Financial transactions tax could raise €30 billion a year

European Commission wants to increase the share of the EU’s finances that come from ‘own resources’.

An EU-wide financial transactions tax could generate €30 billion a year by 2020, according to figures published today by the European Commission.

The Commission has proposed creating a financial transactions tax as a way of financing part of the EU’s multiannual budget for 2014-20.

Commission figures suggest that this tax could generate up €37bn in 2020. The transactions tax is one part of proposals by the Commission to increase the share of the EU’s finances that come from so-called ‘own resources’ -finances collected by the Commission rather than being direct contributions from national governments.

The Commission has also proposed a new EU VAT system that would see a small share of national governments’ VAT revenues (1%-2%) going to finance the EU budget. According to Commission estimates, this new VAT-based tax could raise €29bn by 2020. This would take the total share of funding provided from own resources to around 40%.

At the moment, own resources account for 15% of funding for the EU’s budget while national governments provide the remaining 85% in direct contributions.

Yesterday, the Commission published proposals for the 2014-20 multiannual financial framework. The proposals foresee a total of €1,025bn in terms of commitments and €972bn in terms of payments for the period. The Commission has also proposed a budget of €58bn for programmes outside the EU budget. These include a number of emergency reserves, funds for workers affected by globalisation and financing for ITER, an international fusion research programme, and for the Global Monitoring for Environment and Security project.

Several national governments have rejected the Commission’s proposals for new taxes. Guido Westerwelle, Germany’s foreign minister, said yesterday (30 June): “Germany and a majority of member states reject an EU tax as it is contained in the Commission’s proposal.

“There is no need for such a tax because the EU does not have a financing problem.”

A spokesman for David Cameron, the UK’s prime minister, said the UK would “oppose new EU taxes which will introduce additional burdens for business and damage EU competitiveness”.

The French government, by contrast, said it was “open to a discussion” on the subject of new taxes, provided that such a tax replaced existing sources of funding and reduced contributions from national budgets.

A joint statement issued by the French ministers for EU affairs, the budget and agriculture said that France was “ready to work” along the lines of some of the Commission’s proposals, in particular taking a share of revenue from a financial transactions tax.

The ministers criticised the overall level of spending in the Commission’s proposals, which, it said, “could not be borne” by France, which already contributes €20bn a year to the EU’s finances. The three said that the level of payments for 2014-20 represented a 30% increase or an additional €250bn.

Click Here: Fjallraven Kanken Art Spring Landscape Backpacks