European Union member states are being asked to define a realistic revenue target for new bloc-wide taxes and to specify the adjustments they want, as Ireland's EU Council presidency prepares a fresh compromise for the next long-term budget. The sensitive question of creating new EU own resources was on the agenda at a meeting of European ambassadors on Tuesday, with Dublin testing the ground for a revised package.
According to a note circulated ahead of the talks, a clear majority of member states are ready to engage on a mix of new own resources and reforms to the existing system. But the document warns that if every objection were taken into account, the package would end up "minuscule." To build something substantial, it says, "compromises will need to be made by all."
The push comes as EU leaders prepare for the next Multiannual Financial Framework (MFF), the bloc's seven-year spending plan. At an informal ministerial meeting last week, senior officials insisted that own resources are a vital part of the next budget, pushing back against the scepticism of the most fiscally conservative capitals. The Irish presidency has been holding bilateral talks with all member states, while European Council President António Costa tours national capitals for his annual consultations.
Which taxes have traction?
Among the European Commission's original proposals, the Carbon Border Adjustment Mechanism (CBAM) appears to enjoy the broadest support. The mechanism applies a carbon price to imported goods such as steel and cement, ensuring foreign producers face a similar cost to their EU counterparts. Many delegations are open to increasing the levy's call rate, according to the Irish note.
The proposed tax on electronic waste also receives "broad support," with criticism largely technical rather than political, relating to statistical and methodological issues. By contrast, the Corporate Resource for Europe—a flat annual payment from large companies above a turnover threshold—is widely criticised as running counter to the EU's current pro-business agenda.
Several member states are also wary of the Tobacco Excise Duty Own Resource, fearing a rise in black-market sales and a drop in product quality. On the Emissions Trading System (ETS), the presidency is more optimistic, noting that most countries are open to it, though a few remain opposed.
Proposals from the European Parliament, including taxes on online gambling, digital services and cryptocurrency, met with scepticism. The Commission estimates these could generate up to €11 billion a year, but most national governments doubt they could be implemented by 2028. A small group backed the digital services levy as worth considering, but several capitals raised "geopolitical concerns," a clear reference to the risk of trade retaliation from Washington.
Some governments have floated their own ideas, such as a sugar tax, 5G licence fees, or a financial transactions tax. The note also highlights that many member states link their willingness to support individual own resources to their overall satisfaction with the MFF, suggesting that balance may be found across both spending and revenue sides.
There is "widespread support" for cutting the retention rate on traditional own resources—the share member states keep to cover collection costs—from 25% to 10%, with only a handful of countries opposed. On joint debt, the Irish presidency reports "openness" to adjusting the repayment schedule for Next Generation EU, the post-pandemic stimulus instrument that the bloc would otherwise begin repaying in 2028. However, some member states remain "critical or strongly opposed," and there is some support for new borrowing tied to specific instruments.
The own resources issue will be discussed at the next General Affairs Council on 22 September and at the European Council summit on 15-16 October. The Irish presidency is expected to produce a new compromise text by early October.
