Commission planning the future sources of financing EU budget

by Petra Piitulainen and Minna-Riikka Härkönen (Group 4)

Conference of EU’s financial frame work for 2014-2020 will be held on Thursday 22 March in Denmark. The agreement of financing EU budget should be found by the end of this year. The most important question in negotiations is how much money can be used to run EU.

The budget commissioner Janusz Lewandovski is expecting negotiations about the headings in the financial framework to be harder than ever. “The development in political climate in Finland and Netherlands shows that we live in more euro skeptic atmosphere. That makes decision-making harder”.

According to Finnish MEP Carl Haglund, the Commission is willing to add alternative sources of finance in order to cut direct payments of member countries. One way could be by expanding value added tax base and tax markets of finance. Great Britain has however objected the latter strongly. There have also been discussions about taxation of roaming and coal.

Taxation of roaming would include wireless telecommunications inside the EU.  European Commission is also planning to charge airlines of carbon dioxide emissions, concerning flights landing or leaving from EU area according to length of the flight.

EUs own sources of the budget consist of value added tax, percentage based on gross national income; custom duties from outside EU, agricultural duties and sugar levies. There is a pressure of increasing the budget, but the Member Countries are not instantly agreeing.  

By the proposal the European Commission made last summer, budget would increase 2-5 percentage by the year 2020. The increase of this year was already 2 %.

The minister of foreign affairs in Finland, Alexander Stubb, says that Finland is open to all new suggestions Commission makes regarding to own resources. Own resources as a mechanism of financing EU is no longer realism, because it will mean in practice direct, or indirect system of taxes for EU.

Sources:

Helsingin Sanomat (11/02/2012)

European Parliament: Press Release (20/03/2012)

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