In Brussels on Friday 27 January, several EU finance ministers expressed the view that the current system of own resources is working well.
The report of the high-level group on the own resources of the EU, for its part, takes the view that certain existing own resources have proved their worth, but it would be sensible to create new ones (see EUROPE 11701).
The very least that can be said is that the members of the Ecofin Council did not show a great deal of enthusiasm to change the system of own resources of the EU. As unanimity is required in Council on this matter, any reform of the system of EU own resources is likely to be extremely difficult.
The former Italian Prime Minister, Mario Monti, presented the Ecofin Council with the results of the work of the high-level group on own resources of the EU. 14 delegations took to the floor to react to the conclusions of the report (France, for instance, did not speak).
Poland opposed the idea of creating new own resources, whilst Finland was very receptive to the ideas expressed in the 'Monti report'.
The Swedish, Croatian, Polish, Latvian, Greek, Danish and Dutch ministers said that the current system works well. Germany feels that the current system does work, but could be streamlined. A number of countries (Hungary, Romania, Croatia and Greece) asked to reform or get rid of the own resource based on VAT. Some of the so-called cohesion countries, such as Romania, Hungary, Latvia and Greece, called for the traditional policies to be kept in place. Hungary also defended the common agriculture policy.
Germany said that the report was a good basis for the forthcoming discussions. It will be necessary to go into expenditure and revenue in greater detail once the EU has prepared the forthcoming multi-annual financial framework (MFF) of the EU. This delegation argued in favour of examining how a better link could be established between own resources and European policies. Readers may recall that Germany belongs to the group of countries wishing to establish an enhanced cooperation to bring in a financial transactions tax. The revenue from this tax could feed into the EU budget (see EUROPE 11712).
Berlin says 'no' to a separate budget for the Eurozone
Germany also said that the expenditure of the EU budget did not reflect the current priorities of the EU and recommended focusing expenditure on policies with added value. Nor is Berlin in favour of a separate budget for the Eurozone (see EUROPE 11711). However, this country (and Denmark) is calling for a clearer link between expenditure and implementation of the country-by-country recommendations. Furthermore, Germany (and the Netherlands) recommended building more flexibility into the EU budget to allow it to respond to growing uncertainties.
Disagreements over rebates. The Netherlands feels that the system of rebates should be kept in place after 2020 in the event of excessive charges for certain countries. Sweden believes that they should be kept in place where justified. Several countries (Romania, Hungary, Croatia and Greece, in particular), on the other hand, called for the rebates to be abolished.
After this exchange of views, one might conclude that the traditional own resources and own resources based on gross national income (GNI) may continue to exist after 2020. The VAT-based own resources could be reformed (or removed altogether), along with most of the rebates (it is worth noting that the British rebate will go once the UK leaves the EU).
The Maltese Presidency of the Council acknowledged that the subject was a sensitive one and the work was by no means completed. Edward Scicluna, the Maltese finance minister, said that the Commission would take inspiration from the work to present its proposals, at the end of 2017, on the post-2020 MFF and a possible reform of the own resources of the EU.
Addressing the Ecofin Council, Monti stressed that the aim of the recommendations was to make the budgetary debate at the Council less "toxic". He said that his suggestions would not require either treaty change or an increase of the EU budget. (Original version in French by Lionel Changeur)