European Council President Antonio Costa has proposed narrowing a controversial corporate levy and adding new revenue sources in an effort to break the deadlock over the European Union's next long-term budget. The proposals, presented informally by his chief of staff, Pedro Lourtie, aim to make a set of EU-level taxes acceptable to reluctant member states before budget talks reach a critical stage.
The centrepiece of the revision concerns the so-called CORE levy. In its original form, the plan would have imposed a fixed sum on companies with a turnover above €100 million. Under the revised version, the levy would apply only to firms with turnover above €750 million, and a fixed sum would be replaced by a rate of 0.05 per cent. The change is designed to limit the burden on mid-sized companies, which have been among the most vocal critics of the measure.
Opposition remains strong. A group of member states led by Germany has argued that CORE would weaken the competitiveness of European firms and place an unfair load on businesses. Two diplomats familiar with the discussions have expressed doubt that the revision will be enough to win them over, suggesting that the compromise may not resolve the core objections.
The wider tax package was originally expected to raise around €65 billion a year for the EU budget. Alongside CORE, Costa's team has floated several additional measures. These include a charge of 25 cents per kilogram on plastic packaging and electronic waste that is not collected for recycling, and a proposal to raise the share of carbon border adjustment revenue retained by the EU budget from 75 per cent to 100 per cent. Possible levies on cryptocurrency firms and on revenues from national spectrum auctions have also been discussed.
Further options include phasing in a levy on tobacco products and a charge on polluting companies linked to the emissions trading system. France has pushed for new levies of this kind, arguing that they would reduce the direct financial contributions that member states make to the bloc, which are a source of political friction in national capitals.
Timing is a significant pressure point. Poland, France and Italy all hold elections next year, and governments are wary of approving measures that could be portrayed as new taxes on voters. Talks are scheduled to run through next Monday, with the aim of reaching an agreement by the end of 2026. Costa is due to present a new negotiating text for the budget on 21 November, with a special summit scheduled for the following week.
If budget cuts are needed to bridge the gap, regional cohesion funds could be affected, a prospect that would worry the so-called Friends of Cohesion, a group of southern and eastern member states that rely heavily on this spending. Cuts to farm subsidies, by contrast, are considered unlikely. The outcome of the coming weeks will determine whether the EU can secure the revenue it needs before the next budgetary period begins.