The unsuccessful plans of the Commission to finance the European recovery plan

It is a seemingly technical subject, but the implementation of which, over time, may change the nature of the European Union (EU). We are talking here about own resources – these taxes which would be levied on European citizens and businesses to supply the Community budget, today very largely dependent on the contributions of the Twenty-Seven – which the Commission wants to acquire by 2026, as she explained on Wednesday, December 22.

Increased own resources mean two things for the Member States. On the one hand, part of the levies weighing on their taxpayers escapes them. On the other hand, the European institutions are gaining in autonomy since they depend less, from a financial point of view, on their goodwill. In other words, many governments within the EU are not spontaneously in favor of it. No more today than yesterday.

But the choice of the Twenty-Seven to borrow together to finance the European recovery plan of 750 billion euros, after the unprecedented recession linked to the Covid-19 pandemic, forced them to qualify their position, especially that this was an express request of the European Parliament. They therefore decided that their own resources would be created to allow them to honor this common debt, which will cost them around 15 billion euros per year from 2026.

Read also Article reserved for our subscribers European recovery plan: the money will finally be able to arrive in the coffers of the Member States

The Commission was slow to make its proposals, which were expected in June. The election of Joe Biden and the desire of Europeans to restore the transatlantic link, damaged by the Trump years, have, it is true, changed the situation. Brussels has indeed abandoned the track of a digital tax, since the United States supported the adoption of a minimum taxation for multinationals, and an agreement on global taxation was concluded within the ‘OECD in October. The Commission was also careful not to anger Washington (too much) with the carbon border adjustment mechanism, which the Europeans want to introduce in order to tax imported goods whose production does not meet their standards in terms of the environment.

Lively debates

In this context, the Commission has identified three new own resources, which should bring it in between 15.8 billion and 17.3 billion euros each year from 2026. Part of the revenue, which will come from the establishment of new international taxation, will supplement the European budget, at the rate of 2.5 billion and 4 billion euros per year. The carbon border adjustment mechanism should for its part contribute 0.8 billion euros. Finally, the expansion of the European carbon market (Emissions Trading System, ETS) to the maritime and air sectors, as well as the creation of another CO emissions trading system.2 for heating and fuel will bring the community funds 12.5 billion euros per year.

You have 36.78% of this article to read. The rest is for subscribers only.

We want to give thanks to the author of this post for this amazing material

The unsuccessful plans of the Commission to finance the European recovery plan

Decode The News Podcast