The draft 'Olbrycht/Thomas' report, as adopted by the committee on budget of the European Parliament on Thursday 22 February, on the eve of an informal European summit, recommends a post-2020 multiannual financial framework (MFF) at a level of 1.3% of gross national income (GNI) (see EUROPE 11966). The MEPs call for new own resources, making it possible to reduce the national contributions to the EU budget by the same amount.
According to Jan Olbrycht (EPP, Poland), this is the Parliament’s response to the questions put by the President of the European Council, Donald Tusk, to the European leaders: yes to new political priorities (migration, security, defence), but we absolutely must continue to pay for the traditional priorities (the Common Agriculture Policy and cohesion policy – see other article).
To guarantee this objective, the expenditure ceilings must be increased to 1.3% of GNI, the MEP said. Olbrycht also asks the European leaders: “if you don’t agree with this, tell us where we should make the cuts”.
Isabelle Thomas (S&D, France) stressed that the MEPs would not stand by and watch the budget be reduced again. She referred to the paradox in which the budgetary gap related to Brexit would make it impossible to increase the MFF, whereas previously, the United Kingdom as a member of the EU blocked any initiative to raise the ceilings.
Conditionality. One compromise amendment suggests sanctioning member states infringing the values of the EU (article 2 of the Treaty), without financially penalising the end beneficiaries of European co-funding.
“We are calling on the Commission to work towards a fair mechanism that will sanction member states in contravention of article 2 of the Treaty. This mechanism should not affect those who are not responsible for the government’s flouting of the rule of law”, Thomas confirmed. The idea is to sanction the governance and governments without sanctioning the people, said Jean Arthuis (ALDE, France).
Own resources. Like the draft report on the post-2020 MFF, the report on the own resources of the EU budget by Janusz Lewandowski (EPP, Poland) and Gérard Deprez (ALDE, Belgium) received the support of an overwhelming majority. In particular, it calls for Brexit to be used to leverage the end of all existing rebates.
Lewandowski said that “the current system is complex, non-transparent and promotes the budgetary logic of ‘juste retour’, where member states try to get as much out of the budget as they put in”.
Comparing the EU budget to a “monster that is incomprehensible to the citizens”, Deprez said that with regard to the treaties, the EU budget should be fully paid for out of own resources.
The MEPs consider that new own resources for the EU budget could come from revenue from corporate taxation (CCCTB), the taxation of the digital sector, reformed VAT, the fight against tax evasion, the ETS carbon quotas market and environmental taxes (carbon tax on the borders, on plastics, petroleum products, road, air transport) (see EUROPE 11944).
“We have managed to convince the Liberals and Christian Democrats of the value of a tax on the production of plastics”, said Helga Trüpel (Greens/EFA, Germany).
Another compromise amendment fleshes out the potential contribution of environmental taxation to the EU budget. The ETS carbon quotas market is referred to explicitly as a potential own resource, with compensation in the form of additional European funding for countries such as Poland that would have to put more in.
However, the volumes of a resource of this kind, in a European economy that will be less and less carbon-based in the future, will decrease over time, a Parliamentary source stated.
Currently, the EU budget is fed into as follows: 69% comes from the GNI-based contribution, 13% from the traditional own resources (customs duty, agricultural duty, ‘sugar’ quotas), 12% from VAT revenue, with the rest from tax paid by EU employees and fines for competition infringements.
As to the timetable, the MEPs hope that an agreement on the future EU budget will be reached in the current legislative period, no later than April 2019, although most member states feel that this is unrealistic. Doing this would make it possible to avoid investment inertia in early 2021, Arthuis said.
The European Parliament will adopt a formal position on the post-2020 MFF at the March plenary session, before the Commission presents its formal proposals on Wednesday 2 May. (Original version in French by Mathieu Bion)