Brussels plans to raise $44 billion annually in new taxes

This plan, which represents a paradigm shift, as the EU has historically been mainly financed by countries’ contributions – calculated on the basis of their gross domestic product – can be explained by the pressures on society’s accounts due to debts inherited from the pandemic.

From 2028, Brussels must start bringing back more than 750 thousand million euros were requested in the markets in 2020 To publish the recovery plan implemented after the Covid-19 pandemic – Next Generation Money – with 2058 as the deadline by which debts and interest must be repaid. The problem is that almost half of this money corresponds to non-refundable transfers to member states – in the case of Spain, 80 billion so far– which, therefore, must be returned through the community budget.

This has put the Commission in a dilemma, because the historical parsimony of the Nordic countries – Germany, the Netherlands, Sweden and Denmark – ensures that it will not be able to rely on larger transfers from countries. This tension was particularly evident at the start of negotiations on the next EU budget – or the so-called multiannual financial framework 2028-2034 in this case – which began with a conservative spending proposal from Brussels.

The multifunction printer, which was presented on July 17, received 2 million euros, which is only 1 million euros. 1.26% of the gross national income of the twenty-seven countries. With this, von der Leyen will have to finance key items such as the Common Agricultural Policy (CAP) or cohesion funds, which since the creation of the European Union have worked to bring poorer countries closer to rich countries in income levels. At the same time as it does so, it must increase allocations to defense and competitiveness – as requested in the Dragoi plan – and return to markets what it lent to finance the Next Generation programme.

As he explains to ABC Mario Callingprofessor of political science at UNED and an expert on community budgeting, has never had to do so much with so little.

As I already mentioned, the main problem is this 400,000 million More interest will be returned to debts incurred after the pandemic. In fact, if the payment for this line item is deducted, the budget for 2028-2034 falls to 1.15% of European GNI, just 0.02 percentage points higher than the current budget. Specifically, the Commission’s plan is to return €169,000 million of debt to the next generation over the next seven years, at a rate of €25,000 million per year.

Hence the importance of collecting new taxes, explains Collinge, since tax revenues in Brussels – mainly customs – have no room to increase. Hence, the expert continues, it remains to be seen what von der Leyen will achieve, because part of the proposed new resources has generated hesitation in some capitals due to its impact on their national accounts.

A blow to companies

Of the new special resources proposed by von der Leyen’s team, the largest would affect uncollected e-waste, fees that states would pay and which Brussels plans to collect. 15 billion annually. Specifically, the idea is to “punish” governments that are less efficient at recycling tablets, phones or computers, and reward more efficient governments. The problem, which the industry has denounced, is that the rate would likely translate into greater tax pressures on companies. The upward adjustment of the tax on tobacco continues, a measure that in our country could raise the price per pack by up to 2 euros and would generate revenues of $11 billion per year for the European Union.

The new emissions trading system has also been controversial, as the obligation to purchase emissions rights extends to land transport, buildings and industrial facilities, as already happens in maritime transport. Through this measure, Brussels estimates that it will raise 9.6 billion euros annually, although the price to be paid in countries such as Spain, where transport depends 96% on road traffic, may be higher inflation. As far as companies are concerned, another blow comes in the form of the CORE tax, a new tax that will impose an annual contribution on companies with net sales of more than 100 million euros. In this case, the additional financial burden on the productive fabric of the twenty-seven countries will reach $6.8 billion annually.

with 1.4 billion Of the expected set, the so-called “Carbon Border Adjustment Mechanism” closes the list, which starting next year will set a price on carbon emitted during the production of intensive goods imported into the EU.

Von der Leyen succumbs to the temptation of Parliament

Whatever the case, if von der Leyen’s budget plan represents a real revolution, it is not because of these new resources, but because it combines CAP, cohesion, migration, climate or security funds into a common line item that will be transferred to countries so they can spend on what they consider to be the highest priority. As experts explain to ABC, this is a cunning maneuver on the part of German politics, because it will allow it to share responsibility for distributing funds that will certainly leave victims.

In fact, this plan met with opposition from the European coalition in the European Parliament, which considers it a solution “Renationalization” Of accounts. Also drawing criticism is the protected minimum direct aid from the Common Agricultural Policy, a total of €302,000 million, which the industry considers a hidden cut, as it is 20% less than the current allocation.

This forced the Commission to present an alternative proposal to avoid a setback in Strasbourg. The latest offer includes increasing the armored part of the field by an additional 10% of the total funds. It remains to be seen what response Brussels will receive.

Farmers advertise a “historic” tractor unit in Brussels

The amendment to the budget proposal announced by the European Commission yesterday after a quick meeting on Tuesday with the President of the European Parliament, Roberta Mizzola, did not convince agricultural organizations. In a very harsh statement, Asaga yesterday considered the increase in funds proposed by Ursula von der Leyen (an “extra” 10% of the total rural budget) to be an exercise in “Triple».

Asaga believes that the current multilateral financial framework represents a 17% structural cut (The initial 20% is no longer in direct aid and 40% is in rural development funds, an item that has until now been protected and outside the scope of direct aid. However, European agricultural organizations are maintaining the campaign scheduled for November 18 in Brussels, coinciding with the next meeting of EU heads of state in the Belgian capital, a mobilization that they stress will be “historic.”