EU's long term budget: MEPs to push for new income system

Friday, June 08, 2012

Brussels: Members of European Parliament (MEPs) will debate and vote on 13 June on a resolution outlining the EP's position on the EU's long-term budget, also known as the multi annual financial framework (MFF). The draft resolution insists on a reform of the income system for the EU budget, including the introduction of a financial transaction tax and a new VAT, in order to slash member states contributions. The Parliament wants to send out a strong signal to member states ahead of the Council meeting on 28 and 29 June.

New system for own resources

The resolution states that the EP will not approve the next long-term budget for 2014 - 2020 without a political agreement on a reform of the own-resource system, which would end existing rebates and other correction mechanisms.

MEPs want to introduce a new income system based on EU taxes and levies at the expense of the current system based on member states' gross national income. This would reduce national contributions to the EU budget. MEPs believe such a system would limit the discussions between net payers and net receivers in the Council, since a larger part of budget would be financed by “European money”.

Bulgarian Social-Democrat Ivailo Kalfin, one of the authors of the resolution, said: "We insist on an appropriate own resources system. That would allow the member states to decrease their contributions to the EU budget and thereby help them to consolidate their national budgets during the difficult times."

German Christian-Democrat Reimer Böge, the other author of the resolution, said: "The Treaty, which sets out the guiding principles for the MFF, clearly provides that 'the budget shall be financed wholly from own resources'. This should finally be acknowledged by the member states still reluctant to reform the financing of the EU budget."

Sufficient funding and more flexibility

The two MEPs responsible for the resolution also stress the need for a sufficient budget and enhanced flexibility.

Bögesaid, "For the Parliament, the level of resources, flexibility and the revenue side constitute the core issues of the MFF negotiations. If the Council does not want to risk the EP withholding its consent to the MFF, it should take account of the three points which are not negotiable for the EP: a robust budget that ensures adequate financing of the Union's political goals, enhanced budgetary flexibility, and a reform of the revenue side towards genuine own resources."

Kalfin added, "We would like to see more flexibility among the headings, between the financial years and the possibility to increase the ceilings in case of major unforeseen developments."

Under the Lisbon Treaty, the budget cannot be adopted without the Parliament's consent, and the members of the Parliaments´ negotiation team are ready to use their newly gained power to influence the negotiations. Böge explained, "On behalf of the negotiating team I can affirm our readiness to enter into negotiations with the Council. We have a clear mandate which we will firmly and stubbornly defend."
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