The political messages of this opinion covers the expectations in relation to possible new own resources of the EU Budget and their potential impact on cities and regions.
This opinion also provides timely input to the discussions at EU level before the European Commission puts forward a proposal for the new Multiannual Financial Framework post-2020 due before 1 January 2018.
The CoR opinion had been approved well in advance before the Commission put forward its proposal for a new MFF for 2021-2027, in order to allow the CoR rapporteur to influence the input of the European Parliament and the proposal itself. The following overview summarizes main elements of the CoR opinion being translated into the Commission's proposal:
an opportunity to create a vision of the priorities to be funded in the medium and long term in the framework of the EU budget and to reform its current system of funding: PARTLY TAKEN ON BOARD - the reform suggested is not as far-reaching as expected and it is not connected with a long term development vision of the EU
call for all of the correction mechanisms and rebates to be abolished: LARGELY ACCEPTED - system of rebates is proposed to be phased out progressively
A call for a simplification of EU policies: LARGELY ACCEPTED - Simplification and streamlining of the EU policies; proposal for a single rule book
Future MFF should both be focused on future challenges as well as having a provision for risks set within the budget: ACCEPTED - shift between some programmes and a Union Reserve to be created
Subsidiarity tests of the new own resources to be looked into more in depth: NOT COMPLETELY TAKEN INTO ACCOUNT - The proposal is missing the required information, although a basic subsidiarity analysis has been provided.
Recommendation of assessing and proposing the new own resources in the form of a "package" comprising various taxes, in order to balance out the effects of the new own resources on all levels of government, businesses and citizens: PARTLY ACCEPTED - the “package” is rather small, comprising only three new sources, but their impact on the different levels of government may be differentiated.
Recommendations on the common consolidated corporate tax base (CCCTB): BROADLY ACCEPTED, although the part on a specific tax on multinational companies not part of the MFF proposal.
A reformed VAT own resource: call for a single EU rate to a wider harmonised base: ACCEPTED - hugely streamlined calculation, call rate on a simplified VAT base
an own resource based on seigniorage could be envisaged, despite the risks related to its volatility and the fact that it concerns only the Member States of the euro area: PARTLY ACCEPTED - the seigniorage to be used as non-assigned revenue for the Stabilization Function
Carbon taxes and revenues from Emission Trading System: PARTLY ACCEPTED - ETS revenues to be used as a new own resource
Fuel tax: ACCEPTED - no fuel tax introduced
THE EUROPEAN COMMITTEE OF THE REGIONS
- underlines the challenges that the post-2020 EU budget will face in meeting evolving challenges in areas of European added value;
- welcomes the publication of the final report of the high-level group on own resources (the Monti report), and in particular its recommendations on the principles of European added value and subsidiarity, but regrets that this report does not address the size of the EU budget in the light of the priorities set by the EU;
- considers that this particular landscape, marked by the various crises, the UK's withdrawal from the EU, and the reflection process on the future of Europe, as well as the recommendations in the Monti report, provides an opportunity to create a vision of the priorities to be funded in the medium and long term in the framework of the EU budget and to reform its current system of funding;
- considers the current system to be sub-optimal, in particular because it is too dependent on national contributions. This approach tends to disregard the benefits of the single market and of certain EU policies and place the focus solely on the rate of return. This approach also fails to take into account the cost of "non-Europe";
- therefore calls for all of the correction mechanisms and rebates to be abolished;
- feels that the aim of this reform should be to create a clearer, more provident and balanced budget that responds to European challenges and is based on a larger proportion of new own resources and a reduction in national contributions, while seeking to minimise additional burdens on taxpayers;
- believes that creating a link between taxes levied and specific priority EU policies would have an educational value, which would lead to increased acceptability. The CoR recommends maintaining the principle of the universality of the EU budget.