I adopt a narrow definition of EU tax, to include those over which the EU exerts both legislative and revenue authority. In fact, the use to define national taxes that are subject to harmonization as EU taxes is limited, as parts of the legislative and revenue authority remain with the Member States (Waldhoff, 2016).

However, the EU budget has always been primarily funded by resources collected pursuant to a deliberative process that is eminently determined at Member State level. For instance, in the EU, the VAT Directive sets the general framework for VAT rates. Within this framework, it is up to each Member State to set the specific rate and the categories of supplies to which each rate applies. The link to the EU budget is made through the application of a uniform rate capped at 1,4 % of the VAT base, limited to 55 % of GNI. Other national contributions result of the application of a uniform rate to the GNI of each Member State, to be set within the framework of the budgetary procedure (De Feo and Laffan, 2016: 6).

The exception to this is to be found in the customs duty, regarding which the EU has its own right to tax as it retains the sole legislative authority as well as its revenue. Moreover, such an amount is then passed onto the price of imported products, which is paid for by consumers. This constitutes an indirect tax.

Hence, it follows that the Union already levies taxes, even if only in the realm of commercial policy (Waldhoff, 2016: 154) which contradicts a commonly held conception that taxation is a matter of exclusive Member State competence. Therefore, the question is not whether the EU can levy taxes on its citizens, which it can and already does, albeit based on a specific supranational policy. Rather, we should inquire whether the EU has the competence to lay taxes of general nature for EU citizens.

Art. 113-115 TFEU entrust the EU with broad competence to approximate national laws to ensure the proper function of the internal market, including the area of taxation (Kokott, 2022). While art. 113 TFEU expressly covers indirect taxation, art. 115 TFEU allows the adoption of directives for the purpose of harmonising fiscal provisions, including in the area of direct taxation, to the extent that it directly affects the establishment or function of the internal market.

Although there are scholarly contributions suggesting that these can serve as a legal basis for EU levies (Lindholm, 2023) as was the case in past European Commission proposals (European Commission, 2018a) it is, in my view, doubtful that these Treaty provisions are proper to pave the way for the implementation of (direct or indirect) taxes directly accruing to the EU budget. The harmonisation of national tax laws could be relevant to financing the EU budget if, for instance, the Union intended to keep a share of the nationally-raised revenue of these taxes.

While this route could be useful in specific areas, notably digital companies or financial services, in which mobility of tax subjects is high, it is difficult to envisage a similar solution regarding citizens. First, broad tax harmonisation would hinder the consequentiality of national electoral processes as well as ongoing political debates, as it would constrain Member States’ ability to freely define their taxation policies, an important matter to polities. Second, given that all EU budgetary revenue is defined by the Own Resources Decision (ORD), it is difficult to envisage a solution that would skip the application of art. 311 TFEU.

In the literature, there is significant support to the view that article 311 TFEU does not in itself constitute a competence base for the introduction of an EU tax via secondary law (Waldhoff, 2016; Cipriani, 2016; Barreau; 2023). This perspective is also adopted by the German Constitutional Court, which stated, in its Maastricht judgement, that the Union must be regarded as a compound of States that does not possess a legitimising community of its own. Rather, the people of Europe primarily legitimise themselves by their respective national parliaments and, complementary, by the European Parliament. Nonetheless, Waldhoff goes one step further by accepting that art. 311 TFEU may encompass a new own resources decision introducing direct taxes as a new own resource (Waldhoff, 2016).

From my point of view, there is no reason why art. 311 TFEU should not be considered a valid Treaty basis concerning the financing of the EU, namely for levying general or specific EU taxes (Plasschaert, 2004; Begg, 2011; Motte, 2014) understood as those over which the EU exerts legislative authority, thereby defining them independently of national legislatures. Own resources is, indeed, a suitably indeterminate concept to encompass a range of revenue of a very distinct nature, be it national contributions or taxes.

Therefore, the problem is not with the concept itself but with the elasticity we permit in its interpretation. However, that does not mean that the legal basis does not exist. It merely begs the question of whether we should interpret it more broadly. As will be further explored below (section 1.3), the Union originally envisioned by the Treaty — and much in the mind of the German Constitutional Court — was one predominantly influenced by Member States. In contrast, the TEU recognises the existence of a direct connection between the Union and its citizens.

