Reforming the EU Budget: Reconciling Needs with Political‐Economic Constraints

Dissatisfaction with the current EU budget has inspired the ongoing general review of the Union's budgetary system. In this context our aim is threefold. First, we demonstrate that the application of normative yardsticks to the budget reveals severe shortcomings of the status quo. Secondly, we identify the political‐economic obstacles to budgetary reform. Thirdly, we review the reform literature and identify ‘incentive channelling reforms’ as the most promising type. This type of reform option takes account of the incentives which so far cause reform resistance and tries to reconcile them with a more efficient budgetary outcome.