Jose Manuel Barroso, President of the European Commission, has stated that
the tortuous discussions which led to an agreement between EU leaders on the bloc's
budget for the next seven years illustrates the need for a comprehensive overhaul
of the EU's funding mechanism, and he hinted at the possibility of an EU tax
to fund the budget.
After the usual midnight haggling, EU leaders agreed the next seven-year EU
budget on Saturday morning, with both the UK and Germany giving up money which
will go towards development support in the 10 new member states, including Cyprus
and Malta. The UK finally agreed to surrender EUR10.5bn of its budget rebate
over the seven years, up from an original EUR8bn, in return for a concession
by France that the Common Agricultural Policy will be part of a spending review
in 2008-2009.
At present, the EU budget is funded through a combination of import duties,
value added tax revenues and direct contributions from member states. However,
speaking two days after the EU budget was agreed, Barroso said that the time
has come for a complete review of the budget.
“We have to find a way of avoiding such a direct link between national
budgets and the European budget,” Barroso said.
“We have to think about some reform of the resources of the EU...We should
look at a system...that would go beyond negotiations between countries,"
he added.
The Commission is set to review the European budget by 2008/9 and Barroso indicated
that no options will be left off the table in its attempt to streamline the
process. “We are going to look at it without taboos,” he stated.
One of these options is likely to be a proposal for an EU tax, an idea supported
by the EU's Christian Democrat leaders including Wolfgang Schussel, Austrian
chancellor, Edmund Stoiber, Bavaria’s chancellor, and Nicolas Sarkozy,
leader of France’s centre-right UMP.
However, such a proposal is likely to be fiercely opposed by a number of member
states, including the United Kingdom, Ireland the Czech Republic, Estonia and
Slovakia, which would all have the power to veto the measure.
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