Reform proposal

It would be a return to the origins, to the statutory dispositions contained in the founding European Economic Community Treaty of 1957. However, the proposed revision of the EU budget sounds like a revolution. “The proposal is impossible, albeit realistic”, explained the three determined MEPs who submitted the proposal, namely Jutta Haug (Socialists and Democrats, Germany), MEP Alain Lamassoure (European People’s Party, France) and Guy Verhofstadt (Liberal-Democrats, Belgium).The figures don’t balance. The President of the Budget Committee at the Strasbourg Parliament Alain Lamassoure, who has a lot of experience in these capacities, proposes to finance EU budget by pooling new resources. “In the light of the ongoing events in the Arab world the EU is called to step up border control, humanitarian aid to Libya and financial relief to Tunisia. But with which funds?” He added: “It should be remembered that the Lisbon Treaty stipulates greater EU powers. However, 2010 and 2011 budgets – and predictably the 2012 budget – don’t provide for the funding”. The figures don’t balance. What is your understanding of European budget funding? “Today – claims Jutta Haug – national contributions to EU budget range from 75 to 80%”: each Member State contributes an annual sum to Brussels’ budget calculated on the basis of national GDPs (exception made for single cases such as the “discount” granted to the United Kingdom since the times of Mrs. Thatcher). “Originally, GDP resources were expected to be of short duration, as they were replaced by Community resources”. It happened from 1970 to 1988, after which national contributions were reintroduced. “This is when the EU gradually lost its financial autonomy”, Haug added.Without increasing taxes? “We must break the taboo of national resources. It is necessary to undertake a thorough debate on the issue and this is the right moment. The Commission is called to develop a proposal for the 2012 budget” that will be addressed in the talks between EU Parliament and Council, the two budget authorities. “The guidelines for the multi-year financial framework are expected in mid-June”. Also Guy Verhofstadt is a convinced Europeanist with long-dated political experience. He said: “A reform of the system geared towards own resources for EU financial autonomy is possible provided that it is based on authentic political determination”. “Our proposals – he underlines – are based on current EU budget figures – 126.5 billion euro – that don’t envisage an increase in overall resources”, amounting to approximately 1% of EU27 GDP. According to the MEPs – who claimed that their joint stand extends beyond their respective political orientations – fully funding the EU is possible “without increasing fiscal burden on citizens nor violating national financial and fiscal sovereignty”.State contributions and Eurobonds. “According to our calculations – said Jutta Haug – resources can be pooled to fund common policies. For example, applying a 1% value-added tax on consumption at EU level would raise 57 billion euro a year”. The three MEPs declare that applying a ‘carbon tariff’ on imported products would provide for 38 billion financing. “A 0.05% tax on financial transaction, if applied, would raise 10 million euro”. To this should be added the EU own resources (18 billion), deriving from custom duties and agricultural levy. No fiscal burden but more fiscal revenue… In reality the proponents of financial autonomy submitted a set of proposals, but the core of the message is the same. “In this way, national contributions to the EU could be eliminated”, Verhofstadt explained. “This would make the budget simpler and more transparent, and would step up citizens’ interest for the EU”, thus better ascertaining the effectiveness of budget management. An emphasis is made: “Given the ongoing financial crisis governments have set aside public investment. For example – said Lamassoure – the Commission claims infrastructures are needed by 2020, whose costs amount to 1 800 billion euro. These funds could be obtained with European bonds issued by the European Investment Bank to fund major projects in the area of transport, energy, Information Technology and research, namely, the famous “Eurobonds”, whose adoption is supported by an increasing number of people.