The European Commission will propose on 22 December a ‘basket’ of three new EU own resources, the proceeds of which will help repay the €750 billion of financing for the EU’s Next Generation EU Economic Recovery Plan (see EUROPE 12854/1).
These new own resources are expected to generate a total of around €18 billion per year over the period 2023-2030.
Part of this amount - €8 billion a year, according to figures yet to be confirmed at Wednesday’s meeting of the college of Commissioners - will be used to finance the Social Climate Fund by extending the EU Emissions Trading System (ETS) to the transport and building sectors.
‘Pillar 1’ of the ETS would generate around €5 billion per year for the EU budget, compared to just over €1 billion per year from the Carbon Border Adjustment Mechanism. Finally, ‘Pillar 1’ of the OECD agreement on the taxation of multinationals could bring in between €2.5 and 3 billion per year for EU coffers.
Repayment of the Recovery Plan would begin in 2028 and continue until 2058.
The Commission is proposing a ‘temporary adjustment’ to ensure a fair contribution of all Member States to the ETS-based clean resource and “mitigate the impact on high-carbon economies”, says an EU source. This protection mechanism is aimed in particular at convincing Poland, which is reluctant about the ETS.
A “victory” for the European Parliament. The proposal “is the direct result of the European Recovery Plan negotiations during which Parliament took an extremely firm position on the method of repayment of this recovery”, welcomed MEP Valérie Hayer (Renew Europe, France), in a statement issued on Monday 20 December.
The presentation of these first three resources - ETS, Carbon Border Adjustment Mechanism, and ‘Pillar 1’ of the OECD agreement on taxation of multinationals - “is therefore a political victory for Parliament as well as for European citizens, who will not have to pay back the cost of our recovery”, Mrs Hayer also said.
The Commission’s proposal will be presented to the members of Parliament’s Committee on Budgets on 13 January 2022.
The French Presidency of the Council of the EU has the objective of getting Member States to finalise a unanimous (required) agreement on this dossier by the end of June 2022.
The new own resources would enter into force on 1 January 2023 and the Commission will make proposals in 2024 on a new own resources package for the EU budget, including a financial transaction tax, according to the interinstitutional agreement on budgetary discipline. (Original version in French by Lionel Changeur)