On Wednesday 21 May, the next-to-last round table of the two-day annual conference on the EU budget organised by the European Commission addressed a major question concerning the post-2027 Multiannual Financial Framework: where will the money come from to finance it?
Own resources. “Own resources are fundamental, because today 80% of the EU budget comes from the Member States”, said French Foreign Minister Benjamin Haddad. “We’re not going to have a choice”, he warned, insofar as “we have to increase the EU’s financial capacity”. The minister welcomed the Commission’s recent tax proposals (see EUROPE 13641/8): electronic waste, ETIAS (European Travel Information and Authorisation System) fees, small parcel fees, tax on digital services, etc.
The former director of the OECD’s Centre for Tax Policy and Administration, Pascal Saint-Amans, called the statistics-based resource proposed by the Commission in the 2023 package of three new own resources “interesting”. By having a greater impact on the countries of Western Europe, it would allow for “a rebalancing with the countries of Eastern Europe, which are more affected by the ETS [Emissions Trading System: Editor’s note]”.
But for him, these taxes should be “without opportunity cost to the Member States”. These “genuine own resources” would not encroach on taxes that could be collected by the Member States. The EU should also allocate to the budget “ part of the revenue from the UTPR (Undertaxed Profits Rule)”, which allows it to deduct the difference, up to 15%, from a company taxed at less than 15%.
Private resources. It will also be necessary to “mobilise massive private resources”, warned the President of the European Investment Bank, Nadia Calviño. She and Benjamin Haddad called on the EU to speed up the construction of the Capital Markets Union.
The EIB President praised the InvestEU programme, which guaranteed the leverage effect of the EU budget, and explained that her institution intended to “mobilise €250 billion of investment in new cutting-edge technologies by 2027”, by calling on “private capital and optimising the use of EU budget guarantees”.
Speed will be a major issue for European investors and innovators, warned Ms Calviño. They expect “less bureaucracy and simplification”. According to Benjamin Haddad, the Member States will also have to stop imposing customs duties on themselves by improving the internal market. For him the idea of allowing companies to subscribe to a European scheme, which would be a sort of “28th European business law”, and which is included in the EU’s ‘Agenda for Competitiveness’, would contribute to this.
Community debt. “I don’t want to be seen as the Frenchman proposing debt”, joked Mr Haddad, who referred to the idea of joint borrowing, using as examples the economic recovery of the Member States, made possible by Next Generation EU, and the recent proposal to finance defence through loans, except that these loans would have to be repaid by the Member States and not by the EU. “We will have to remove certain debt-financed facilities from the MFF”, added Pascal Saint-Amans. (Original version in French by Florent Servia)