A welcome initiative, a rapporteur with broad support. Has the time come to prepare the Union's own resources system for the future? How can the way in which discussions between institutions on funding Community activities in the future begin? I am not referring to the preparatory studies or formulas sometimes put forward by study bodies or associations (there are several of them, none of them are excellent) but rather, the institutional initiatives. According to the calendar, the European Commission will be presenting its proposal next year so that the Council can launch negotiations in 2009. In this context, the European Parliament decided to speak out immediately in an effort to inform the Commission about its position before the formal proposal is formulated. Therefore it overwhelmingly approved an “own initiative report” last week, which both proves the interest the EP quite rightly has in this aspect of European affairs, as well as the confidence it has in its rapporteur (with the exception of British Conservatives, who welcome the opening up of the budgetary debate but reject Mr Lamassoure's approach).
How many times have we heard (me, who is in the middle of writing and you, who are reading) the protests or outcries over the lack of EU resources for tackling the increasing number of tasks facing the EU? How many times have these resources been criticised for being so small? Personally, I do not think that the Community budget is ridiculously insufficient: the EU does in fact have billions of euros that enables it to effectively support Europe's economic cohesion and fund its common policies and programmes, such as Erasmus and actions throughout the world. I don't entirely trust those who are always demanding more money, the management of which by the beneficiaries has definitely not always been brilliant. The volume of the budget is high, and in some areas its expansion is not only timely but crucial. Priority targets, however, in budgetary reform consist of radically overhauling the way in which these resources are used and improving the supervision of the way in which they are used.
Main principles and two stages. What counts with the rapporteur, Alain Lamassoure, is that he knows what he's talking about, as a result of his responsibilities at national and European levels (minister for European affairs, budget minister), which he took very seriously, as proved by the care with which he established and maintained close and permanent contacts with national parliaments, indispensable partners in this arena.
I think I can summarise the principles behind the rapporteur's attitude into four points:
1. Working in close contact with national parliaments, which, being responsible for the budgets of member states have their word to say on any transfer of resources to the European Union, as well as on the creation of the European Union's own resources, with regard to taxes or otherwise. The competent committees of national parliaments are involved in the work from the outset and two new meetings are programmed: one in June, the other at the beginning of November, in view of adoption of the second report from the European Parliament (see below).
2. Being ambitious and firm on the objectives but reasonably cautious about the pace of reform, because it would be fruitless to upset governments and national parliaments: this would be the surest way to failure, as approval by all governments (at the Council) and ratification afterwards by every parliament is necessary.
3. Envisaging reform in two stages. During the first, up to 2014, the EU budget will be mainly funded from national coffers, like today, but by radically simplifying the methods for calculating and how it is run. Member states will be requested to pay a contribution into this budget of 1% of Gross Domestic Product. This will involve getting rid, in the long term, of all specific systems, including the infamous “British rebate” and this will be the first reason why the British Conservatives will vote against it in the plenary session. By following the line of its rapporteur, Parliament believes that this suppression will be politically possible if the way the distribution of spending is revised, so that all member states benefit from it in a balanced way. This would immediately mean that agricultural spending is reduced, not necessarily in absolute terms but in a percentage of the total, and that other spending categories are increased.
The second stage will begin in 2014 and will finally introduce the system of own resources, already included in the Treaty of Rome. The EU is for the time being essentially living from contributions from member states: own resources only represent a very reduced part of the budget (around 10%), mainly represented through a percentage of VAT and customs revenue from third country imports (revenue that is decreasing and will continue to, even if the volume of imports rises, as the level of custom duties will continue its downward trend). Contacts with national parliaments convinced the rapporteur that “it is not yet time for a European tax and this won't be happening in the near future”. On the other hand, he pointed out that several national taxes that exist are being prepared for a partial impact from the European budget, without fiscal sovereignty of member states coming under threat. The Lamassoure report contains a list of possible options but does not yet make any choices. See below for remarks made from the rapporteur.
4. The idea of a genuine European tax is being kept for the future but cannot be programmed yet. The European tax is not on the cards and is not being proposed but the idea of it has not been renounced. Parliament shares its rapporteur's line on this.
Readers who are interested in the whole dossier, the contents of the report and the European Parliament's position, can refer to Lionel Changeur's reports; the first during approval of the budget committee's report on 12 March (EUROPE 9385), the second at the time of the very broad support of the plenary session on 29 March (EUROPE 9397).
A resource to be defined. I'll add the results of a conversation with the rapporteur (a brief exchange of views, not an interview) following the plenary vote. Alain Lamassoure reaffirmed that the current system is “an absolute failure” because: a) the EU does not have enough funding for policies and actions decided by member states themselves (he mentioned trans-European networks and difficulties with Galileo); b) the total lack of transparency and derogations or special regimes agreed to for a lot of member states (the “British rebate” is the best known but it is far from being the only one); c) citizens find it incomprehensible. The European budget has to respect the same rigorous criteria imposed on national budgets but there has to be coherence between the programmes and projects that the EU itself adopts and the opportunities for implementing them.
The second report that Lamassoure is going to prepare will mainly focus on the definition of future “own resources”, based on the EU allocation to part of this revenue from certain national taxes. Which ones? The first report mentions some of the possible options without making a choice: part of the tax on European companies; a percentage of VAT; part of this revenue from energy taxes that have an environmental cost. Lamassoure indicated that other options were mentioned during the debates, such as revenue from fines imposed on countries or companies or tax on tobacco (a pollution tax in effect). The choice is not easy as the taxes chosen have to raise sufficient revenue and the return has to be comparable in all member states (taking into account the different dimensions).
The rapporteur's preference. In a personal capacity and subject to other analyses, Mr Lamassoure is looking at a fraction of the tax on company profits, on the condition that the tax band is harmonised. In response to the objection that no formal draft exists in this connection, Lamassoure explains that the European commissioner for taxation, László Kovács, announced a proposal for spring 2008. It is true that some commissioners have not hidden their reservations about this idea but for the rapporteur, the situation is clear: it will be up to the Commission, as a college, to give its decision. He believes that harmonisation is essential, as there is “no valid argument” for opposing it: independent of the level of rates, the current situation is, “obscure, opaque and the practices of certain member states is even shocking” if they were better known.
Lamassoure explains that systems allowing for derogations must be suppressed in the first phase of reform and that this won't be impossible if the EU extends its spending into areas of common interest to all member states: tripling the amount for the Erasmus programme, strengthened support for Galileo and other projects that are positive to the whole EU and increased funding to certain parts of the trans-European networks.
(FR)