Taxes are generally used to further the values of each society (Antón, 2023: 35). Art. 2 TEU recognises the values shared by Europeans. These values are the basic underpinning of the legitimacy of the EU and, from an institutional standpoint, have allowed it to be more than an international organisation, albeit short of a nation-State, with competences that impact the lives of its citizens from internal and external perspectives.

Internally, the EU has the capacity to legislate in a vast array of areas, notably the single market. Ironically, integration on this front has proved to be a challenging force for the principles of subsidiarity and proportionality. As Member States increasingly interconnect economically, the most effective decision-making locus in the management of externalities-based problems is not the national but the EU level.

Externally, the EU has the potential to further its citizens interests more effectively than any Member State acting individually, primarily as a result of its economic weight (Zhimin, 2012; Watt, 2023) as recognised by the establishment of the common foreign and security policy.

One way to correct the minoritarian bias in EU economic and budgetary policies is to change the voting threshold in the ORD and MFF from unanimity to majoritarian rule (Boissenin, 2020: 147). Indeed, a lower threshold of approval reduces the skewed distribution of power each Member State possesses under unanimity rule, which could prompt a better alignment of some Member States with citizens’ preferences. As majoritarian influence grows, we can get a countervailance between forces and political outcomes that are more balanced (Komesar, 2013: 297).

Be that as it may, formal rule changes can run afoul of informally established decision-making processes (Komesar, 2014: 43). In fact, there is evidence that the logic of consensus prevails in the European Council and Council, regardless of majoritarian rule (Van Middelaar and Puetter, 2022: 51). A possible explanation for this phenomenon may be that “[m]ost legislators […] are not motivated by resource allocation efficiency and the political process is subject to severe political malfunctions such as minoritarian bias and the associated costs of rent seeking” (Komesar, 2013: 304; Buchanan and Tullock, 1962: 217). Therefore, we cannot expect that changes in the voting threshold per se will necessarily lead to a (significant) change in national governments’ behaviour in the supranational institutions.

Importantly, European citizens’ current political participation does not seem to be enough to reduce the skewed distribution of stakes in the EU political process. Paradoxically, more access to the decision-making process, per se, may not solve but rather aggravate problems of participation, as its dynamics depend on the costs and benefits with which it is associated. If the individual benefits of most people are low, either because they are highly disseminated or because there is an insufficient degree of information, then participation decreases, hence making the political process more prone to concentrated interests (Komesar and Maduro, 2014: 21). Indeed, EP elections are traditionally associated with low turnouts and reduced mobilisation of the European electorate, possibly as a result of the lower level of importance this institution is entrusted with regarding budgetary issues and EU economic policy in general (Cabannes, 2019).

In addition, the so-called technocratic, apolitical form of governance pursued by the European Commission is, in itself, a feature that hinders participation, worsening this state of affairs. However, even if the dynamic of intergovernmentalism would change, that is, if removal of the unanimity voting threshold regarding ORD and the MFF would resolve the issue of minoritarian bias, the Union would still have to deal with other problems, namely the fact that the budget was small in size, which largely contributed to its reduced visibility.

The problem is not so much legal as it is political (Lindholm, 2023:3) as taxation is highly connected to State sovereignty. In this vein, some authors strike a note of caution. In their view, the bond that is necessary in order to form a European demos is lacking (Weiler et al., 1995; Kaufmann, 2014: 280; Weiler, 2017: 366; Cafaro, 2023: 33). Hence, the EU must be legitimated by a dual structure in which Member States, not its citizens, must be considered central reference points (Grimm, 1995; Waldhoff, 2016: 157; Lehner, 2020: 23).

Importantly, then, the current conception is that taxation powers are linked to national budgets because they reflect national sovereignty and identity, which Member States want to preserve. Therefore, the underlying teleology of the Treaties is necessarily restrictive in its interpretation of the concept of own resources enshrined in art. 311 TFEU.

In this regard, it is also important to recall that, similar to the US, the EU was created by sovereign States. Resembling the EU Treaties, the US Constitution was a compact between the people of the different States, not as one nation. Rather, it was a unanimous assent of the signatory States.

