This week the European Parliament debated two reports – one on the costs of paying off the debt incurred in connection with the financing of the Reconstruction Fund, the other on the so-called second own resources package, i.e. new EU taxes .
Particularly disturbing was the tone of the first report by the chairman of the budget committee of the EP, Johan Van Overtveldt, member of our ECR group, former finance minister of the Belgian government. He emphasized that since last year debt servicing costs are clearly higher than assumed when the Reconstruction Fund concept was created, and will be even higher due to further interest rate hikes by the European Central Bank (ECB). In addition, the chairman of the budget committee emphasized that the European Commission, for reasons that are unclear, did not want to provide Parliament with data showing the actual increase in these costs, which is why the report contains estimates.
I spoke in this debate and in the first report I emphasized that concerns about the much higher indebtedness of the EU Next Generation Fund have materialized. For example, of the 1 billion euros expected for 2023, they will amount to almost 2.4 billion euros, and even higher in the following years. It seems that in the years 2021-2027 they will be at least twice as high as the previously predicted €15 billion.
However, I emphasized that they should be financed from the existing instruments, especially the flexibility instrument, while in the mid-term review of the MFF that is about to start, we should mainly focus on generating a fund to cover the costs of the aggression of Russia against Ukraine, the consequences of the war for the agricultural sector, the development of technical infrastructure on the border between the EU and Ukraine or the security of the EU’s external borders). These costs were and still are mainly borne by the Member States, in particular the so-called frontline countries, such as my country – Poland, amounting to at least 2.5%. GDP, while their repayment by the EU has so far been essentially symbolic.
New own resources
In the second case, ie new own resources, I pointed out that the new taxes are included in the so-called I have a basket of EC proposals, in particular the so-called (share in ETS, CBAM) tax less wealthy countries more than rich countries , and thus the exact opposite of the current contribution calculated on the basis of the Gross National Income (GNI) of individual Member States. I added that this is not in line with Protocol 28 to the Treaty on the Functioning of the European Union (TFEU) and therefore cannot be supported by Poland.
I also noted that the proposals in the so-called En basket, such as donating 25 percent. of the ETS revenue goes to the EU budget means that a country like Poland is deprived of a large part of its revenue and thus seriously hampers the implementation of EU climate and energy policy. As for the so-called Basket of Own Revenues, which the EC is working on, Poland expects it to include proposals related to the activities of large companies in the digital and financial markets, which benefit from operating in the large EU market, with nearly 450 million consumers.
Unfortunately, everything points to the fact that it will be very difficult to generate additional resources within the existing multi-annual budget for debt repayment, and therefore proposals will probably come from the EC for the Member States to cover these costs with an additional contribution. For Poland, this is an unacceptable proposal, as is the reduction in revenues from the sale of CO2 emission allowances (EU ETS) proposed by the European Commission, part of which will go to the EU budget.
Source: wPolityce