Next week, the European Commission will unveil its proposal for the next long-term EU budget, which will include ideas for generating new own resources.
This announcement was made by EU Budget Commissioner Piotr Serafin during a session at the EU Parliament in Strasbourg.
“We understand that discussions about own resources have historically been challenging. However, this time we cannot sidestep the conversation as we require additional resources,” stated Piotr Serafin.
He highlighted that the forthcoming long-term budget will face significant pressure from substantial repayments on the shared debt incurred by EU nations during the coronavirus pandemic.
The EU budget must accommodate approximately 25 billion euros annually for interest and repayments related to the Next Generation EU program, aimed at aiding member states’ recovery post-pandemic.
This equates to about 185 billion kroner each year.
Traditionally, EU countries have been hesitant to consider new own resources, as this would entail the EU Commission collecting customs duties or taxes to generate its own funds.
According to Piotr Serafin, the Commission has attempted to persuade member states to contribute more to the strained budget, but such efforts have not been fruitful.
“EU nations have been reluctant to raise national contributions. Therefore, we must seek a balance of new revenues,” he remarked.
He directly associates this need with the debt repayments within the budget: “National budgets are under strain, and starting from 2028, there will be 25 billion euros in the budget designated for obligations in the form of loans to Next Generation EU.”
“We at the EU Commission have scrutinized the revenue aspect more closely. I urge your support in these initiatives,” Serafin appealed to the EU Parliament.
While he did not specify which revenue sources the Commission is considering, this announcement has raised concerns at Dansk Industri.
“We are unsure what Serafin means by new own resources, but we are skeptical,” remarked Rikke Wetendorff Nørgaard, Head of European Policy at DI.
She expresses concerns that the EU Commission may propose new taxes detrimental to competitiveness.
“If the EU’s budget is to increase, the most economically prudent approach is to enhance member states’ contributions.”
“Relying on own resources may lead to business-harming taxes. Financing the EU budget with taxes that undermine growth and competitiveness would be counterproductive,” Nørgaard added.
Denmark has recently emphasized competitiveness as one of its two main priorities for its EU presidency, alongside defense.
This follows the Draghi report, commissioned by the EU Commission, which indicated that the EU is lagging in global competitiveness, particularly in comparison to the USA and China.
DI advocates for the EU Commission to seek budgetary savings before exploring new revenues.
“There are numerous opportunities to streamline the current EU budget before discussing new revenues and budget size,” Nørgaard concluded.
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