However, similarly to other federal unions of States, the European unification project must be understood from the moment of its inception “on the basis of the fundamental wish for political autonomy on the part of its founding states and their incapacity to […] secure this autonomy as fully independent states” (Larsen, 2021: 62). Thus, EU integration has entailed a fundamental transformation, entailing a process of transformation from nation-State to Member State, and not a zero-sum, multi-level struggle over sovereignty (Larsen, 2021: 82). The outcome of this consciousness is the sense that accomplishing a certain set of goals — for instance, security, stability or citizens’ welfare — is only conceivable together.

In the EU, the path to achieving these objectives was made possible by guaranteeing peace through economic prosperity and the integration of States through the four freedoms (Schelkle, 2009: 830; Barnard, 2022). As a result, supranational activity on free movement and internal market completion have fostered a sense of union between citizens, a dynamic societal process, which has been recognised by Member States in the Treaty changes that have taken place overtime.

While the single market was more sensitive to arguments of an economic nature, monetary union was more prone to political considerations. In this regard, Marjolin and Delors’ reports highlighted that the euro was an important endeavour to European unity, notably if Member States wanted to continue to play a role in world affairs and ensure their own protection, given that only unity could restore the influence they had lost (European Commission, 1975: 1; Delors, 1989). In other words, once peace and the seeds of economic integration were laid down, the Union started looking not only inwards but outwards, in an evolving sense of Member States’ self-preservation through the Union by resorting to integration with increased political significance. Therefore, this evolution is a clear expression of the double telos of federations, which is generally based on the principles of independence and interdependence (Benz, 2011: 11).

This increased bond does not, however, peril diversity in Europe. Neither should there be fear that homogenisation endangers the integration process: acknowledging the autonomy of Member States as a defining feature of federations (and that of the EU), it is necessary to conclude that respect for the diversity of its citizens is an intrinsic characteristic of the system (Waldhoff, 2014: 127-128). In fact, it must be seen as a necessary condition for its broad societal acceptance.

As important as respecting diversity is, we should be mindful that the coexistence of unity and diversity in the federation is based on the condition of a certain degree of homogeneity between its Member States. For this reason, Member State autonomy is constrained by the EU’s constitutional identity, as established in art. 2 TEU. In other words, while diversity is a feature of federations, the degree of difference may not be so wide as to make them differ significantly on a fundamental level: the federation should be composed of States of the same nature (Montesquieu, 1989: 131) if it is to preserve a minimum level of unity, such as shared materials interests (i.e. the defence of welfare) and uniform civilization (Tocqueville, 2021: 270).

In this vein, preference heterogeneity and cultural diversity are significantly more acute within Member States than between Member States. In fact, there may be more similarities between regions of Member States (i.e. northern Italy and southern Germany) than between national regions (i.e. northern and southern Italy). Moreover, the differences between the citizens of EU Member States are not greater than those that exist between the citizens of US States (Alesina, et al., 2017: 171). Therefore, it is legitimate to ask, if democracies in (each of the) EU Member States and the US can handle substantial diversity, why the EU (as a whole) could not cope with a similar level of heterogeneity?

Moreover, EU constituent power is not held by Member States alone, as it is shared with EU citizens. As Habermas argued (Habermas, 2011: 36-39; Calliess, 2011: 19), EU citizens are a democratic sovereign, holding a double capacity in the exercise of constituent power, both as citizens of their Member States and of the Union. Therefore, the division of sovereignty would not treat Member States and the EU as different subjects, but as two capacities of the same subject (i.e. the citizens in their legitimating role of different democratic levels). As a result, by coming together in a federation, “Member States give birth to a new political association that is autonomous from them. A federal union of states is different from the sum of its parts” (Larsen, 2021: 105).

Hence, the EU, as a Union with federal features (Forsyth, 1981: 183), cannot be considered as subject to its Member States, as it has a direct responsibility vis-à-vis its citizens. From this perspective, the adoption of the euro is as much an expression of this commonality as is a need to adjust the legal framework to better reflect this. It also expresses the contradictory nature of federations in their attempts to be conservative (by preserving the diversity and identity of its constituent States) and forward-looking (a future that Member States can only envision being united). In turn, this unity presupposes a reconciliation of divergences between States and peoples, which creates an enduring tension that must be channelled through democratic and integrated procedures in a way that restrains the States’ powers in the federal setting.

