Led by Cyprus, the EU countries have now presented a first counterproposal that is roughly 2 percent lower than the European Commission’s plan. This amounts to a reduction of over 32 billion euros. It makes clear that the EU countries want to pursue a different financial course than both the Commission and the European Parliament.
Notably, the proposed cuts mainly affect programs for competitiveness and the external actions of the European Union. Spending on agriculture and regional development, by contrast, largely remains untouched. Countries that receive significant funds from agriculture and cohesion funds have especially campaigned to preserve these budgets.
Agriculture budget
Promotion
This still reveals a political divide within the European Union. One group of countries wants to protect agricultural and regional support, while others push for a smaller and more priority-focused agricultural budget. Among them, Germany and the Netherlands belong to the countries advocating restraint in spending, yet they also accept a multi-billion cut in agricultural policy.
The European Parliament has a very different view on the plans for the coming years. EU politicians believe the European Union needs more financial room to achieve its goals. Especially in recent years, Brussels has laid out ambitious plans for greater autonomy in world trade and defense. Consequently, they oppose a budget cut and maintain the reduction in agricultural funds.
New revenues
Alongside the spending debate, a fierce discussion continues over the European Union’s revenues. The European Commission wants to tap new sources of income to finance the budget. Various proposals have been made but face significant resistance from several EU countries.
Negotiations over these so-called 'own resources' have stalled due to major disagreements between national governments. Many countries fear that new European levies will come at the expense of national revenues or create new burdens for companies and citizens. Hence, Brussels has asked those countries to come up with their own proposals for new revenues.
Gambling and betting
The European Parliament is meanwhile trying to put new options on the table. This includes looking at a tax on online gambling and levies on global tech companies. In particular, a European gambling tax is receiving substantial attention. According to calculations, such a levy could yield about 13 billion euros during the entire seven-year budget period.
Whether such plans will become reality is still uncertain. New European taxes require unanimous approval from all member states. Since several countries have already taken a critical stance, the negotiations on the European budget (as before) promise to be a long and difficult process.