The future of the EU budget – own resources

Péter Benő BANAIdeputy head of department

Ministry of Finance, Hungary

Budapest, 30 May 2008.

Member States?

Payments at national level (e.g. the GNI-based contribution)

Citizens?

Payments at individual level (e.g. an EU-tax)

What are the basic economic and social entities, units of the Union?

The budget should „match” with the level of integration

No EU tax

The budget might be a tool to deepen integration

Introduction of an EU tax

What is the connection between the „depth of integration” and the budget?

• Sufficiency, Stability• Cost-effectiveness• Fairness• Financial autonomy• Visibility• …

There is not an own resource which fulfills all criteria.

There is a trade-off between different criteria.Weighting criteria determines the own resource system.

Which criteria shall be fulfilled by an optimal own resource?

• Visibility• Financial autonomy

National authorities should collect the tax! „Dependence” cannot be decreased.

Consumption structures are different in the Member States!

Fairness (?) Cost effectiveness

Stability

Two possible advantages of an EU tax compared to the GNI resource

Is it a good tool to present the Union?Just in principle!

According to the principle of universality budget revenue is used without distinction to finance all expenditure.

No „real” agreement on the expenditure sideNet positions dominating the agenda

Maintenance / introduction of a correction mechanism

No „real” agreement on the income side

No one is satisfied with the financial perspective

Do we need any correction systems?

The attitude of Member States towards debated issues of the or. system (1)

+ - ?

GNI-based contribution ? + + + + + + + + + + + - + - + + + should be

strengthened

good source of income,

but strengthens

the juste retour logic

needs further examination/neutral/not mentioned

VAT-based contribution - - + - - - - - - + ? - ? - - - - - should be

maintainedshould be abolished

needs further examination/neutral/not mentioned

Correction mechanisms - - - - - - + - - - ? - - + - - - -

should be maintained until present

resource system is kept

should be abolished

needs further examination/neutral/not mentioned

Implementa-tion of an EU

tax? - - ? + ? - ? + + ? - + - + ? ? - theoretically

favourablenot

favourable

needs further examination/neutral/not mentioned

ExplanationDKBUAT SKROPTPLNLLU

Country / issue

LTLVITHUELGEFRFIES

Note: the nine countries not included in the table have not yet submitted their contribution Based on the contribution of Member States’ governments to the public consultation process on the EU budget

The attitude of Member States towards debated issues of the or. system (2)

General consensus emerged on the following:

• Most countries emphasized the necessity to reform the current OR system.

• The reform should be closely linked to the expenditure side.

• The GNI-based resource satisfies the requirements of stability, flexibility, and equality.

Based on the contribution of Member States’ governments to the public consultation process on the EU budget

Thank you for your attention!

Péter Benő BANAIMinistry of Finance, HungaryTel: +36-1-327-2761Fax: +36-1-327-5949E-mail: peter.banai@pm.gov.hu