In other words, the Union originally envisioned by the Treaty was one of Member States, in which citizens were indirectly connected but also partitioned along their respective States of origin. In contrast, the TEU reflects a significant evolution, whereby Member States recognise the existence of a direct connection between the Union and its citizens: increasingly, citizens bond with the Union despite Member States and not only because of them (Habermas, 2011: 48). As in US constitutional history, the main difference between the Articles of Confederation and the 1787 Constitution is that the latter is primarily focused on individuals and not on States.

Be that as it may, a broader exercise of the power of taxation at a supranational level is at least as contentious an issue as was the introduction of a common currency, given that Member States traditionally consider that budgetary and the correlated issue of taxation should remain a matter of exclusive competence (Farri, 2023: 83). In fact, Member States’ experience with the creation of monetary union shows that, when sovereignty issues are at play, economic soundness is a necessary but ultimately insufficient condition to bring about substantial change. Therefore, it is not enough to rely on concepts such as fiscal federalism, efficiency and economies of scale in order to achieve integration in EU budgetary and fiscal realms.

Notwithstanding, conferring the power to “collect taxes on the EU would not hinder Member States’ prospects of using taxes for their democratically established ends. Member States, as the primary sites of the European taxpayer’s social and economic ties, would retain their power to tax alongside the EU and they would still be allowed to use taxes for various fiscal and redistributive purposes” (Jaakkola, 2023: 75).

Importantly, since 2008, Member States have dealt with an increasing array of crises for which an EU response was ultimately necessary. This shows that, in its current state, the EU already adds significant value to the Union and Member States’ polities. Crucially, it also signals potential to increase its role which is, in itself, a factor to consider in the legitimacy to lay and collect taxes (Jaakkola, 2023: 76). The EU budget is at odds with these developments, as it still depicts a Union of fully sovereign, autarkic States with connections purely based on, and limited to, economic interests broadly based on national concerns, progressively transforming the EU budget into an anachronic instrument (European Commission, 2016: 15; Crowe, 2017).

In my view, citizens’ perceptions regarding the EU budget are mostly a result of the current setup of expenditure. As the overall amount is small, visibility is reduced. Hence, people perceive their respective national public spaces as the most effective spaces in which to perform political debates and as most relevant regarding budgetary choices. This is the reason that most aptly explains the general perception that the EU budget delivers poor value-for-money (Cipriani, 2014: 75) and the ensuing fear that the introduction of a tax-based revenue stream could become contentious.

Most importantly, however, on a conceptual basis, the EU budget should not be a mere redistributive instrument between Member States, as it currently is. Instead, it should work as a tool to internalise commonality in the EU and give it a more concrete expression to which people can relate with.

More than a budget, it should be an instrument to bolster voice in EU citizenry, whereby people can have meaningful debates, exercise their choices through consequential vote and pay for those choices. Crucially, the nature of expenditure is inextricably linked to the nature of revenues. Therefore, if expenditure is mostly invisible and misaligned with citizens’ priorities, they will not be willing to finance it.

Accordingly, the focus on each tax at a supranational level should be on the incentives granted for citizen participation in their polity to counter minoritarian bias in EU economic and budgetary policies. In an intergovernmental system of governance, such as the one currently in force in the EU, that means that each government fosters the interests of their own population (each of them minoritarian vis-à-vis the EU population as a whole).

From this perspective, indirect taxes (i.e. value added tax, EU Emissions Trading System, plastic and fuel) or direct taxes with a narrow scope of application (i.e. multinational enterprises, financial transaction tax, high incomes and wealth) lack sufficient powers of mobilisation of EU citizenry due to their relative lack of visibility.

In my view, it follows that broader direct taxation of the Union’s citizens is necessary to entail mobilisation and could be a less imperfect alternative, which delivers a better balance, namely on economic policy, both from a governance and societal point of view. It would also cause the nature of EU integration to change fundamentally. Through direct taxation, European citizens would not only connect with the Union but also between themselves in a process that I would designate the horizontalisation of the Union. If we look at the experience of the US in order to shed some light on the potential democratic impact, it would significantly increase participation in the political process.

