Council voting power affects EU budget shares

This paper examines the determinants of power in the Council of the European Union. It argues that quantitative power indices stemming from voting theory provide a good description of the actual distribution of power among EU members. Of course, we cannot directly verify the accuracy of such indices since it is impossible to measure power directly. Instead, we evaluate whether these power measures explain a quantifiable manifestation of the exercise of power, namely members' share of EU budget allocation. Our empirical analysis is based on 1976-2001 data on the patterns of the EU budget shares and on measures of each member state's needs and political power. Using our best voting power measures, we find that as much as 90 percent of the budget shares are explained by members' voting power in the Council of Ministers. We conclude that power politics can explain a major part of the Council decisions and that correlated preferences and voting cooperation between EU countries potentially play significant roles in the EU decision-making. Given these results, it is easy to see why the Constitutional Treaty's voting reform was such a sticky issue. For example, our research suggests that the large losses in power that Spain and Poland accepted in the Constitutional Treaty rules will result in a substantial reduction of EU spending in these nations. Likewise, the very large increase in power that the CT voting rules grant to Germany are likely to result in more spending on German farmers and backward regions Economic Policy publishes papers from first-class economists debating key international economic issues in commissioned studies, presented without technical jargon. The Social Science Citation Index ranks Economic Policy as one of the top 7 economics journals in the world. ### by Heikki Kauppi and Mika Widgrén For More Information, Contact: Philippa Sumner Blackwell Publishing 44-0-1865-476259 philippa.sumner@oxon.blackwellpublishing.com http://www.blackwellpublishing.com For more information about Economic Policy visit http:www.economic-policy.org.

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