NICOSIA – Luxembourg Prime Minister Luc Frieden warned that plans to introduce new EU-wide revenue streams from taxes could “kill” Europe’s already sluggish economic growth.
Speaking to Euractiv ahead of an EU summit debate in Cyprus on Friday on the next Multiannual Financial Framework (MFF), Frieden said the bloc needs to strike a “balance” between funding new priorities, such as defence, whilst avoiding introducing growth-choking EU-wide taxes – otherwise known as ‘new own resources’.
“We need to make sure that we do not kill our growth, which is not very strong, but it’s there,” said Frieden, who hails from the same conservative European People’s Party as Ursula von der Leyen, the president of the European Commission.
“We don’t kill it by tax decisions or own resources that would kill the small growth that we have,” he added.
The European Commission’s efforts to introduce bloc-wide taxes on electronic items, tobacco, and large companies, for the post-2027 MFF have been widely criticised by EU capitals, many of whom are deeply sceptical of bolstering the €1.8 trillion common fund at a time of already stretched national budgets.
However, Roberta Metsola, European Parliament president, who attended Friday’s meeting, said she would urge leaders “to look with fresh eyes at own resources”, especially to service and pay back joint EU borrowing.
“We need new money to service old debt and that is something that we will ask the member states to look at,” the Maltese MEP added upon arriving in Nicosia ahead of the summit.
Resistance from national capitals to the proposed new taxes – which the EU executive also argues are necessary to help repay the bloc’s pandemic recovery fund – comes amid a push by António Costa, the European Council’s president, to conclude MFF negotiations before the end of 2026.
Frieden, however, said that the bloc still had “ample time” to conclude the MFF negotiations. “I’m convinced that by the end of the year or so, we will find common ground,” he said.
A former finance minister who assumed the premiership in 2023, Frieden also downplayed the likelihood of a far-right government in France derailing the MFF negotiations if it wins the French presidency, for which elections are expected in April 2027.
“Democracies are wonderful constructions,” he said. “And it’s like making a national budget. There are many different views at the beginning, but at the end of the day, we all know that we need a strong Europe.”
(cs, bw)
Source:
www.euractiv.com