Saturday, January 28, 2017
''No taxes for Europe'' cologne institut ofeconomic research
On Friday, the ECOFIN Council will discuss the report that the High Level Group of Experts, chaired by Mario Monti, has recently published. There is, in any case, a need for action: the Union's current financing system needs to be simplified. In addition, the United Kingdom, a large net contributor, will leave the EU.
EU taxation is not an alternative, however. As long as the EU budget is financed mainly through contributions from the Member States, national governments have an interest in an economically effective distribution of EU funds. The introduction of a European tax would weaken this interest, as EU revenues would flow directly into the Brussels budget. There is only an incentive to redeploy and reprioritize funding and finance projects which are of rising interest to the whole of Europe, when the EU budget restriction meets the fiscal interest of the Member States. Projects of rising interest are a common foreign and security policy and a common refugee policy.