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The Fiscal Role of the European Union: The Case of Housing and the European Structural Funds

Department of Urban Studies, University of Glasgow, 25 Bute Gardens, Glasgow, G12 8RS, UK, M.Stephens{at}socsci.gla.ac.uk

This paper examines the potential for the European budget to be used to contribute to housing investment. It finds that the budget is sufficiently large to play a role in the countries where the budget is concentrated, although it could be made more progressive. Case studies reveal that the current 'allocative' purpose of the Structural Funds, combined with a misinterpretation of 'subsidiarity', largely prevents their use for housing investment. Together with the principle of 'additionality', the current budget rules are shown to have the potential to cause 'welfare waste', which could be relieved either by moving to a wholly redistributive budget or by amending existing rules to allow funds to be used for housing investment when this contributes to economic regeneration.

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