Over the coming months, European governments will intensify negotiations on the EU's next long-term budget, covering 2028-2034. At the heart of the discussion is the question of how to finance the bloc's ambitions—from artificial intelligence and defence to agriculture and fisheries—without relying solely on national contributions.
The debate over "own resources" is not new. During the last budget round, the 27 member states failed to agree on any new EU-level revenue streams, and the budget was ultimately funded by national contributions equivalent to 1.13 percent of each country's gross national income. But with the EU aiming to make large, coordinated investments in strategic sectors, many officials argue that relying on fragmented national budgets is no longer sufficient.
European governments are therefore exploring fresh sources of income. Yet finding consensus on new taxes is proving difficult, as none of the proposals currently on the table is universally popular. Diplomats speaking to Euronews on condition of anonymity stressed the central dilemma: how can governments convince their publics to accept a new tax, especially when such measures are often perceived as being imposed from Brussels?
Taxes introduced at EU level can easily become a rallying point in election campaigns, and may even influence the fate of governments. Sweden, for instance, has taken a hard line against any form of own resource, arguing that the bloc's wealthiest members would shoulder a disproportionate burden. Meanwhile, any new EU-wide tax would face significant technical hurdles, including the need to harmonise national tax laws and to implement the measures quickly enough to contribute to the budget from 2028.
Proposals on the table
Euronews has assessed the main options, based on conversations with EU officials and diplomats as well as internal documents. Here is a breakdown of the proposals and their prospects.
Carbon Border Adjustment Mechanism (CBAM)
Designed as a complement to the Emissions Trading System (ETS), CBAM applies an equivalent carbon price to imports of certain carbon-intensive goods—currently iron and steel, aluminium, cement, fertilisers, electricity and hydrogen. The aim is to prevent producers from relocating emissions abroad and to ensure a level playing field for European industry.
Most member states support CBAM in principle, with Finland, Austria, Portugal and Poland among its most vocal backers, and France also in favour. However, CBAM does not create a new tax; it simply redirects revenues from an existing mechanism to Brussels. While relatively uncontroversial, the amounts involved are modest—estimated at €1.4 billion annually.
Parcel handling fee
The European Commission has proposed a Union handling fee on low-value e-commerce parcels imported from outside the EU, mainly targeting Chinese platforms such as Shein and Temu. The rationale is to cover the growing costs incurred by customs authorities in processing billions of small consignments. Since July, the bloc has levied a temporary €3 flat tax on parcels under €150 in value, which will remain until the EU implements its broader tax reform, including the creation of a new EU Tax Authority based in Lille.
The proposal aligns with the EU's broader effort to rebalance economic relations with China, which has a widening trade surplus driven by a flood of cheap goods that often bypass European safety and counterfeit standards. However, there is still no clarity on how much revenue the fee would generate, and it could discourage consumers from ordering low-value parcels. Circumvention is another concern, as e-commerce platforms might respond by expanding their warehouses within the EU. The odds of adoption are rated four out of five stars, but no official revenue estimate exists. In 2025, close to 5.9 billion low-value parcels entered the EU, but the fee structure—€2 for direct-to-consumer parcels versus €0.50 for those shipped from EU warehouses—could shift the balance.
Online gambling tax
EU officials are focusing on two trends in the gambling sector: the shift from physical to online, and the rise of illicit activities. Data on the market is scarce, and an online gambling tax would take time to set up. The tax could help address issues such as underage gambling, betting on illicit subjects and organised crime, and it might increase revenues for countries where most gambling websites are located, including Malta.
However, Malta remains fiercely opposed to such a tax, which is a major obstacle given that the EU budget must be adopted unanimously. The question is what Valletta might be offered in return for concessions. There are also concerns about the disparity between the treatment of online and offline gambling. The odds are rated four out of five stars, with an estimated annual value of €1.9 billion.
Tobacco excise duty
The exact baseline for a tobacco tax is still a moving target, as EU countries are discussing a revision of the Tobacco Taxation Directive. The European Commission has proposed a new excise duty on tobacco products, which could generate significant revenue while also serving public health goals. However, the details are still being negotiated, and the timeline for implementation remains uncertain.
Beyond these specific proposals, the broader challenge is to find a package that all 27 member states can accept. As one diplomat put it, the goal is to leave everyone "equally unhappy"—a classic EU compromise. With critical elections looming in several member states next year, the pressure is on to reach an agreement that does not become a political liability.
The EU's ability to fund its priorities will also depend on broader economic and geopolitical factors. For instance, the bloc's digital future hinges on securing critical networks, which requires substantial investment. Similarly, the push for strategic autonomy in defence and technology will demand new financing mechanisms.
As negotiations proceed, the EU will need to balance fiscal prudence with ambition. The outcome will shape not only the bloc's budget but also its capacity to act on the world stage. For now, the search for fresh money continues, with no easy answers in sight.
