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Cities and regions demand new revenue sources for the EU budget  

​ Local leaders are worried that the new own resources proposed by the European Commission will not be enough to finance the EU's challenges and repay the debt generated by the Recovery Plan.

The budget of the European Union needs new sources of revenue not only to repay the common debt created by the EU Recovery Plan, but also to increase the Union's financial autonomy in a permanent way. However, the new own resources proposed by the European Commission, on which the other EU institution are now negotiating, will not be enough to finance new tasks for the European Union and to keep supporting priorities such as the fight against climate change and territorial disparities. These are the main messages of the opinion on the "next generation of own resources for the EU budget" adopted on 30 November at the plenary of the European Committee of the Regions (CoR).

The rapporteur Nathalie Sarrabezolles (FR/PES), Councillor of the Finistère Departmental Council, said: " The recovery after the Covid-19 pandemic, the consequences of the war in Ukraine, the social impact of the high energy prices show that the EU budget needs to become more transparent, flexible and less dependent on Member States' individual calculations. A 'juste retour' mindset is a major obstacle in achieving more European added value through the EU budget. The proposed new own resources are a first step in the right direction – the second step has to follow in 2023 ."

The three new sources of revenues proposed by the European Commission are: a new emissions trading system, an EU carbon border adjustment mechanism (CBAM), and revenues related to the corporate taxation of multinationals based on a proposal agreed by the OECD/G20 over the summer.

The three new resources will yield up to €17 billion per year from 2026 to 2030, according to European Commission estimations. Local leaders warned that this amount will not be sufficient to cover both the costs of repaying the Next Generation EU debt (€15 billion/year) and finance the new Social Climate Fund (€9.7 billion/year), that will be created to mitigate the social impact of the green transition in Europe. Therefore, while they welcome the creation of new own resources, cities and regions urge the European Commission to continue work on proposals for new own resources without delay. The European Commission included in its Work Programme for next year a second set of new own resources for the third quarter of 2023.

The Committee also asks to closely monitor the impact of the new sources of revenues on EU markets, including SMEs and farming, as well as on households and consumers.

Background:

The European Commission put forward its proposal for new own resources for the EU budget in December 2021 . The European Parliament adopted its position last week. The final green light is in the hands of the Council of the EU, which

can adopt the decision by unanimity after having consulted the European Parliament. Before entering into force, the new legislation needs to be ratified by all member states.

Contact:

pressecdr@cor.europa.eu
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