Funding the EU Budget with a Genuine Own Resource: The Case for a European Tax

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The EU budget is a reflection of the general state of the European integration process. Widespread dissatisfaction with its current mechanisms and achievements is therefore to be taken seriously. The protracted negotiations on the 2007–2013 EU medium-term financial perspectives, and the almost unanimous, bi-partisan rejection in January 2006 by the European Parliament of the final December 2005 compromise painstakingly built by the EU Council have clearly provided ample evidence of the highly unsatisfactory character of the EU budgetary procedure and its outcomes. Indeed, while reporting on the “success” of the budget negotiations and on the happy end of a stalemate that had started with the failure of the June 2005 Council to agree on the financial perspectives, the December 2005 Council conclusions immediately called for a mid-term review in 2008–2009 and asked the Commission to prepare proposals for a reform of the EU budget resource system. Similarly, while eventually adopting a slightly amended budget proposal after a tri-institutional compromise in April 2006, the European Parliament decided to harden the mandate of the Commission for proposing the creation of a genuine own resource for the EU budget. In its June 2006 Report on the Council decision on the system of the European Communities’ own resources (EU Parliament, 2006), the Parliament explicitly makes the current system of national contributions responsible, at least in part, for what it regards as the unsatisfactory functioning and outcome of the recent European budgetary negotiations: “… the aim of such review should be to reach agreement on a new, comprehensive financial system…, and pointed out that, in particular, the system of own resources as well as the expenditure side needed to be reformed urgently in order to avoid the same painful experience of national bargaining for the next financial framework.” (Amendment to Article 5, italics added).KeywordsHorizontal EquityExcise DutyNational ContributionEuropean BudgetUnanimity Decision RuleThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.