Brussels, 04/04/2011 (Agence Europe) - On Wednesday 6 April during a press conference in Strasbourg, three MEPs, Alain Lamassoure (EPP, France), Guy Verhofstadt (ALDE, Belgium) and Jutta Haug (S&D, Germany) will present a number of proposals. These proposals will take into account member states' budgetary problems and constitute a serious shakeup in the EU funding system, which is currently over-dependent on contributions from member states. The MEPs are calling for a return to “the spirit and letter of the Treaty of Rome” (promoting greater financial autonomy), the abolition of the GNP (Gross National Product) contribution, which currently accounts for three quarters of the EU budget, and its replacement by a European VAT rate, a carbon tax (€38.4 billion in revenue) and possibly a European tax on the financial sector. These three MEPs also advocate the launch of euro project bonds.
The European budget was initially funded by its own resources but has increasingly had to resort to national contributions and thereby subject itself to the demand of “fair return”. According to the three MPs, the European Union funding system is “agonising” and they call for a significant shakeup in the system so that the EU budget is reconciled with the role which it should play of providing solidarity, in order to guarantee a strong economic recovery and to enable the EU to meet its future challenges. According to the MEPs, fully funding the European Union with independent sources of revenue is the only way to put an end to the fair return approach. They consider that such a radical change is possible and that it is mainly a question of political determination.
They advocate three different areas of introducing reform: a radical change to the system of own resources, the creation of European project bonds to finance investments for huge European infrastructures, and more synergies and budget rationality to make savings.
A European VAT rate would provide a significant resource to the EU budget explained Alain Lamassoure, Guy Verhofstadt and Jutta Haug. The European Commission considers that a 1% rate, combined with the abolition of current VAT resources, could fund almost half of the EU's budget, €57 billion out of the total EU budget of €126.5 billion, according to figures highlighted in the three MPs' working document. A European VAT rate should also provide a relatively stable source of funding for the Community budget.
The three MPs consider that the carbon tax would possibly generate €38.5 billion and that the tax on the financial sector would generate revenue of €10 billion. This would help to reduce CO2 emissions and regulate the financial sector.
The proposed reform of the funding system would benefit member states because it would help them to reduce public spending and help European citizens because the system would become more visible, simpler and more transparent.
On 29 June, the European Commission is expected to adopt its proposals on the next financial framework, including the area of own resources. (L.C./transl.fl)