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12 September 2016

EurActiv: Pan-European tax on the table after Brexit

Delegates from around the EU last week met in Brussels to discuss the possibilities for budget reform, an issue previously blocked by the United Kingdom.

Historically opposed to the creation of a European tax system, the Brits were noticeably absent from the interinstitutional conference on the future financing of the EU.

This conference, held in Brussels on 7 and 8 September, brought together members of the EU’s national parliaments, MEPs and representatives of the EU institutions to discuss the delicate question of the European budget. [...]

Sustainable revenue

The challenge of finding a more sustainable funding solution for the EU has long been a preoccupation in Brussels. And the United Kingdom, as a proponent of a minimal budget and a firm opponent of any kind of pan-European tax, has always blocked progress.

But in this regard, Brexit has been a game changer. “We did not see the usual British objections to the creation of a tax to feed into the EU budget,” said a French Socialist lawmaker, who attended the conference. [...]

Towards a European tax

The interparliamentary conference raised a number of proposals for the reform of the EU’s financing, including the creation of a European tax. This is an extremely sensitive subject, as member states jealously protect their fiscal sovereignty. And decisions of this nature must be made unanimously. 

Now that the main opponent of endowing the Union with its own resources is out of the way, the question can move forward. And it is becoming more and more urgent.

“The European Union needs its own resources, rather than the contributions from member states, because the budget is exposed to the rise of populism and budgetary austerity at national level,” said Savary.

Budget crisis on the horizon

Another motivation to advance swiftly on the question is that the EU faces a repeat of 2014, when it was unable to make payments for lack of funds. Without the ability to take on debt, the EU can only pay with payment appropriations. But these are unlikely to cover the growing list of European commitments, due in no small part to the strain of the migrant crisis. [...]

Full article on EurActiv


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