General Affairs Council/Multiannual financial framework
France posing as ‘Zorro of own resources’
By Gaspard Sebag | Tuesday 24 July 2012
France is trying to pose as the ‘Zorro of own resources’. Yet, in light of the small appetite amongst member states, a reform of the revenue side of the 2014-2020 multiannual financial framework (MFF) appears improbable.
When it comes to saying ‘no’ to new own resources, the Brits are amongst the clearest. “We’re not going to agree to some clever ways of raising additional funds [for the EU budget] through the back door,” said UK Europe Minister David Lidington during the General Affairs Council, on 24 July. Generally speaking, there is little enthusiasm to give the Union the possibility to get new tax revenue - with heavyweights, such as Germany and the Netherlands, purely and simply against - even if this means reducing national contributions.
In spite of the uphill struggle, France insists that it wants to see the EU budget get new own resources in order to ensure coherence between what is decided during European Councils in terms of growth and what is put on the table for the EU budget. “We are keen for the debate on resources to be able to take as much room in our discussions as the debate on expenditure,” said Bernard Cazeneuve, France’s deputy Europe minister. Paris got the support of Athens and for some time now Belgium has openly been in favour of the introduction of new own resources.
The options that the Commission has put on the table are either a financial transaction tax (FTT) or an EU-wide reformed VAT (value added tax), replacing the current complex VAT system. Negotiations concerning the latter have progressed very little. The FTT has not gathered the necessary unanimous support and therefore will only concern a limited number of countries if it flies as ‘enhanced cooperation’ (nine countries minimum). According to Budget Commissioner Janusz Lewandowski, it is legally feasible to affect a part of this financial transaction tax to the EU budget under such a scenario. Yet, even if the FTT were to see the light of day in that form, not all participating countries will want a portion of it to go to the Union’s budget.
According to Cazeneuve, the Commission is preparing a new own-resource proposal for the autumn concerning a carbon tax. The EU executive, however, appears to play this possibility down. Lewandowski believes that alternatives should not be discussed too much in order not to undermine the chances of the FTT to come to life. The Polish Secretary of State at the Ministry of Foreign Affairs, Piotr Serafin, told
Europolitics that in any case autumn would be “a bit late in the day” for a financial framework due to start in 2014 and that efforts should focus on the FTT.
Council on 2013 EU budget
The Council voted, on 24 July, its position on the 2013 EU budget. Overall, it wants to reduce the Commission’s draft by 5.2 billion euro in payments to 132.7 billion euro. The increase on 2012 is limited to 2.79%, well below the 6.85% boost requested by the EU executive. Commitments were cut in real terms (+1.27% to 149.78 billion euro).