The European Union - The Political Geography of Inequality - page 67

4
The European Union
Economic Geography and Fiscal Structures
under Centrifugal Representation
European Union specialists note regularly that Brussels is gaining a prominent
role in shaping the policies of the member states. However, there is an impor-
tant exception to this trend: fiscal policy (B orzel 2005 ). Direct income taxes
and transfers remain local in the EU despite the fact that labor regulations,
VAT, trade policy, citizens' mobility, agricultural production, and monetary
policy, among others, fall under the grip of EU officials. This imbalance became
particularly apparent in debates over the proposal for a European Constitution
in 2004.
From Rome (1957) to Lisbon (2009), European social policy has been char-
acterized by numerous programmatic statements and open-ended prescriptions.
Without the unanimous consent of the EU's members, these initiatives have had
little practical impact. However, although there are no policy mechanisms for
interpersonal redistribution implemented from Brussels, there are a number of
initiatives that redistribute resources between countries. Considered together,
these programs of interregional redistribution - such as structural funds -
account for much of the current EU budget.
Why have so many EU policy realms integrated, but not interpersonal redis-
tribution? Why do the few instances of redistributive effort within the EU take
the form of interregional - or intercountry - transfers? In addressing these
questions this chapter serves two purposes. First, it provides a detailed analysis
of the way economic geography shapes preferences and choices concerning the
centralization of interpersonal redistribution in a context of centrifugal rep-
resentation. In doing so it provides an analysis of one of the extremes in the
centrifugal-centripetal representation continuum and contributes to the testing
of one of the leading hypotheses in this study, namely that under centrifugal
systems of representation, cross regional differences in terms of inequality and
risk translate directly into the adoption of decentralized systems of redistri-
bution (H.2.A). In addition, by developing a study of how economic geogra-
phy shapes individual preferences for the centralization of redistribution, this
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