Brussels plans to collect $44 billion in new taxes annually

The plan is a paradigm shift, as historically the EU has been primarily funded by contributions calculated based on each country’s GDP, but it is explained by the pressure on community accounts due to the debt inherited from the pandemic.

From 2028, Brussels must start giving back more than that. 750 billion euros demanded from the market in 2020 The recovery plan implemented after the COVID-19 pandemic, the Next Generation Fund, must be rolled out and debt and interest due by 2058. The problem is that about half of that money represents non-refundable transfers for the benefit of member states. In the case of Spain, 80 billion so farTherefore, it must be returned through the community budget.

This puts the European Commission in a predicament, as the historical stinginess of the northern countries (Germany, Netherlands, Sweden, Denmark) ensures that the Commission cannot count on further aid from them. This tension has become evident precisely at the start of negotiations on the next EU budget, the so-called Multiannual Financial Framework (MFF), in this case from 2028 to 2034. The budget began with proposals from Brussels, which was conservative in terms of spending.

The multifunction device, which was announced on July 17th, was awarded 2 million euros, the equivalent of just one unit. 1.26% of gross national income of 27 countries. This will require von der Leyen to fund key items such as the Common Agricultural Policy (CAP) and the Cohesion Fund, which has helped bring the poorest countries closer to the income levels of the rich since the EU’s creation. At the same time, it must increase allocations to defense and competitiveness as required by the Draghi program and return to the market what it has lent to finance next-generation programs.

As he explained to ABC mario kelingThe UNED political science professor and regional budget expert said this was the first time a committee chair had had to do so much with so little money.

As already mentioned, the main issues are: 400,000 million More interest will be paid back on debts incurred after the pandemic. In fact, after deducting payments for that item, the budget for 2028-2034 would be reduced to 1.15% of Europe’s gross national income, just 0.02 percentage points higher than the current budget. Specifically, the European Commission’s plan is to repay 169 billion euros of Next Generation debt at a rate of 25 billion euros per year over the next seven years.

Collecting new taxes is important because Brussels’ tax revenues (mainly customs duties) have no room to increase, Kering explains. The expert continued that it remains to be seen what von der Leyen will achieve, as some capitals are reluctant to use some of the new proposed resources due to their impact on the national economy.

A blow to companies

The biggest new unique resource proposed by von der Leyen’s team affects uncollected e-waste, which states pay for and the city of Brussels plans to collect. 15 billion annually. Specifically, the idea is to “punish” those governments that are least efficient at recycling tablets, cell phones, and computers, and reward those that are most efficient. The problem is that this tax rate, which has been condemned by the industry, could likely lead to greater tax pressure on businesses. Tobacco taxes continue to be revised upwards, potentially raising the price of a pack by up to 2 euros in our country, a measure that will generate the equivalent of $11 billion a year in revenue for the EU.

The new emissions trading scheme is also highly controversial, extending the obligation to purchase emissions rights to road transport and industrial buildings and facilities, as already in place for maritime transport. Brussels estimates the move could raise $9.6 billion a year, but it could come at the cost of higher inflation in countries like Spain, which relies on road transport for 96% of its transportation. As far as companies are concerned, a further blow will be dealt by the new CORE tax, which imposes an annual contribution on companies with a net turnover of more than 100 million euros. In this case, the additional financial burden on the production structures of the 27 countries would amount to 6.8 billion annually.

and 1.4 billion With the expected reduction in collection volumes, the so-called “Carbon Border Adjustment Mechanism” will close the list and set a price on carbon emitted during the production of intensive goods imported into the EU from next year.

Von der Leyen succumbs to parliamentary temptation

Be that as it may, if von der Leyen’s budget proposal represents a real revolution, it is not because of these new sources, but because of the fact that it will combine CAP, cohesion, migration, climate and security funding into one joint line item and transfer it to each country to spend on what they consider to be their top priorities. As experts explained to the ABC, this is a cunning move on the part of German politics, as it will make Germany share the responsibility for distributing funds that will surely leave victims.

In fact, the plan faces opposition from the European Union in the European Parliament. “Renationalization” of your account. The protected minimum amount of direct aid from the CAP has also sparked criticism, with the total amount of €302 billion being 20% ​​less than the current allocation, which is seen by the field as a hidden cut.

This forced the Commission to come up with an alternative plan to avoid the Strasbourg setback. The latest proposal consists of an additional 10% of the total funding to increase the armored portion of the field. It remains to be seen how Brussels will react.

Farmer unveils “historic” tractor unit in Brussels

The budget amendments announced by the European Commission yesterday after an extraordinary meeting with European Parliament President Roberta Mezzola on Tuesday have not convinced agricultural groups. Yesterday, Asaja, in a very harsh statement, characterized Ursula von der Leyen’s proposed increase in the fund (an “extra” 10% of the total local budget) as an exercise in “.”tripartite principle».

Asaja said that the current MFF 17% structure reduction (no longer the original 20%) to direct aid, and 40% to the Rural Development Fund, items that were previously protected and ineligible for direct aid. But European farming organizations are maintaining their campaign scheduled for November 18 in Brussels to coincide with the next EU summit to be held in the Belgian capital, guaranteeing that the mobilization will be “historic”.