This study is motivated by the puzzle of diminishing gains in the European Union budget bargaining for governments with a Eurosceptic domestic audience, even as Euroscepticism is increasingly represented in national legislatures. Engaging literature on fiscal federalism in the European Union and the institutionalist politics of its budgetary process, we argue that European integration diminishes the ability of member states’ governments to leverage Euroscepticism to extract concessions from the European Union budget. This is because Euroscepticism is becoming less exceptional, and greater differentiation in integration reduces the will to reward those seen as systematically less committed to integration. Running panel-corrected standard errors regressions on Operating Budgetary Balances since 1977, we find that in intergovernmental bargaining, domestic popular Euroscepticism is an advantage, but parliamentary Euroscepticism is not.
- fiscal transfers