The European Parliament adopted a resolution on Wednesday, May 10th, calling for new central EU taxes on multinational corporations, financial transactions, and cryptocurrency assets in a bid to tackle the problem of the EU’s financial deficit.
“The EU finances are going through a critical period where a lack of reform would have highly detrimental effects on the future of the European Union,” the text of the resolution reads, arguing that “the Union budget requires a diversified and enlarged set of own resources,” apart from the member states’ fixed annual contribution.
Furthermore, the document recommends the implementation of “statistics-based national contributions,” as an “incentive and reward for vigorous implementation of Union-level policies,” especially in social and environmental areas. In other words, those who fail to perfectly implement these policies could (theoretically) see their mandatory contributions raised.
The resolution was adopted by 365 in favor and 199 against in the plenary, but the text was first approved last month by the European Parliament’s budgetary committee, supported by the EPP, S&D, Greens, and Renew—the latter being responsible for tabling the file. The Renew rapporteur, French MEP Valérie Heyer, explained:
We can’t stick to the EU budget being 1 percent [of the bloc’s GDP], it’s a dogma and a limit we can’t work with.
We have Ukraine, strategic autonomy, climate financing and digital transition—so we need to invest more.
To solve the problem, the document put forward a number of recommendations to “diversify the EU’s financing sources and find a new revenue balance.” Apart from the already approved “global minimum tax,” it calls for separate, independent EU taxes on multinational corporations, financial transactions and services, cryptocurrencies and crypto-assets (such as NFTs), as well as companies who sell on the European market but employ third-country workers “who do not receive a decent wage” abroad.
The “statistics-based own resources” and other recommended revenue sources (such as increased levies, fees, fines, and penalties) are just icing on the cake.
In addition to the other arguments, the supporters of the plan also explained that an EU scheme for establishing “own revenue” streams was inevitable in order to repay the Recovery and Resilience Facility (RRF)—a loan of €724 billion as part of the Pandemic Recovery Plan—the first-ever instance of joint EU debt.
The two conservative parties (ECR and ID) as well as two independent MEPs were the only ones on the committee to vote against the measure, arguing that “tax-to-spend” policies do little to stabilize the EU’s budgetary shortcomings in the long term, and that the Commission should cut funds elsewhere instead.
