The European Parliament opposes a smaller budget. EU politicians want sufficient funds for new priorities such as security, defense, and competitiveness, without cutting existing spending on agriculture and regional development. The Parliament has called for a 10 percent increase in the proposed budget.
New levies
This also places the financing increasingly at the center. Besides contributions from the 27 EU countries, there is a search for new ‘own resources’ (read: taxes) for the EU. These would make the European budget less dependent on direct payments from national budgets.
The European Commission has proposed various new sources of income for this purpose. These include revenues from a nitrogen penalty, electronic waste, tobacco, and contributions from large companies. However, there is not yet any agreement among the EU countries on these plans.
Promotion
Opponents
Germany is particularly opposed to the size of the Commission’s proposal of almost 2 trillion euros. The Netherlands, Austria, Denmark, and Finland are also among the countries demanding significant cuts. Sweden is also included in this group. Talks center on reductions amounting to hundreds of billions of euros.
On the other hand, the EU simultaneously wants to spend more money on new priorities. Defense, security, and competitiveness have been given a more prominent position. This increases tension with traditional major expenditure areas, including agriculture and regional support. Climate spending also needs to be accommodated within the new budget framework.
Digital tax
The European Parliament itself has suggested additional possibilities for new revenues. It mentions a digital levy and revenues from cryptocurrencies and online gambling. According to supporters, a digital levy could generate significant amounts. However, Germany doubts whether such new income could solve the financing problem.
Berlin is not fundamentally opposed to new own resources, provided they do not harm competitiveness. But according to Germany, the EU will still not avoid substantial cuts to the Commission's proposal. This pits two approaches against each other: seeking more revenue or reducing the overall budget.
Reaching agreement
The upcoming negotiations must bridge these divides. This concerns not only nearly 2 trillion euros, but also the allocation between new and existing priorities and the way the EU finances its expenditures. To adopt a final multiannual financial framework, the member states and the European Parliament must ultimately reach an agreement.