Criticism Abound as Commission Takes Aim at...
The European Union (EU) is embroiled in a heated debate over Ursula von der Leyen's proposed €2 trillion budget for the years 2028 to 2034, a significant increase from the current plan. The budget, which aims to address Europe's ambitions and challenges, has sparked concerns among member states about the financial burden, allocation, and management of funds.
At the heart of the controversy is a proposal for a corporate tax on large companies, a move intended to diversify the EU's revenue streams and reduce reliance on member state contributions. Companies with an annual turnover of over €100 million would be subject to a graduated tax, with those earning up to €499 million paying €250,000 annually, those with a turnover of €100 million to €249 million paying €100,000, and those with a turnover of €750 million and above paying €750,000.
The German Federation for Environment and Nature Conservation (BUND) has criticised the Commission's proposal, describing it as "zero for nature conservation." Meanwhile, the German Chamber of Industry and Commerce (DIHK) and the German Association of the Automotive Industry (VDA) have expressed concerns that such a tax could deter investment or hinder economic growth. Hildegard Müller, President of the VDA, states that a tax independent of profits would be particularly harmful to growth and would weaken the competitiveness of companies in the EU.
The budget also includes new EU-wide taxes on electric waste, tobacco, and corporate profits, designed to give the EU more financial autonomy and ensure compliance with the rule of law among member states. However, these taxes might face resistance from member states wary of losing sovereignty over tax policies or concerned about the economic impact on businesses.
Moreover, the EU plans to make funding conditional on adherence to the rule of law, a contentious issue, especially with countries like Hungary, where there have been concerns about democratic backsliding. This conditionality could lead to political tensions and disputes between Brussels and some member states.
The WWF has criticised the proposed cuts to climate and environmental protection budgets, stating that Europeans would be ill-prepared for worsening crises in climate change and biodiversity. The BUND, too, lacks concrete commitments for financing, for example for the implementation of the EU Renaturation Act to restore nature, according to its chairman Olaf Bandt.
The German government has announced that it will not accept the Commission's proposal due to the significant increase in the EU budget at a time when member states are making efforts to stabilise their budgets. The proposal now moves to discussions among EU countries and the European Parliament, with long and complex negotiations expected.
In summary, the proposed EU budget of €2 trillion for the years 2028 to 2034, with its new taxes and rule of law conditionality, is set to spark a lengthy and contentious negotiation process. The controversy centres around the scale and funding mechanisms of the budget, the potential enforcement of rule of law conditions, and the political and economic implications of these measures.
- The debate over Ursula von der Leyen's proposed €2 trillion EU budget for the years 2028 to 2034 involves policies such as a corporate tax on large companies, which aims to diversify the EU's revenue streams but has drawn criticism from various Business and Industry groups.
- The budget also includes new taxes on electric waste, tobacco, and corporate profits, designed to give the EU more financial autonomy, but these might face resistance from member states concerned about Sovereignty and Economic impact on their businesses.
- Additionally, the EU plan to make funding conditional on adherence to the rule of law, which could lead to political tensions and disputes with countries like Hungary, is a contentious issue in general News circles.
