European Economics http://lists.repec.org/mailman/listinfo/nep-eec European Economics 2026-06-29 The future financing of the European Union: An analysis of options for new own resources in the EU budget 2028-2034 https://d.repec.org/n?u=RePEc:wii:pnotes:pn:108&r=&r=eec As the European Union (EU) prepares its 2028–2034 budget, growing financing needs linked to the green and digital transitions, defence, competitiveness, and the repayment of NextGenerationEU debt have intensified debates over the future of EU financing. This study examines options for new EU own resources to support the financing of an expanded EU budget. The debate over EU revenues extends beyond technical budgetary considerations and is closely linked to broader questions concerning the future of European integration. Greater reliance on national contributions risks reinforcing distributive conflicts and public perceptions of the EU through national net balances, potentially weakening support for collective European action. The paper evaluates the European Commission’s proposed own resources alongside alternative revenue instruments, including financial transaction taxes, digital and corporate taxes, bank levies, aviation taxes, and taxes on ultra-high-net-worth individuals. Using criteria such as European added value, distributional effects, revenue potential, and the capacity to address negative externalities, the analysis finds that several alternatives could simultaneously strengthen EU revenues and tackle challenges such as tax avoidance, financial instability, climate change, and inequality. Taxes on highly mobile tax bases appear particularly suitable for EU-level implementation, as coordinated approaches can reduce tax competition and cross-border avoidance. The study concludes that a broader and more autonomous system of EU own resources, potentially complemented by common EU borrowing for strategic investments, could enhance the Union’s fiscal capacity, support the provision of European public goods, and strengthen the EU’s ability to respond to mounting geopolitical and economic challenges. Philipp Heimberger Bernhard Schütz EU budget, own resources, financing, Multiannual Financial Framework 2026-06 How far are we from the single market in Europe? An analysis of price level convergence https://d.repec.org/n?u=RePEc:zbw:bofecr:341668&r=&r=eec This paper examines price level differences and their evolvement over time across the European Union to find out how far we are from the Single Market that is cornerstone of European integration. The central question is how large these differences are and how they have evolved during the EMU period. This second question gives rise to several related issues: How much does the degree of convergence vary across countries? Has the speed of convergence changed over time? And what factors drive the eventual change and differences in convergence speeds? We find that the average speed of convergence is around 6 per cent. Although this speed has fluctuated over time, it shows no clear long-term trend after the early years of EMU. The convergence parameter appears to be systematically related to certain background variables - most importantly, the overall level of living standards and the size of the initial price level gap. Also, the overall inflation regime makes a difference. Hukkinen, Juhana Virén, Matti E. E. Market integration, price dispersion, state-dependent pricing, Balassa-Samuelson 2026 Determinants of Sectoral Energy Efficiency in New EU Member States: Energy Prices, Energy Price Uncertainty, and Regulatory Quality https://d.repec.org/n?u=RePEc:fau:wpaper:wp2026_15&r=&r=eec Improving energy efficiency is a cornerstone of the EU Fit-for-55, competitiveness, and energy-security strategy, yet performance across the new member states remains uneven despite price convergence and common regulatory frameworks. This study examines how energy prices, energy price uncertainty, and regulatory quality jointly shape sectoral energy efficiency in transition economies. We estimate a Shephard energy distance frontier model for seven new EU member states across ten industrial sectors over 1995–2015, modelling energy inefficiency directly as a function of these determinants and discrete reform episodes. Methodologically, we employ a consistent true fixed effects stochastic frontier estimated via the pairwise-difference estimator of Belotti and Ilardi (2018), which resolves the incidental parameters problem and disentangles inefficiency from unobserved heterogeneity. To our knowledge, this is the first joint one-step frontier estimation of price, price uncertainty, and governance as direct drivers of inefficiency, closing a gap between energy-pricing theory and applied frontier econometrics. Average efficiency is relatively high, with scope for roughly 21% energy savings from eliminating existing inefficiencies. Higher real energy prices significantly reduce inefficiency, confirming the price-discipline hypothesis. Energy price uncertainty robustly raises inefficiency, with a markedly stronger effect during the pre-accession adjustment phase and a weaker effect in high energy-intensive sectors. Regulatory quality is, counterintuitively, associated with higher transient inefficiency, plausibly reflecting adjustment costs. Results are robust to a balanced sub-sample and to Brent-based prices extending coverage to 2022 and eight countries. The findings imply that stabilising and credibly anchoring price signals matter more than raising average prices alone. Princewill Okwoche Milan Scasny Energy prices, energy price uncertainty, stochastic energy distance frontier, regulatory governance, energy efficiency 2026-06 Lack of Trust and Fiscal Dominance: Evidence from a Firm Survey Experiment https://d.repec.org/n?u=RePEc:cpr:ceprdp:21595&r=&r=eec We study how debt news shapes firms' inflation expectations in a monetary union. In an active-control experiment, German firms receive optimistic or pessimistic projections of France, Italy, and Spain's debt-to-GDP ratios. Pessimistic news raises debt beliefs and increases one- and three-year inflation expectations, with no detectable effect at five years. The response is driven by low-trust firms and by firms expecting relatively low ECB policy rates. A salient German debt-financed fiscal shock generates no comparable response. Within a Fisherian framework, the evidence suggests that debt news becomes inflationary when firms perceive incomplete fiscal backing and expect monetary accommodation. Bianchi, Francesco Faccini, Renato Melosi, Leonardo Wehrhöfer, Nils 2026-06