The European Parliament’s budget committee wants three entirely new taxation measures introduced that it says could raise an extra €60bn for the EU’s budget each year, as MEPs gear up for the fight to stop a cut in ringfenced CAP funding.
The committee’s position is to be put to a vote of all MEPs this week and, if approved, will just leave negotiations on the future of the EU budget waiting on member states to agree their position.
Three new digital taxes form part of Parliament’s draft plans to push for an even larger EU budget for 2028-2034 than had been proposed by the European Commission last year.
The tax measures it is to seek are a digital tax on large-scale tech companies that pay corporation tax outside the EU but have a significant number of EU users, an online gambling tax and a tax levied on capital gains arising from trading crypto currencies.
The Parliament committee wants a 10% larger EU budget than had been planned by the Commission, as well as a full re-ringfencing of €385bn in EU funds into the CAP that the Commission wants to put into a single fund that also covers non-farming spending areas.
“We are confident that we have the numbers for the vote that we need. After this, we are able to start our work with the Council and Commission,” Portuguese MEP and member of the European Parliament’s budget committee Carla Tavares told Irish journalists last week.
Waiting for member states to agree
Member states are expected to agree and sign off on their common position for budget negotiations in the second half of this year, which will be during Ireland’s presidency of the council.
While Ireland will play a key role in brokering agreement between member states with different views on the budget, it will not 'lead' the policy direction that member states as a whole will take in talks.
The Commission will also have some input into these negotiations and the current make-up of the European Parliament leaves any reforms deemed too radical to MEPs more vulnerable to falling down when put to a final vote sign-off on what is agreed by negotiators.
MEPs' plans to introduce new taxes are expected to be a tough sell for member states that do not want to see tax revenues leaving their country to be divvied up by Brussels for EU programmes.
Toning down the cuts
The Commission has already backpedalled to some degree on the extent of the reform it had been seeking in shaking up the funding of CAP and rural development programmes since last summer when it outlined its initial plans.
These proposals looked to axe the dedicated funding pot for CAP by ringfencing just €300bn for farm supports, which equates to an approximate funding shortfall from current CAP funding levels of 24% or about €90bn.
It has since said that some 10% of unallocated funds that had been due to be allocated to member states to the policies they deem to be of highest priority should be dedicated to spending on rural areas – this portion of funding equates to around €45bn.
The Commission also said that €48bn that was to be unallocated until half way through the 2028-2034 budgetary cycle should be available for allocation straight away when the new budget kicks in.
Parliament's chief CAP negotiator Norbert Lins MEP maintains that these two changes have essentially backfilled the initial ringfenced budget cut of around €90bn and that Parliament's focus should be to now to look for a funding rise to account for any inflation that has whittled away CAP payments' spending power over recent years.
SHARING OPTIONS