The European Commission has warned EU member states that failure to agree on new bloc-wide taxes could force a 40% reduction in the long-term European Union budget for 2028–2034. According to reporting by Euractiv, the Commission proposes five new revenue sources to bridge a potential funding gap.
Why is the European Union facing a budget shortfall?
The EU is looking at a funding gap that threatens the proposed budget, which will reach nearly two trillion euros. According to the European Commission, the current reliance on direct member state contributions is a primary source of funding. To cover expenses for 2028–2034, the Commission has proposed five new “own resources,” including taxes on corporate profits, electronic waste, tobacco, and carbon prices and greenhouse gas emissions.
The European Commission estimates that these proposed new taxes could generate approximately 66 billion euros annually.
How would a 40% budget cut affect EU programs?
If member states reject the new tax proposals and refuse to increase direct contributions, the European Commission warns that spending across the board could plummet by as much as 40%. According to data cited by Euractiv, this would force a difficult prioritization of funds. While agriculture and cohesion policy are politically important, the Commission notes that if those areas are shielded, funding for “modernization” sectors—such as security and competitiveness—could face cuts of up to 80 percent.
Student mobility programs are also at risk. The popular Erasmus exchange program could see its budget reduced by roughly one-third under the proposed austerity scenario.
Which member states oppose the new tax plans?
Negotiations remain stalled due to a lack of consensus among the member states. According to reports, the opposition is fragmented across different sectors:
- France: Has stated it will not support a budget agreement without new taxes.
- Germany: Opposes the tax aimed at companies.
- Italy and Poland: Have voiced opposition to the greenhouse gas emission tax.
- Austria and Sweden: Remain skeptical.
What is the timeline for a resolution?
António Costa has urged member states to accelerate progress, warning that failing to reach a consensus before the end of the year will make a final budget agreement increasingly difficult to achieve.
Keep an eye on the upcoming European Council summits.
Frequently Asked Questions
What are the proposed “own resources” for the EU budget?
The Commission has proposed five categories: taxes on corporate income, tobacco, electronic waste, carbon prices, and greenhouse gas emissions.
Could the EU budget really be cut by 40%?
Yes, according to the European Commission, a 40% reduction is the calculated consequence if neither new tax revenues are adopted nor national contributions increased to cover the projected deficit.
Which programs are most at risk?
While agriculture and cohesion funds are politically sensitive, the Commission suggests that modernization efforts, including security and competitiveness, could see significant funding slashes if other areas are protected.