If this understanding is correct, EU citizens’ voice (Hirschman, 1970; Weiler, 1991) would be reframed. On the one hand, the introduction of direct EU taxes to European citizens would prompt the increase of political participation, thereby creating the conditions to break the vicious circle of nationalistic juste retour, linking funding to citizens as a way to promote participation sequences concerning policy options. On the other hand, Member States should regain their economic policy autonomy, thereby re-establishing the value of citizens’ vote in national elections.

Instead of the vertical link referred, whereby an attempt is made to enhance supranational legitimacy by procedural means, fiscal restrictions and surveillance are adopted to avoid the transfer of resources between States. While arguably allowing monetary financing to occur, the EU would be in a situation in which it could deliver equal treatment for equals. Ultimately, resource legitimacy should be the main factor in choosing resources. Thus, citizens, rather than States, ought to be the main source of revenue.

There are, essentially, two models of expenditure in the Union: one performed by the Union budget and one performed outside it. The stabilisation function is by and large conducted by the latter, mostly by way of the European Stability Mechanism (ESM) and within the context of a financial emergency, which can be characterised as a response to a threat and, therefore, a form of federal constitutional defence.

Although crucial to the survival of the federation, the process of verticalisation introduced a strong unitary element (Larsen, 2021: 149; Fabbrini, 2025) which creates a paradox in the EU. In fact, many of the arguments against further fiscal integration rely, in essence, on the need to preserve national constitutional identities and the idea that the differences among the peoples of Europe are so wide and insurmountable that a pool of fiscally derived resources would put that at risk. How, then, can Europeans accept a unitary element of governance, present in complex periods (i.e. ESM) as well as on an on-going basis (i.e. the economic governance framework in force)? And, crucially, it is in more difficult situations that institutions perform worse. If this assumption is correct, then a vertical system of governance, especially in emergency situations (i.e. asymmetric shocks), risks hindering diversity and national identities, potentially pushing the Union to recurrent situations of inter-State tension and social conflict.

For this reason, as the example of Germany shows (Kumm, 2013: 16) it is undesirable to place States in a position of equal fiscal ability through a system of intergovernmental transfers, as highlighted by Buchanan (Buchanan, 1950), Niskanen (Buchanan and Musgrave, 1998: 195; Ahmad and Craig, 1977: 82). However, that is not the case with people, to whom the principle of equality, established in art. 2 of TEU, should demand differentiation in treatment by taking into account the degree of citizens’ economic and social disparity, regardless of their state of residence.

Consequently, through its budget, the EU could treat equals equally, not to ensure an equivalent standard of public services across Member States, but rather to offset the divergencies in the income and wealth levels within them. An understanding, such as the one I propose, would, I believe, positively address the “poisonous tree” of European integration, which is the concept of the creation of a transfer union between States.

Union equity transfers to individuals would represent neither the subsidisation of some Member States nor charitable contributions to less financially well-off people. Rather, they would be necessary adjustments to keep the Union together and, as such, ethically owed to lower-income citizens. Therefore, potential inequities in the treatment of equals would be due to Member States’ autonomous political decisions, unrelated to citizens’ State of residence. In other words: equal treatment for equals is a value superior to that of equalisation among organic State units (Buchanan, 1950: 591).

The question then becomes: why should federal financing supersede supranationally mandated standards to be implemented at Member State level? Federal financing focused on citizens would be better than the alternative because adjustments between people living in different Member States should be an EU-wide concern, as evidenced by the EU’s principles of equality and solidarity. In fact, this dynamic is also visible within each Member State, which denotes that solidarity between citizens is a widespread value, not confined to a few States. Of course, this does not necessarily imply uniform benefits, on the one hand, or exclusive supranational administration, on the other.

