European Budget Commissioner Johannes Hahn is optimistic that EU leaders can reach an agreement next week in Brussels on the multiannual budget for 2021 through 2027. According to the Austrian, a compromise is possible between the different positions of the 27 EU heads of government.
Hahn is thus more optimistic than other EU officials. Traditionally, at least two exhausting summits are needed within the EU to agree on the size and allocation of a multiannual financial framework. "With political will and statesmanship, we can break that tradition," Hahn believes.
The European Commission wants to increase the budget from the current 1.00 to 1.11 percent of the combined income of the 27 member states, despite the fact that due to the UK leaving the EU, a gap of approximately 11 billion euros annually will arise. The European Parliament demands a total amount of 1.3 percent, and âin any case new revenueâ. This is seen as a plea for the introduction of a direct European tax, which has always been a taboo among EU countries until now.
Dutch Prime Minister Mark Rutte said last week that the Netherlands does not want to contribute more than in the past seven years, ignoring inflation and economic growth. But this week, Dutch Deputy Minister of Finance Hans Vijlbrief said the Netherlands is willing to discuss giving up the fiscal veto in the EU, the Financieele Dagblad reported.
So far, agreements on taxes within the EU are subject to the unanimity principle, which in practice amounts to a veto right for each country. The Netherlands would be willing to give up that veto 'for harmonization of energy taxes.' The official did not elaborate further on other European plans for the introduction of European taxes, for example on plastic bottles or a European internet tax.
With the formulation to ânot necessarily oppose majority decisionsâ when it comes to the 'greater goal' of climate policy, the discussion within EU government circles about the âtax vetoâ and on âEuropean taxesâ could be opened at the summit in Brussels.
Earlier, Dutch European Commissioner Frans Timmermans also expressed concern about the rigid stance of the Netherlands in the negotiations on the European multiannual budget, as appeared from a recent interview in the Financieele Dagblad. Timmermans fears that the Netherlands, due to its inflexible stance, will end up isolated and ultimately worse off than if it is willing to make compromises. Other countries such as Austria, Denmark, and Sweden also object to increasing the EU budget.
With the new position on giving up the tax veto, the Dutch cabinet not only makes a shift compared to its own earlier positions but also goes against the largest governing party VVD. This could cause disagreements or even a crisis within the Dutch governing coalition over the decision-making regarding a higher Dutch contribution to the EU.
According to EU sources, behind the scenes in Brussels the figures are being âfine-tuned to the finest detailâ to find solutions to the member statesâ demands and there is said to be âmovementâ in the negotiations. In the latter case, the February 20 summit could possibly lead to a politically charged agreement on future new revenues in favor of new EU projects such as the Green Deal, after which a follow-up summit (in the second half of 2021) could reach a definitive agreement.