The share of EU member states’ budget contributions that is based on gross national income (GNI) should be cut from 64% to 40% of total EU revenue and replaced by real “own resources”, says Parliament in three resolutions voted on Wednesday. Value-added tax based revenue, which today provides 11% of the EU budget, also needs drastic reform, it adds.
Current budget breakdown breaches the Treaty
Parliament has consistently called for the EU budget to be financed wholly by own resources, as stipulated in the Treaty, and has regularly highlighted the shortcomings and limits of the existing own resources system, which it considers "non-transparent, unfair, not subject to parliamentary control, highly complex and totally incomprehensible to European citizens". Furthermore, this system “violates, in essence, the letter and the spirit of the Treaty”, it says.
Yet more rebates and exceptions
Parliament regrets that the legislative proposals tabled by the European Commission - for inter alia a Financial transaction Tax and reform of the VAT-based contribution - were disregarded and that the Council of Ministers made no progress towards reforming the own resources system. On the contrary, the political agreement of 8 February 2013 in the European Council even introduced new rebates and exceptions.
High Level Group on own resources reform
The opinion set out in the three resolutions matter in view of the work of the recently-established High Level Group on Own Resources, which is to propose ways in 2016 to modernise arrangements for financing the EU’s next long-run budget, the Multiannual Financial Framework (MFF). A first assessment by this group should be available by the end of 2014.
The High Level Group comprises three members each from the Council of Ministers, European Commission and European Parliament, led by Italy’s former Prime Minister Mario Monti. Parliament is represented by Alain Lamassoure (EPP, FR), Ivailo Kalfin (S&D, BG) and Guy Verhofstadt (ALDE, BE).