Why should the European Union reboot the debate on financing the EU budget?

Publishing date
25 March 2024
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The debate on financing the European Union budget is never ending. Despite the need for new resources to meet increasing spending demands, not least repayment of debt incurred as part of the EU’s post-pandemic economic recovery package (NextGenerationEU), there is only slow progress towards agreement on a package of new own resources.

Limited progress so far has led to the introduction of a levy paid by EU members depending on plastic bag packaging waste generated in their territory and not recycled. Meanwhile, the European Commission has proposed resources for the EU budget from emission trading revenues and from levies collected under the EU Carbon Border Adjustment Mechanism (CBAM). These proposals are pragmatic and move in the right direction. They would increase the share of ‘genuine’ own resources compared to statistical aggregates (the VAT resource and the gross national income resource). However, they are missing the opportunity to build further common tax policies in Europe.

Tax is at the core of a country’s sovereignty. It is no surprise that unanimity, the decision-making rule in the EU, has hindered progress towards common tax policies, not to mention harmonisation. However, recent international progress at the global level has allowed the EU to adopt a series of common tax rules over the past decade. Most recently, a global minimum corporate income tax of 15% has been adopted and is being implemented by EU members as an attempt to protect their tax base from ‘tax leakage’, wherein profits are shifted from high-tax to low-tax EU countries and from there onto no or nominal-tax non-EU jurisdictions. This expected additional resource should have become a new own resource for the EU budget. In the same vein, focusing on protecting revenues of EU members from tax external corporate income tax as well as personal income tax competition by common tax borders could offer scope for new ‘genuine’ tax borders.

Find out more about the EU's budget by reading Pascal Saint-Amans' latest Policy brief 'Broader border taxes: a new option for European Union budget resources'.

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About the authors

  • Pascal Saint-Amans

    Pascal Saint-Amans is a Non-Resident fellow at Bruegel, focusing his research on international tax policy. He was Director of the Centre for Tax Policy and Administration at the OECD from 1 February 2012 until October 2022. Mr. Saint-Amans, a French national, joined the OECD in September 2007 as Head of the International Co-operation and Tax Competition Division in the CTPA.  He played a key role in the advancement of the OECD tax transparency agenda in the context of the G20. 

     Mr. Saint-Amans graduated from the National School of Administration (ENA) in 1996 and having earned a degree in history, he also received a degree from the Institut d’études politiques of Paris.

    He was an official in the French Ministry for Finance for nearly a decade, where he held various positions within the Treasury, including heading the supervision of the EU work on direct taxes. He was Financial director of the French Energy Regulation Agency before becoming head of the tax treaty negotiations and mutual agreement procedures.

    Pascal joined Brunswick Group as a partner in November 2022. He is also a Professor at Lausanne Faculty of Law.

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