Europe needs more cash, Belgian PM says – POLITICO

Weeks after member states failed to unanimously commit to funding for war-torn Ukraine, Belgian Prime Minister Alexander de Croo told Politico that the European Union needs more of its own funding. .

As Russia invades Ukraine, the global pandemic comes to an end, and Israel continues its war in Gaza, Europeans are looking more than ever to the EU for strategic solutions to global problems. , said De Croo, whose country chaired the Security Council. EU on January 1st.

“For all the big challenges we face, Europeans, even the more eurosceptic ones, look to Europe to solve them because countries cannot solve them alone,” he said. Stated. “If we want to respond to these calls, we need to readjust our priorities, which inevitably leads to a debate: Where is the money coming from?”

De Croo’s proposal comes as EU leaders negotiate a review of the EU’s budget for 2021-2027, which includes funding for Ukraine. EU member states had previously opposed the European Commission’s request for an additional 66 billion euros to cover unforeseen expenses such as higher borrowing costs for the region’s funds after the pandemic. At the last European Council meeting in December, the amount of new funding was reduced to 21 billion euros in order to gain member states’ participation.

The EU currently holds its own cash, mainly from contributions from its 27 member states and tariffs on imports from outside the EU, which are funneled into the larger EU framework. In 2021, Brussels introduced an EU-wide plastics tax aimed at bringing around €6 billion a year into the coffers of Berlaymont, the headquarters of the European Commission, compared to the EU budget of €1.2 trillion in the region. It’s no big deal. From 2021 to 2027.

De Croo’s proposal raises the controversial possibility of imposing even broader taxes ahead of June’s European elections. A third election is now approaching, with more than 400 million people across the continent heading to the polls in June amid soaring interest rates and continued funding to Ukraine. Year of war after the invasion of Russia in February 2022.

However, Belgian liberals avoided specifying where the additional revenue would come from, such as from European taxes, other fiscal measures such as member state contributions, or cuts to EU budget items. “I don’t want to comment too much on that if I want to have a good discussion,” Decroo said. Although most other EU leaders find it difficult to raise their own contributions, he understands that asking Europe to pay more while refusing to raise its own contributions poses a dilemma. He added that he is doing so.

So far, proposals for new resources have been blocked by a coalition of mainly northern and eastern European countries opposed to shifting tax collection from their respective capitals to Brussels. Spending countries such as the Netherlands and Scandinavia have repeatedly called for a reduction in the EU budget.

“Many frugal countries will have lower carbon emissions and therefore pay less EU taxes. But their country’s problem is a philosophical one. They don’t want the EU to be taxed. “No,” said an EU official on condition of anonymity. Authorized to speak on the record.

Hungary’s right-wing government also opposes plans to impose a tax across the region to cover higher interest rates on regional funds after the pandemic. Budapest’s share of EU funds has been frozen due to rule of law deficiencies.

The European Parliament is currently calling for an EU-wide tax on carbon emissions and the profits of multinational companies. The measures are expected to generate 36 billion euros a year once the new budget comes into force in 2028. Supporters of additional revenue for the European Commission hope that the Belgian president will broker a compromise.

“The technical deadline is to complete this before the new project starts. [budget] However, the political deadline is elections in June 2024,” the EU official said. The stakes are high and the deadline short, as Belgium has six months to cede the chair to Hungary, which opposes EU-wide taxation and is blocking 50 billion euros in aid to Ukraine.

Another issue is how the EU will use the funds, Decroux said. Currently, the EU’s two biggest sources of funding go to agriculture and to supporting member states with low per capita GDP, known as the Cohesion Fund. “Agriculture and solidarity will not go away, but…other things will have to be added and that is inevitable. We will discuss this in the next budget. What are Europe’s priorities? ?”

De Croo said such dialogue will become even more important as the bloc prepares to welcome new members such as Ukraine. In December, EU leaders agreed to start accession talks with Kiev, a key step toward integrating Ukraine into the European project.

“We need to get better before we get bigger,” Decroo said.

Direct funding from Europe would also give the EU greater democratic legitimacy, the Belgian leader added.

“The legitimacy of democracies is tied to their finances. They are inseparable. Today, European finances are linked in indirect and precarious ways. We all need to consult our national parliaments. We have our own ways, but if Europe is to continue to move in the direction it is going – and that’s where the driving force is – we have to have something more direct. I have to.”