Key facts
- European Council President António Costa stated that a deal on the EU's next seven-year budget requires agreement on new EU-wide taxes.
- Costa warned that without new taxes, the EU would face either reduced ambitions for programs like security and defense, or increased national contributions.
- The European Commission has proposed five new levies, including taxes on carbon imports, emissions, corporate profits, tobacco, and electronic waste.
- Luxembourg's Prime Minister Luc Frieden rejected the proposed EU tobacco tax, citing disproportionate impact on his country.
- EU ministers will discuss the question of new taxes at a meeting in Brussels on September 22.
European Council President António Costa is pressing EU governments to agree on new EU-wide taxes to fund the bloc's upcoming seven-year budget, warning that a failure to do so will lead to either significant cuts in key policy areas or increased financial burdens on member states.
During a visit to Croatia, Costa emphasized the urgency of reaching a consensus on these new revenue streams, referred to as 'own resources,' ahead of a crucial summit on October 15. He indicated that this summit would aim to finalize a basket of acceptable taxes. The European Commission had previously put forward five proposals, including levies on carbon imports, emissions, corporate profits, tobacco, and electronic waste, projected to generate €66 billion annually.
However, these proposals have faced considerable resistance from member states, who must unanimously approve each new tax. Luxembourg's Prime Minister Luc Frieden explicitly rejected the proposed tobacco tax, stating it would disproportionately impact his country. Costa cautioned that without new tax revenue, the EU would be forced to either scale back its ambitions in areas such as security, defense, and competitiveness, or increase national contributions, a move also problematic for member states.
Discussions on these new taxes are scheduled for a meeting of European ministers on September 22 in Brussels. The negotiations are critical to securing an overall budget deal by December, before national elections in France, Spain, and Italy in 2027 could complicate matters further. Costa is actively touring EU capitals to gauge concerns and identify areas for compromise.