New EU Taxes Won’t Solve Any Problems and Will Only Create New Ones

In early 2018, the European Commission is set to open EU budget negotiations with its own proposal for how the budget should look after 2020. During coalition negotiations in Germany, the CDU, CSU and SPD agreed on plans to increase Germany’s payments to the EU. EU Commissioner for Budget and Human Resources, Günther Oettinger, has already announced that the EU’s budget proposal will also include ideas for new sources of revenue. The EU budget and potential savings will be the focus of today’s Lunch Debate, which is part of a regular discussion series hosted in Brussels by the Centre for European Economic Research (ZEW), Mannheim. On the subject of EU budget reforms, Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW, offers his view.

“Representing one per cent of Europe’s total economic output, the EU budget is currently relatively small in size. This does not mean, however, that we should be trying to increase it by any means necessary. Indeed, there are many areas where the EU could be saving money. For example, the large payments that are often still being made to wealthy farmers are an anachronism that can no longer be justified. As long as the EU has no plans to cut back on these agriculture subsidies, no country should be making premature plans to send them more money. New tax revenues would also be of little help to the Brussels budget. Sending more money to Brussels and creating new revenue sources will simply alleviate the pressure on the EU to reform itself and runs counter to Europe’s goal of focussing on policy areas that provide real added value.”

The potential savings in the EU budget discussed at the ZEW Lunch Debate in Brussels today are based on the findings of the study “How Europe can deliver” produced by ZEW on behalf of the Bertelsmann Stiftung. The ZEW Lunch Debates are a discussion series held around midday and have become a successful fixture in Brussels.

For more information please contact

Prof. Dr. Friedrich Heinemann, Phone +49(0)621/1235-149, E-mail friedrich.heinemann@zew.de