Info
The European Commission proposed its recommendations for the EU budget (multi-year financial framework) for the years 2014 to 2020. The budget should be 971.5 billion Euros for this seven-year period. This is an increase of 5% compared to the financial period from 2007 to 2013, in which 925.5 billion Euros is meant to be spent. The contributions from the EU member states should decrease, whereby the Commission will increase direct EU taxes. Current discussions include a VAT and a financial transactions tax.

In regards to Europe 2020
The multi-year financial framework is an inter-institutional agreement between the European Parliament, the Commission and the Council which usually spans seven years. It normally gives the EU expenditure pattern and the expenditure ceiling for each policy area. The current budget has to serve, as its biggest tasks for the 2007 to 2013, the areas of ‘sustainable growth,‘ (e.g. structural and cohesion funds as well as research and innovation) and ‘conservation and management of natural resources‘ (agricultural policy).

With a financial transactions tax, banks would be involved as they were contributory to the crisis, by contributing to the cost and strengthening of EU funds. With a tax of 1%, there would be an additional revenue of 30 billion Euros per year. In the financial transaction tax, the amount collected would be 50 billion Euros. The contributions of EU member states could decline with the contributions of both taxes. The EU could excape from the tug of national governments by imposing its own taxes.

An EU tax increases the tax burden on citizens and businesses. It would strengthen the EU’s lack of acceptance. With a financial transactions tax which is not applied globally, there would be the threat of financial market transactions migrating away from Europe. Even if a financial transactions tax is introduced, this will flow into the national budgets. The law would raise its own taxes, which would be a countervention of the soverign rights of Members States.