Such an approach would entail several major advantages, by increasing foreseeability, transparency, effectiveness, the accuracy of citizens’ expectations and the altering of inaccurate perceptions. First, it would detach potential future programmes that resemble Next Generation EU (NGEU) from the occurrence of emergency events, making them more likely to be foreseen and, as a result, enhancing the Union’s economic stability. Second, it would favour transparency, given that budgetary functions would not be mixed (i.e. in order to further certain EU policies, there would be no need to devise unrelated requirements, such as falling unemployment rates or GDP losses, as in NGEU, in order to provide some States with more funding) (Fuest, 2021: 91). Third, it would increase the effectiveness of the EU budget regarding its stabilisation function, while redirecting national budgetary resources to different areas. Fourth, the mismatch between citizens’ expectations and what is delivered by the EU is increasing, which means that indirect taxes will probably be insufficient to substitute current national contributions to the EU budget, a fortiori they will be unable to fund programmes such as NGEU or genuine EU policies. Fifth, it offers the ability to correct citizens’ perceptions regarding inter-State financial relationships, namely dominance on the part of the most economically robust Member States and, conversely, subordination and guilt on less economically robust ones (Kumm, 2017). Finally, dependent on the definition of a clear set of competences between the supranational and national level governments, it would not over-harmonise economic policies with an encompassing top-down approach, thereby respecting diversity in the Union.

In order to bring this conceptual framework into place, however, one needs to take the EU budget’s expenditure structure into account. As I have endeavoured to show, there is a fundamental link between the nature of revenue and expenditure. If that is so, then the proposed change to the former should only be adopted if a change to the latter is adopted. Indeed, it would be incongruent and, ultimately, indefensible, to argue for direct taxes on EU citizens while maintaining the current spending structure.

In attempting to propose institutional changes to address minoritarian biases in EU economic and budgetary policies, it is necessary to keep in mind that the issue might not be tackled correctly. In other words, in my attempt to deal with the verticalisation problem, whereby national institutions and national interests are the primary focus, namely in the European Council, one needs to caution against the transfer of biases phenomenon from these institutions to other European institutions. For instance, some authors argue that the European Parliament should have a prominent, leading role in the budgetary process, including in the revenue realm, because they see this as embodying EU-wide legitimacy, hence bringing about an integrated view on the issues (Motte, 2014: 147; Lehner, 2020: 38).

Although conceivable, one should not take that conclusion as a straightforward way to resolve the issue. In fact, Members of the European Parliament (MEPs) have local constituencies and may be interested in Union spending for their constituents, especially if such expenditure has a high degree of visibility, hence neglecting spending on European public goods (Heinemann, 2016). Accordingly, we could merely be transferring biases from some institutions to others. In this case, such a transfer could very well be between minoritarian: from juste retour to so-called pork-barrel-spending associated with local constituencies in the European Parliament (EP). By primarily shifting our attention for this latter institution because of intergovernmentalism’s shortcomings, we could not only fail to successfully address the underlying problem but also hinder democratic expectations. In fact, it could possibly exacerbate the issue regarding a “transfer union” and entrench the EP’s nationalistic approaches over the supranational budget.

In order to counter the fear of the exploitation of the few over the many, there were proposals to largely maintain the current institutional system of competitive federalism, by keeping a decentralised power to tax concomitant with reverse revenue sharing (essentially, GNI-based funding). Drawing from the experience of the US, the main rationale is that “once a central government assumes significant control over the tax base of a community of subgovernments, it will invariably take on functions that are either best left to the subunits of government, or not worth performing at any level of government” (Buchanan and Lee, 1994: 228). From this perspective, the case against an EU Government’s power to tax is that this power has, historically, been frequently abused. Unless properly constrained, either formally or by competition, political power tends to overreach. Therefore, by confining taxation competences to the national level, special interest spending could be effectively prevented from spreading all over the Union.

Moreover, transferring the power to tax to the supranational level enables the forming and enforcing of a tax cartel, whereby additional revenue taken from different layers of government will do more than offset any reduction in collected revenue. On the other hand, a Federal Government capable of collecting significant revenue would see an increase in the demand of centralised spending from sub-national authorities, possibly directed towards areas of governance of the exclusive responsibility of the latter (Buchanan and Lee, 1994: 228).

However, reverse revenue sharing, as a way to keep autonomous national taxation power, has important limits in EU budgetary history, as the interpretation of national transfer and EU budgetary expenditure shows (Benedetto, 2019; De Feo, 2015). Indeed, projects with benefits that primarily accrue to the citizens of a certain sub-national or national jurisdiction should be approved and financed by their respective budgets. On the contrary, if the supranational level provides financing for local-added value projects, it would relieve national budgets from that expense but, most importantly, it would incur an opportunity cost from failing to provide community-wide benefits with these funds.

