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18th Oct 2021

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Europe not ready for EU tax, says incoming budget chief

  • Lewandowski: The time is not ripe for an EU-wide tax (Photo: ec.europa.eu)

The idea of an EU-wide tax is still politically too controversial to fly, but could not be ruled out in future, budget commissioner designate Janusz Lewandowski said Monday during his parliamentary hearings.

"Europe is probably not ready yet for a European tax. It could prove detrimental for our links with the citizens," the Polish economist and ex-MEP told his former colleagues dealing with budgetary issues.

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A proposal for such a scheme, put forward by French centre-right MEP Alain Lamassoure, now chairing the budget committee, had to be "taken into account" when negotiating EU's new multi-annual budget to start 2014, Mr Lewandowski added.

But in his view, the time was not ripe for a "purely fiscal" revenue. Currently, the bulk of the EU budget is made of national contributions, representing 1.24 percent of the gross national income (GNI). Import taxes and VAT make out the remaining 23 percent of the bloc's revenues.

He stressed that any decision to increase EU's own revenues had to be taken unanimously by member states. "If we introduce this, it has to be in line with simplicity, fiscal neutrality and the cost of collecting. There are different ways of taxing with an aim of increasing own recourses. I am not against the idea."

Mr Lewandowski's cautious line stands in contrast to the bolder wording of EU commission president Jose Manuel Barroso in his policy guidelines for the next commission, dating back to September last year, before he secured the vote of the parliament for his nomination.

The commission president at the time spoke out against "shirking" the issue of EU's own resources and criticised "a system of EU financing that has evolved piecemeal into a confusing and opaque mix of contributions and rebates."

Mr Lamassoure at one point stressed that realism should not lead Mr Lewandowski to give up on all such ambitions.

The presumptive commissioner replied that he was personally not against all the proposals put on the table, including a "Tobin tax" on financial transactions.

One the length of EU's next budget framework, Mr Lewandowski said he was in favour of reducing it from seven to five years, to match the mandate of the European Parliament.

Non-existing budget draft

A highly controversial draft proposal from the EU commission's budget services first leaked in October that suggested a radical overhaul of the EU budget to focus more on jobs, climate change and foreign policy rather than agriculture and regional aid was now in fact "non-existent," Mr Lewandowski said, when pressed by MEPs dealing with agricultural and regional policy.

He said it was unlikely that common agricultural policy (CAP) spending would be reduced further than the agreed 33 percent of the total EU budget, stressing that "contrary to popular belief, the agricultural lobby is quite well organised."

The Polish politician pointed at the 20-odd agriculture ministers gathered in Paris last month for a pro-CAP showcase meeting.

Mr Lewandowski also had a brief crossing of swords with his Polish predecessor in the EU commission, Danuta Hubner, in charge of regional policy. She criticised him for allegedly supposing that the policy needed new spending priorities, stressing that she already had started this reform.

"This is not quite right," he countered. "I said we need to strike a balance between innovation and the traditional approach, keeping what tradition has proved to be wise."

The Polish ex-MEP is widely seen as a safe bet in terms of getting the thumbs up to join the commission from his former colleagues in parliament.

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