As the European Union prepares its next Multiannual Financial Framework, the debate has focused heavily on spending priorities. Defense, competitiveness, climate and cohesion all compete for attention. Yet policymakers risk overlooking a fundamental question: how the EU will pay for its ambitions? The revenue side of the new MFF is the political and economic backbone of Europe’s future.
From 2028 onwards, the EU will face a major new constraint: the repayment of the debt incurred under the NextGenerationEU recovery program. Annual repayments are estimated at around 25 to 30 billion euros, amounting to roughly 15% to 20% of the current EU budget.
Without new "own resources," these repayments could crowd out existing programs, leading to cuts in crucial areas at a time of mounting geopolitical tensions, climate pressures and technological competition. The European Commission's proposal for the next MFF advanced five new European financial resources, but their implementation risks being obstructed by single member states.
This article is part of The Parliament's special policy report "Mapping the EU's long-term budget"
Shared burden
The scale of Europe's investment challenge makes this even clearer. Around 800 billion euros in additional annual investment is needed to build the industrial and technological base required for Europe’s competitiveness and strategic autonomy.
Mario Draghi's report delivers a blunt diagnosis: no member state can shoulder this burden alone. Only a common European investment can mobilize sufficient resources. We need to limit the dependency of national contributions.
Own resources are central to this effort. The Commission has presented a package of new revenue sources, designed to generate around 58.2 billion euros per year without increasing the overall gross national income-based contributions of member states. These resources are intended both to finance NGEU repayments — estimated at 21 billion euros annually from 2028 — and replace part of the national contributions that currently dominate the EU budget.
The proposal includes allocating 30% of revenues from the Emissions Trading System and 75% of revenues from the Carbon Border Adjustment Mechanism directly to the EU budget, together amounting to roughly 11 billion euros per year.
A statistical own resource based on electronic waste, levied at two euros per kilogram, would raise around 15 billion euros.
A new tobacco consumption levy is expected to generate 11.2 billion euros yearly, while a Corporate Resource for Europe, known as CORE, would require companies with annual turnover above 100 million euros to pay a lump sum, raising 6.8 billion euros.
Finally, adjustments to existing resources — including higher contributions from non-recycled plastic packaging — would add a further 14.3 billion euros.
Behind the figures
Yet political reality cannot be ignored. These proposals are controversial among member states, and some will likely be watered down or blocked — for instance, Germany has already made it clear that it will oppose CORE. That is why alternative options must be on the table, and the Greens proposed an EU digital tax.
Today, Big Tech pays half the effective tax rate of traditional firms. A study I commissioned estimates that a 5% levy on e-commerce, digital advertising and cloud services could raise 37.5 billion euros annually — almost 19% of the EU's 2025 budget.
Drawing on existing Commission work and national experiences, the research concludes that a digital services tax would be the most feasible short-term option. With appropriate thresholds and exemptions, as already implemented in France, the burden would fall on large digital corporations rather than smaller firms.
Other options, such as a frequent flyer charge or a levy on cryptocurrencies, could further strengthen the EU's revenue base. Another proposal could be a financial transaction tax, as proposed in the Mario Monti report of 2016.
If Europe wants to act, it must be able to pay. The Commission should seize this moment to strengthen and complement its proposal. Europe's ambitions deserve a budget with dignified revenues to match.
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