As you may know, at the moment I'm researching in the future of European public finance. I've been doing it for some years now and this is why I'm aware of the strenghts and limitations that the European Union has.
Firstly, we must stress that the internal market is not fully completed. We must ensure a market characterized by the greatest possible freedom of suplly and choice. Some say it's still in need of guidance, but I'm not quite sure about it.
Secondly, due to the new Member States with different economic structures and some of them clearly falling behind, it also calls for a strengthening of the redistribution function. I know this is a controversial matter, but in fact the EU has been built upon this belief, specially through the Cohesion Funds or other structural instruments. That's what really matters, for we should look at the quality of the transfers themselves and at their real economic effectiveness.
We are clearly in need of a federal structure, which means to apply the principle of transferring to a higher level only that which cannot be efficiently executed at a lower level. Here is where I must stress the importance of political balance.
So, the regulation and distribution functions must still be strengthened at EU level.
I have claimed in this blog and elsewhere that EU negotations on budget ara always reduced to a mere matter of acounting, based un the "juste retour" concept by the Member States. Besides, the current budget (barely 1 % of EU-GDP) is clearly insufficient, it cannot offer any support to economic activity or macroeconomic stabilization.
The core problem is that the EU is not a full political system, for it is not responsible for the provision of essential public goods, such as defence, justice, social security and so on, this is why members balance costs and benefits in more narrow terms than in a complete political system.
In this blog I will write a lot on this issues and I'll try to offer solutions with institutional content.