“Budgets are not bookkeeping exercises - they are about priorities and ambition. They translate our future into figures.” - Jean-Claude Juncker
How do we keep our strength after Brexit? How do we foot the €15bn annual bill left by the departure of the United Kingdom?
Do we want to live in a Europe that stands together and is able to address political developments such as Brexit, populism, nationalism, Trump and Putin?
genuine own resources remains the only option for adequate financing
We want Europe to master its own future and we want to live in a Union that strengthens investment, promotes employment and further supports innovation and the competitiveness of European companies, as well as prioritising the safety of its citizens.
We need the Union to continue to support agriculture and cohesion policies at the current level, while providing for additional funding to deal with new challenges such as security, defence or migration.
Unless the Member States agree to increase the level of their national contributions to the EU budget to 1.3% of their Gross National Income (GNI), the introduction of new, genuine EU own resources remains the only option for adequately financing the Europe we want.
If we go back to 1957, Europe agreed in Rome that the European Economic Community was to be financed by national contributions for a transitional period only and subsequently by a system of own resources.
As the transitional period ended in 1970, two genuine own resources were introduced, namely agricultural levies and customs duties, complemented by a third resource based on VAT.
Years later, these own resources became insufficient and in 1988, a new own resource was introduced, based on the Member States’ GNI.
Since its creation, the GNI-based resource has significantly increased its share within the EU budget, from 11% in 1988 to 69% in 2014, turning a ‘residual’ and ‘balancing’ resource into the largest source of revenue for the EU budget today.
A simpler and more transparent revenue system
In 2014, the excruciatingly hard 2014-2020 long-term budget negotiations clearly exposed the need to reform Europe’s revenue system into a simpler and more transparent one that European citizens can understand.
By progressively replacing GNI-based contributions, we could end the anti-European focus on fair return on net balances.
Europe must depart from the concept of net operating balance. There is now a strong case for eliminating all rebates and corrections.
Brexit gives us a unique opportunity to make this happen.
There are several options on the table for the EU to generate the necessary revenue, from taxing financial transactions to reforming the statistical VAT-based own resource.
In addition, we believe that, from 2027, the long-term EU budget should have a duration of 10 years - a 5+5 period with a mandatory mid-term revision. This would align the budget period with the political cycle of the European Parliament and the Commission.
A decision on the post-2020 financing of the EU has to be taken before the end of the current parliamentary term (and before the 2019 European Parliament elections), to allow for the swift adoption of all sectorial regulations and the launch of new EU programmes on 1 January 2021.
Please remember that when Europe is deciding its long-term budget, it is deciding its own future.