Notre Europe's viewpoint | 03/05/2007 

Reforming the EU budget is an old mantra. There are alternative ways to address the issue. The problem is that a majority of politicians, and a number of academics, confine themselves to the narrow frontiers of what seems politically realistic. Deeply sceptical about the prospects of reform, they take for granted the logic of "net returns' and the current size and structure of the EU budget. For most, reforming the EU budget basically means improving the clarity and simplicity of the budget, removing the elements conducive to fiscal imbalances among the member states -such as the UK rebate- and introducing minor changes in the structure of spending. Notre Europe claims this is not enough.

For Notre Europe, reforming the EU budget means ensuring that EU spending serves to finance common EU policies and goals rather than to balance member states' net contributions. It also means enhancing the EU's financial autonomy by creating a genuine EU own resource.

With the publication of the paper Funding the EU budget with a Genuine Own Resource: The case for a EU tax, by Jacques Le Cacheux, Notre Europe expects to encourage an informed and forward-looking debate on the creation of an EU tax. The paper clearly highlights the advantages of introducing an EU tax. A move in this direction would not only reduce the EU dependency on national contributions - thus making more difficult for member states to calculate their "net returns". It would also introduce greater visibility and legitimacy into the EU funding scheme.

As Jacques Le Cacheux shows, creating a tax for Europe would not be a big technical challenge. There are various perfectly credible proposals which satisfy the generally agreed requisites for an EU tax. The biggest challenge will be to convince all stakeholders - EU institutions, national governments, EU citizens - of the advantages of creating a genuine own-resource based scheme for Europe. The latter will require efforts to neutralise widespread false beliefs, such as the idea that an EU tax would undoubtedly lead to an increase in the overall tax burden for the citizens. It will also require a more extensive effort to publicise the advantages of having an EU tax, which are hardly known by the majority of citizens and politicians.