At the meeting of the Economic and Financial Affairs Council (Ecofin) in Brussels on Friday 14 July, the EU’s finance and economic affairs ministers held an initial exchange of views on the European Commission’s proposal for a new own resources package comprising an initial proposal, dating from December 2021, to generate three new sources of revenue for the EU, as well as a new temporary statistical own resource based on company profits (see EUROPE 13222/14). These resources are intended to contribute to the repayment of funds raised by the EU to finance the NextGenerationEU recovery instrument.
A majority of the finance ministers expressed doubts or asked for more time to analyse this package, which includes a first resource based on the revenue from the Emissions Trading System (ETS) (with 30% of this revenue allocated to the EU budget), a second based on the revenue generated by the carbon border adjustment mechanism (with 75% of the mechanism’s revenue allocated to the EU budget) and a third based on the share of the residual profits of multinationals that will be allocated to EU Member States under the OECD/G20 agreement.
The fourth statistical resource of a temporary nature, based on company profits, has a rate of call of 0.5% of the gross operating surplus statistics recorded for the financial and non-financial firms in each Member State. It is proposed until such time as an own resource through the BEFIT initiative (see EUROPE 13222/14) is put in place.
For Lithuania, Poland, Bulgaria and Malta, the proposal as a whole is “unbalanced” and fails to ensure the fairness and transparency required for Member States to be able to accept it.
While some countries said they were “open to discussion” once more in-depth technical work had been undertaken, Portugal was one of the few to fully see this as “a process that is necessary, not only for the future of the European project, but also for the immediate challenges”, such as the payment of funds raised for NextGenerationEU.
Several countries (Lithuania, Poland, Estonia, Luxembourg, Hungary) denounced the proposed change from a 25% to a 30% call rate for the own resource based on the ETS. “For us, 25% was already not good, so 30% is even worse”, said the Lithuanian finance minister, Gintarė Skaistė.
For a number of countries, including Latvia, Slovenia and Hungary, ETS revenues should accrue entirely to the Member States. “Achieving climate neutrality requires major efforts on the part of the Member States, which are also dependent on their specific national circumstances. It is therefore important to use this revenue for climate purposes within their own competences”, said Tibor Tóth, Hungarian State Secretary for Finance.
With regard to the new temporary statistical resource, some Member States, such as Croatia, warned against the risk of creating new administrative constraints and, like the Netherlands, were keen to point out that the system already in place, based on gross national income (GNI), was balanced and made it possible “to reflect the level of prosperity of the Member States”.
The vast majority of ministers expressed their desire not to conduct parallel negotiations on the revision of the MFF and the new own resources package, given that the latter is likely to take longer to be adopted.
A number of countries, such as France, felt that these new resources needed to be further assessed, and some, such as Sweden, expressed doubts about the timetable, which aims to address this issue at the European Summit in October 2023.
At the end of the Council, Spain’s Minister for Economic Affairs, Nadia Calviño, said that she heard the concerns of the Member States and felt it was necessary “to step up work at a technical level in order to make progress in the negotiations”. (Original version in French by Pauline Denys)