 %; reducing the
school drop-out rate to less than 10 % and increase the proportion of tertiary degrees to
40 %; reducing the number of people threatened by poverty by 20 million.