This challenge offers the EU-27 an opportunity to rethink the way the budget is allocated. A document published jointly last week by the finance ministers of Italy and Germany offers one useful blueprint. They argue that the EU should spend more on European "public goods" -- areas of spending identified as in the interests of the whole union.
In their most clear-cut form, these spending items share two characteristics: They are what economists call non-rival and non-excludable. To put it simply, one country's or person's consumption doesn't affect another's. Furthermore, it is impossible to exclude countries that have not paid for them from using them.
Spending to foster European defense and to patrol the EU's external borders are two straightforward examples. More efficient checks in the Mediterranean Sea could help the whole of the EU manage the inflow of refugees. Asking one member state to fund this effort alone is unfair, since the benefits will inevitably trickle down on all European partners. While there is already some EU funding for these tasks already (for example, via the European Border and Coast Guard Agency), it is patently insufficient, leaving countries such as Italy to shoulder a disproportionate share of the total costs. [...]
Recipient countries should also be compliant with other EU objectives, including showing solidarity in managing migration inflows. Some in Germany have gone even further, arguing that "cohesion funds" should be linked to respect of the rule of law and democracy. These ideas have already proven controversial with Eastern European governments, but they make a lot of sense: If you benefit from transfers from other members of a club, it is only fair that you play by the rules.
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