Economy

EU proposal: € 750 billion to correct the corona crisis, including € 500 billion Inland

According to the day-to-day management of the EU, € 500 billion should consist of gifts and € 250 billion of loans, sources in Brussels report. For the Netherlands, the proposal is hard to swallow: the cabinet wants to help with loans (how much is still unknown), but does not want to know anything about gifts. But the Netherlands is quite isolated. Many countries, including powerful Germany, argue that loans make no sense alone, as they only further drive the high national debt of a country like Italy, which increases the risk of tipping over. The political and economic damage would then be enormous.

The 500 billion in gifts is in line with the Franco-German proposal from just over a week ago. On Wednesday afternoon at half past one, Commission President Ursula von der Leyen will present the unprecedented billions in the European Parliament. As far as she is concerned, large companies are helping to pay for the recovery, because Brussels wants to start taxing itself, it already leaked.

Day-to-day management of the EU hopes to limit an increase in national contributions by levying certain taxes itself. But so-called own resources for the EU are always controversial for a country like the Netherlands, because a member state has less control over them.

Levy companies

Reportedly, there should be a 0.1 percent tax on sales from companies that convert more than 750 million euros worldwide. With that, 10 billion euros would flow into the treasury. The previously presented Green Deal also dealt with a tax on plastic and a CO2 tax on goods from outside the Union that have been produced “dirty”. They will be announced again. A Brussels grip on the revenues from emissions trading between companies is also being prepared. Shipping and the aviation sector are specifically mentioned.

Resistance

These are all proposals that can count on the necessary resistance in the capitals. For example, the introduction of a digital tax to allow (especially American) internet giants to pay more tax on their European profits has been stuck in recent years in an unruly reality, with member states such as Ireland keeping their hands on large companies. But the alternative of a much higher contribution is also not very attractive to national politicians.

The resistance to the Brussels plans comes mainly from a group of four countries: the Netherlands, Austria, Sweden and Denmark. These countries do not want to know about gifts, but want to help countries in need with loans.

Although new taxes are emerging as far as the Commission is concerned, a (slightly) higher contribution for Member States is inevitable. However, the new own resources should in any case be able to yield interest payments and finance the repayment of the money raised on the capital market.

The European multi-annual budget is also shifting: less money for old priorities such as agriculture and regional development and more for sectors in need. This will encounter resistance in Eastern European countries, as they see potential money disappearing towards Southern Europe in this way.

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