On Monday 8 May, MEPs debated a proposal for a new basket of own resources for the EU budget at Parliament’s plenary session in Strasbourg, backed by co-rapporteurs Valérie Hayer (Renew Europe, French) and José Manuel Fernandes (EPP, Portuguese) (see EUROPE 13177/11, 13164/28), ahead of the vote on Wednesday 10 May. They also discussed the report by Johan Van Overtveldt (ECR, Belgian) on the impact on the 2024 EU budget of increasing European Union Recovery Instrument borrowing costs, which will also be voted on (see EUROPE 13171/26).
Impact of Recovery Instrument borrowing costs on the EU budget
On the content of his report, Van Overtveldt emphasised that at the beginning of the lending operation, the EU was in a particularly favourable situation in terms of interest charges and available liquidity.
However, the situation has changed and “at the beginning of 2022, the structural nature of the inflation problem was already clearly visible anyway, and so was the rise in interest rates”.
He criticises a lack of foresight on the part of the Commission, but also a lack of transparency regarding its calculations of interest-related costs.
New own resources
“From 2027, the cost of debt for the EU budget will be more than €15 billion per year, almost 10% of the budget”, José Manuel Fernandes stressed, also referring to the borrowing costs of the European Recovery Plan. “If we don’t have new own resources, we will either have a reduction in the EU budget or the Member States will have to contribute to the budget with additional revenue at national level”.
Valérie Hayer wished to promote “a Europe that would be free of national budgetary constraints” and which “would not be forced to beg the states to finance its policies”.
Proposed amendments to tax the richest
A number of proposed amendments were tabled by the S&D, The Left and Greens/EFA groups concerning new own resources that would not only be based on corporate taxes but also on taxes on the richest individuals and households, a solidarity tax on companies that make “excessive profits from crises” and a minimum EU tax on capital gains.
“We need instruments that allow us to limit speculation, especially in the capital market”, said Rasmus Andresen (Greens/EFA, German).
A series of amendments also seek to change the term “fair border mechanism” to “fair border mechanism fine”.
Debate on the concept of “European taxes”
Johan Van Overtveldt spoke out against new own resources, which he described as “jargon for ‘new taxes’”. He asserted: “The European Union does not have this authority and it does not have the support of citizens. The tax burden in the EU is already very high, which affects the growth potential. We need to look at the expenditure side”.
In response, José Manuel Fernandes said that these were not European taxes. “The taxes are not European. Own resources are decided on by unanimity in the EU Council and this requires ratification by all national parliaments”.
Commissioner Thierry Breton, replacing Commissioner for Budget Johannes Hahn, gave assurances that the Commission would look carefully at the Parliament’s suggestions. “It is extremely important to assess how quickly new additional own resources can be approved and established, whether they can generate sufficient revenue for the EU budget, and we need to look at the simplicity of their implementation”.
To see the proposed amendments to the proposal for new own resources: https://aeur.eu/f/6sq (Original version in French by Pauline Denys with Thomas Mangin)