Hence, in order bring citizens and the Union closer, a generality principle should be attached to Union spending in order to ensure that majorities are required to approve expenditure able to generate value for every group of citizens, indistinctively, albeit in an indirect and diffuse manner (Buchanan and Musgrave, 1998: 26). In this vein, it is worth noting that most EU expenditures do not necessarily embody this direct link, as only a small portion of EU expenditure constitutes EU-added value spending.

Such a principle could substantially reduce minoritarian bias, either spending related to the allocation of funds or the stabilisation of the Union’s economy. Moreover, it would improve institutional independence while deciding on expenditure and, importantly, better safeguarding the democratic process of a federation of States by establishing a connection between the nature of spending and revenue.

If conceived in this way, the Union would be able to reconcile national and supranational interests, thereby expanding the scope of EU policies and favouring cross-national ideological majorities. Hence, citizens’ support of the Union’s decisions would not be limited to the right to vote, directly or indirectly, for EU representatives or leaders (Maduro, 2018: 355-356). These are necessary, but ultimately insufficient conditions. Rather, there is a need to develop what Weiler has designated a political messianism — that is the “promise of an attractive Promised Land” (Weiler, 2017: 365. In my view, in the context of the EU, a generality principle can better address output legitimacy as well as political messianism, just as the taxation of EU citizens can improve input legitimacy by leading to more quantitative (numbers) and qualitative (meaningful) participation in electoral and non-electoral moments in the EU public sphere.

Such a principle might not only counter minoritarian but also majoritarian bias. By its very nature, expenditure of this type would, necessarily, foster transnational divisiveness between citizens, as opposed to discord along national lines. Therefore, citizens’ voice would not be confined to the national boundaries and economic might of their respective Member States. Rather, citizens would be in the minority or majority of ideology in the EU public sphere, which is more volatile than the economic indicators that currently define Member States’ power.

Also, in this vein, EU expenditure would embrace two essential principles of fiscal federalism when placed in multinational contexts: non-centralisation and constituents’ autonomy (Graefe, 2021: 112). Regarding the former, by restricting spending to a generality requirement, centralisation at the federal level would be more difficult to instigate, as States are diverse and have distinctive local preferences. However, non-centralisation does not adequately capture the way in which the public policy development process shapes the polity as a whole. In fact, the exercise of governing in multinational and multilevel systems, necessarily, entails an identity assumption by the Federal Government and, therefore, places hurdles in the way of dealing with minorities. A generality principle could ease this effect.

Nevertheless, non-centralisation is not enough to deal with majoritarian bias — the autonomy of constituent parts is essential as well. This means that European economic governance increasingly constrains Member State autonomy concerning the exercise of economic policies. In multinational and multilevel contexts, autonomy is necessary in order to address different national societal needs. Accordingly, it is important for the different component units to be able to freely exercise their internal constitutional competences, unconstrained by the centre of the federation.

This circular dialogue between generality and stabilisation policies based on EU citizens, on the one hand, and non-centralisation and autonomy, on the other hand, should be the basis of the relationship between the Union, its Member States and their people. From the outset, EU integration has been shaped by these latter concepts. In other words, the budget should be maintained at a reduced level and Member States should be able to define, implement and execute their own economic policies largely autonomously. This approach was reversed during the financial and euro crisis, when the opposite emerged. In fact, EU economic governance became an exercise with a significant degree of administrative centralisation and dependence on supranational authorisations, depending on the level of financial distress experienced by different States.

Finally, EU expenditure would be supported by taxes decided at supranational level and paid for by EU citizens, thereby establishing a more adequate framework for debate from a fiscal and democratic standpoint. A Union of proxy politics is, indeed, the way to grasp the promised land, given the difficulty in aiming for great results from a small (nation-State) perspective in an interconnected world. Importantly, however, such proxy politics can only be initiated, from my point of view, if there is an adequate fiscal and budgetary framework to provide an adequate basis for dialogue.