MEPs will vote next Wednesday on a second basket of new own resources for the EU budget (see EUROPE 13164/28) to replenish the Union’s coffers and, in particular, to repay the borrowing costs associated with the Next Generation EU strategy (estimated at €15 billion per year until 2058).
This basket of own resources includes a new fair border mechanism, a European taxation of crypto-currencies, the use of part of the revenues from the future harmonisation of corporate tax in Europe (BEFIT), a digital contribution or additional statistical resources (gender pay gap, bio-waste recycling rate).
This text is carried by co-rapporteurs José Manuel Fernandes (EPP, Portuguese) and Valérie Hayer (Renew Europe, French).
In an interview with EUROPE, Mr Fernandes discusses the importance of this text, which will be voted on in the European Parliament plenary session. (Interview by Pauline Denys)
Why does the European budget need new own resources?
Today, we need these revenues. It is an emergency because if we don’t have them, from 2027 onwards, we will have 10% of the budget to pay the debt, plus the 15 billon per year of Next Generation EU and we cannot jeopardise the future.
Solidarity with the next generations must be maintained. They will, in fact, pay this debt twice, because they will have to pay it and, in addition, they will not have access to the programmes that the European Union needs. There is also the discussion of the dogma of keeping the EU budget at around 1% of gross national income (and balancing it annually). With 1%, you want to do everything and it’s impossible. The budget needs flexibility. Moreover, not having common projects will be very expensive for Europeans.
Why favour this type of joint funding at EU level?
The budget should not just be money to be distributed among the Member States. We lack common solutions and common projects that should be strengthened. There is a paradox in many people’s minds. They say they want a stronger budget and then they ask how to finance it. If it is financed through current resources, this means that more national transfers are required from the Member States, which forces citizens to pay more taxes. We want just the opposite.
What is the objective behind these own resources?
We want resources that do not burden citizens and SMEs, but we also want these resources to do something else. The aim is to generate revenue, but also to promote fair competition in order to achieve the EU’s political priorities, particularly in terms of climate. For example, bio-waste that is landfilled is a problem. It is a ‘statistical resource’ that aims, in the long run, to yield no revenue at all (when no one puts any more bio-waste in landfills). We therefore need smart resources that do not burden citizens, provide revenue and promote fair competition, competitiveness and tax justice.
The EU Council has not yet decided on a first basket of three own resources, including the CBAM, the ETS and the OECD first pillar (see EUROPE 13165/17, 12859/3). What do you expect from the EU Council?
On the EU Council side, they have to start working, but it is very difficult to have unanimity on own resources.
If we take one own resource at a time, it is impossible to have unanimity, because there are own resources that benefit one Member State more than another. For this reason, we have put together a basket with several of our own resources. This makes it easier to achieve a balance. What we also ask, in the end, is that the Commission does its job by carrying out impact studies to see how things can be calibrated. It must do so quickly so that the EU Council can take a decision.
How do you respond to those MEPs and interest groups who point to a lack of ambition and deplore in particular the lack of taxation on the richest?
There are colleagues who would indeed like to tax the richest. But who are we talking about when we talk about the richest? In Europe, there are already a lot of taxes and we must avoid capital flight. There is also already a property tax. There are people who would like to increase taxes on people and companies; we are trying to avoid this.
And what can we say to those who consider that the principle of subsidiarity is violated?
This is a false argument, when we know that the decision will only be adopted when the national parliaments ratify it. If there is one subject on which unanimity is required in the EU Council and then unanimity in the national parliaments, it is that of own resources.
What are the next steps?
Our main objective is to have the new own resources adopted after 2027 with the new Multiannual Financial Framework. We are in 2023, it seems like there is still room for improvement, but there isn’t, because all this takes a long time.
Are you confident?
Having new own resources is not an impossible task, but it is almost impossible, because having unanimity in the EU Council and the ratification of all the national parliaments is an almost impossible task. But we cannot afford not to have new own resources. This would be a very high price for citizens.