When he announced the new EU Financial Resources proposals on Wednesday, EU Budget and Administration Commissioner Johannes Hahn pointed out that they were not only new but also historic.
“The last time own resources for the institutions were officially proposed was the year I was born, which was, it is no secret, was 1957,” revealed the Austrian Commissioner
Nothing much happened after that, and even the subsequent affirmation 15 years later did not lead to their introduction, Hahn recounted, with customs duties, agricultural levies and an annually adjusted percentage of the harmonised VAT base, plus contributions from Member States based on their GDP - always contentious and subject to intense wrangling in Council - combining to constitute the community budget.
It took another 15 years for Parliament’s co-rapporteur on Own Resources, Valérie Hayer (FR, Renew), to be born so the phrase ‘it took a long time coming’ is doubtless apt, and the qualification as a historic breakthrough befitting.
"This is major step forward for social and tax justice. We can now negotiate on those Own Resources to make them a reality, as we support all of them."
Like all MEPs commenting on the Commission’s announcement, Hayer welcomed the proposals, telling the Parliament Magazine, "this is major step forward for social and tax justice. We can now negotiate on those Own Resources to make them a reality, as we support all of them."
However, when Commissioner Hahn claimed that the proposed three elements of the “first pillar” - income from the Emissions Trading System (ETS), from the proposed Carbon Border Adjustment Mechanism (CBAM) and from the proposed minimum corporate tax – are “expected to generate on average a total of up to €17bn annually”, Hayer’s initial calculation was more cautious.
"The package as presented does not reach €15bn yet. We will negotiate to increase the share for the EU budget", Hayer told the Parliament Magazine.
What brought the Own Resources breakthrough about was, of course, the introduction of the unprecedented lending programme to achieve economic recovery after the Covid-19 pandemic, the Recovery and Resilience Facility (RRF) which the new income is meant to repay.
The S&D Group published a thread on Twitter on Wednesday highlighting their concerns: “To fully refinance the cost of the recovery plan, we need also a proposal which shall include a Financial Transaction Tax [FTT] and an own resource linked to the corporate sector. Big corporations and financial investors have to contribute to the recovery of the EU economy!”
For his part, Commissioner Hahn had stated in his press conference, that a second set of proposals, where an FTT would possibly be included, was being worked on.
The EPP Group’s vice-chair Esther de Lange (NL) meanwhile highlighted a priority of her group on Twitter: “The money generated from the new ETS for building and transport should be fully used to help EU-citizens with the green transition and not as a general contribution to the EU-budget.”
What all legislators agree on, is that the ball is now in the Council’s court and that Member States should act without delay. In a joint press release from Parliament’s Budgets (BUDG) Committee on Wednesday, both rapporteurs, Hayer and José Manuel Fernandes (PT, EPP), said, “We call on all EU capitals to acknowledge our common responsibility: repay the debt and stop narrowly focusing on national budgets or on each individual Own Resource in isolation.”
Advocating a common good approach, they added that “governments should rather consider the political and economic merits and distributive implications of the package as a whole”.
The two rapporteurs also stressed that Council would have to vote by July 2022, “as mentioned in the legally binding roadmap towards the introduction of new Own Resources”.
For the Greens/EFA Group, BUDG committee member and new leader of the German Greens delegation Rasmus Andresen commented - also welcoming the Commission’s proposals tackling letterbox companies presented the same day:
“Now it is up to the Member States whether they are willing to do what is necessary and support more European Own Resources [for] measures such as those against letterbox companies.”
From the Committee on Economic and Monetary Affairs, veteran legislator Markus Ferber (DE, EPP) commented in a press release:
"The Member States must now process the Commission proposals seriously and quickly. If the Council puts off the debate on Own Resources until the last possible day, we won't even need to talk about new spending programmes”.
Council President Charles Michel, making particular reference to the proposed minimum corporate tax, as agreed in principle by the OECD and the G20 in the summer, commented, “The EU is leading by example. Today’s @EU_Commission proposal is a major step for the implementation of the @OECD global agreement on minimum effective taxation. This is an important milestone towards a fairer world.”
MEPs will begin closer scrutiny of the proposals in the BUDG committee first, debating with the Commission in a meeting scheduled for 13 January.