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Vote: Guidelines for the 2014 budget - Section III, Paragraph 15, March 2013.
To finance its policies the European Union (EU) needs revenue. But unlike national governments, the EU is not allowed to levy its own taxes - it is dependent entirely on financial contributions from Member States. These make up more than 75% of the EU’s budget.
Member States do not all pay the same amount: richer countries contribute more than poorer ones, and some countries (such as the UK) benefit from special discounts agreed in the past. EU governments regularly clash with one another over who contributes what to the budget, and what the money should be spent on.
Critics say the EU should spend less money, but others point out that the EU’s budget is still tiny compared to the national budgets of Member States (in 2011 the EU spent 140 billion euros; the 27 Member States together spent almost 50 times more).
Most MEPs believe the EU’s budget system is unnecessarily complicated. In a non-binding resolution they called for the EU to have its own sources of income, for example in the form of a European value-added tax (VAT).
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The current EU budget system was devised more than half a century ago. It needs to be modernised urgently. If the EU had tax-raising powers it could do more to tackle major problems, such as climate change and youth unemployment. Giving the EU its own revenue-raising powers would decrease the financial burden on Member State governments. |
The current system works: the budget will always be balanced, because the Member States contribute exactly as much as the EU will spend. By giving the EU its own tax revenue, national governments would lose some of their influence, and more power would flow from national capitals to Brussels. The EU lacks the political and democratic legitimacy to levy taxes. |
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