Why is the European Commission bidding Washington on taxation? – POLITICS
Valérie Hayer (FR, Renew Europe) and José Manuel Fernandes (PT, EPP) are MEPs and co-rapporteurs on the reimbursement of the recovery plan and the EU’s own resources.
Can we still trust the European Commission when it comes to repaying the debt of the European Union? The answer seems to be no. “The only party that can count on the Commission is the United States.
The Commission is about to break a legally binding agreement it concluded with MEPs and EU ambassadors just a few months ago. According to the agreement, the debt was to be repaid with the proceeds of new ‘own resources’, including a Carbon Frontier Adjustment Mechanism (CBAM), additional fees using the Emissions Trading System ( ETS) and a new digital EU tax. Today, these three new sources of revenue for the EU budget are called into question.
This is a problem because there are only three options to repay this debt: additional national contributions (i.e. additional taxpayer money), cuts to EU programs like agricultural policy (PAC) or Erasmus, or make digital giants, big industrial polluters, foreign CO2 importers and aggressive stock market players pay.
The third solution is the right one – and it is the one we negotiated last year. The other two are unfair. And it would be surprisingly ironic if the forward-looking EU budget were cut by 10% in order to pay off a program called ‘Next Generation EU’.
And yet, American pressure regarding CBAM and the EU’s digital tax demonstrated the political weakness of this Commission, leading to last week’s decision to postpone sine die the EU digital tax at the request of US Treasury Secretary Janet Yellen, due to global negotiations on tax reform at the Organization for Economic Co-operation and Development (OECD).
The OECD / G20 pre-agreement, which aims to set an overall minimum corporate tax rate of 15%, is a major achievement, and the Commission is right to support it. However, the decision to postpone the EU’s digital tax is outrageous. With regard to its strategic interests, we expect a “geopolitical” Commission to not yield to pressure from third countries. We did not vote in the European elections for a European executive that prioritizes American interests over our own.
In addition, Washington still imposes several conditions on the final agreement. What if the US Senate does not approve the deal? Whether or not a final deal is reached, the EU’s digital tax would be a complementary way to protect European interests and further ensure tax fairness beyond this deal.
As if that were not enough, the Commission is also considering taking another unilateral decision today, also postponing the other two new own resources to an unspecified date.
This is unacceptable. We urge the College of Commissioners to preserve its credibility by thinking strategically and acting in the interests of the EU citizens it is supposed to serve.
We call on the Commission to take two steps. First, it must honor its commitment to present the new own resources as soon as possible, including the EU’s complementary digital tax.
Second, it should take advantage of the OECD / G20 agreement and channel part of the revenues that will be generated by this comprehensive reform of international taxation (around 50 billion euros in the EU) to the EU budget and the debt repayment of the EU. Member countries and third countries should not be allowed to keep all the money for their national budgets and let the EU face debt repayment without new own resources.
The recovery plan must prepare the construction of an EU that will benefit Europeans for decades, implementing the ecological and digital transition and offering new and improved employment prospects. However, without new own resources, the Commission would leave a worrying legacy for future generations: the debts of the past.
This is not what we promised them, and it is not what the Commission promised us in December 2020. Therefore, we will do everything in our power to put an end to the weak decisions of the Commission and getting those who are not currently paying their fair share of taxes to pay for the clawback – whether foreign powers like it or not.