Macron and the Financing of the EU Budget

He not only pointed out what objectives a European budget must pursue: “reduce our differences and develop our common goods: security, protection with respect to migration, digital transition, ecological transition, a genuine development and partnership policy and, above all, our currency”, but he also stressed that the production of these common goods must be financed. He argued that “European taxes in the digital or environmental field could be a genuine European resource to finance common expenditure”. In addition to these forms of taxation, he proposed reflecting on the possibility of “partly allocating at least one tax to this budget, such as corporate tax once it has beenharmonised”.

Regarding taxes in the digital sector, Macron strongly emphasised that, in an integrated world, competition should be fair. For this reason “it is unacceptable to have European actors who must pay taxes and international actors who do not, digital actors who pay no taxes and who compete with traditional economy actors who do pay taxes”. In fact, regarding the web tax, something is already happening. At the informal ECOFIN meeting in Tallinn, the Ministers of the Economy from Germany, France, Italy and Spain proposed the introduction of an equalisation tax on turnover generated from digital companies in Europe, and, along with another six countries (Austria, Bulgaria, Greece, Portugal, Romania and Slovenia), signed a political declarationemphasising the need to proceed rapidly and asking the Commission to submit a legislative proposal. The Commission then presented an initial Communication (A Fair and Efficient Tax System in theEuropean Union for the Digital Single Market), in which it examined the various possible options for introducing this type oftax.

Macron also expressed his hopes that partnership with Africa will become a central element for the rebuilding of the European project and, in order to find the necessary resources, he proposed “relaunching the project for a European financial transaction tax with a new basis”. Macron noted that the UK has already introduced a similar measure – the stamp duty – and that “if we collectively decide to adopt the British tax, no one can say that it will create competitive disadvantages for the European Union.” A similar tax, at a moderate rate but a broad taxable base, could thus be a first step to introduce a financial transaction tax intended to provide significant resources to the European budget.

However, the most important element in Macron’s speech regarding resources to finance the European budget is certainly the carbon tax. The French President stressed above all that “a key to regaining our European sovereignty is being able to address the first of the major global transformations, the ecological transition. This transformation is revolutionising the way we produce, distribute and behave. Europe must be a pioneer in an effective and equitable ecological transition. To this end, we need to transform our transport, our housing, our industries. However, in the coming years, if we do not have a significant price per tonne of carbon so as to allow a fundamental reorientation of our economies, then our efforts will be futile”.

On this basis, Macron advanced concrete proposals on three levels. The first concerns the price to be charged on CO2 emissions which, to be effective, must not be less than 25-30 Euros per tonne. It is the minimum price to promote the transformation of the European economy, support the sectors in difficulty in the ecological transition and help the regions that will suffer from the transformation of production structures. A carbon tax fixing a minimum price equal to 25-30 Euros is already able to yield revenues ranging from 55 to 66 billion Euros in EU27, with an impact on fuel price of about 0.11 Euros per liter.