Expenditure Priorities in the EU Budget for 2007-2013: The Perspective of Fiscal Federalism

Following difficult negotiations, the European institutions eventually, in May 2006, arrived at a consensus on a new Financial Framework for the European Union's budget over the years 2007 to 2013. In an additional declaration, the European Commission was invited to undertake a full review covering all aspects of EU spending until 2008-09. A mid-term review, however, should deal with the fundamental issue of which political tasks are best assigned to the EU and which tasks should be left to the responsibility of the member states. This problem is addressed by the economic theory of fiscal federalism.