European Council President António Costa warned governments that they will be in a worse position if they do not agree on new EU-wide taxes to fund the bloc’s next seven-year budget.
During a visit to Croatia on Wednesday, António Costa urged EU leaders to soften their “red lines” ahead of a summit on October 15, where he intends to narrow down the list of potential taxes acceptable to EU governments. “Our priority is to try to define, already in October, the basket of new own resources”, António Costa said, speaking alongside Croatian Prime Minister Andrej Plenković. “Then we will be able to know how much we will need to ask from each member state.”
Reaching an agreement on new EU taxes, so-called “own resources,” is key to sealing an overall budget deal in December. Negotiations must be completed before national elections in France, Spain, and Italy in 2027 could complicate the budget process. António Costa is touring the capitals of all 27 EU countries to hear their concerns and assess possibilities for compromise. The Portuguese politician plays a key role in the negotiations as he chairs leaders’ meetings and helps broker compromises between different camps.
Resistance to new taxes and Commission proposals
The issue of EU-wide taxes is one of the most difficult in the negotiations, as national governments are reluctant to hand over more tax powers to the European Commission and agree to new levies that would hit some countries harder than others.
Last year, the Commission proposed five new levies linked to carbon imports, emissions, uncollected e-waste, corporate profits, and tobacco products. These were expected to raise €66 billion per year to fund the budget. However, most of these proposals have faced resistance from governments, which must unanimously approve each new levy.
The tension was on display when Luxembourg’s Prime Minister Luc Frieden rejected a proposed EU tobacco tax after meeting with António Costa earlier on Wednesday. “We will not accept proposals that disproportionately affect [Luxembourg]”, he told reporters.
Consequences of failing to reach a deal
Meanwhile, warning his fellow leaders, António Costa noted that a lack of agreement on new taxes would lead either to a smaller budget or to higher contributions from member states. “We have only two paths: reduce our ambitions on security, defense, competitiveness, cohesion, and agriculture… and the other alternative is to increase national contributions, which is also a problem for all member states.”
Either outcome would be undesirable for the opposing camps in the negotiations. Northern countries led by Germany complain that their contributions to the EU budget are already too high, while southern and eastern countries demand more EU funds for agriculture and regional development.
EU ministers will discuss the issue of new taxes at a meeting in Brussels on September 22.
According to: Politico
