European Council President António Costa is searching for new ways to fund the EU’s next long-term budget, as member states disagree over who should foot the bill.
The European Union needs money to fund its future priorities, but national governments are reluctant to put more money into the common budget. With last week’s summit ending without an agreement, European Council President António Costa is now looking at ways to raise money directly at EU level.
The proposals include taxes on large companies, digital services, tobacco, carbon emissions and online gambling.
The key question is who should pay for Europe’s future: national governments and ordinary taxpayers, or large corporations and industries that generate significant profits or pollution?
Costa argues that new EU-wide revenue sources are necessary to keep national contributions at a manageable level while still allowing the bloc to invest in shared priorities.
“To reach an agreement, we need to keep national contributions at a reasonable level, while preserving our ambition and the means to deliver on our common priorities,” Costa said after last week’s summit. He added that finding new sources of EU revenue was essential.
Finding money without putting more pressure on national budgets
Ireland has proposed a compromise designed to bring countries with different priorities closer together. Irish Minister of State for European Affairs Thomas Byrne said any new EU revenue source should meet three conditions: all member states must agree to it, it must raise a substantial amount of money, and it must be ready by 1 January 2028.
But Ireland’s proposal has drawn criticism from several sides, including the European Parliament.
Parliament has called for new taxes on digital services, online gambling and crypto assets, which it estimates could generate up to €25 billion a year.
MEP Danuše Nerudová criticised the Irish compromise, saying it failed to include Parliament’s proposals despite receiving positive feedback from several member states.
Should big companies contribute more?
The Corporate Resource for Europe (CORE) proposal would require large companies to contribute to the EU budget. Some member states oppose the idea, arguing that additional costs for businesses could undermine Europe’s competitiveness.
The European Commission says the measure would apply only to companies with annual net turnover above €100 million. It also argues that the contribution would generally be smaller than the bonuses paid to senior executives at these companies.
The Commission is now considering whether this measure could be combined with a tax on digital services, an idea that could create further tensions with the United States, since many of the world’s largest technology companies are American.
One possible compromise would be to design the tax so that it is not aimed at one particular industry. Instead, a high financial threshold could mean that the biggest foreign companies, including American and Asian firms, would bear much of the cost.
Such an approach could help the EU raise money while addressing concerns about the impact on European businesses.
Making polluters contribute to the budget
Another proposal would send 30% of the money raised through the EU’s Emissions Trading System (ETS) to the EU budget. The ETS makes major polluters pay for their carbon emissions. Redirecting some of that revenue to Brussels could provide the EU with another source of funding.
However, certain countries, such as Poland opposed this idea a disagreement highlighting a wider challenge for the EU: even when money comes from a system designed to make polluters pay, governments can disagree over whether that revenue should remain at national level or help fund common European priorities.
Some proposals face less opposition
One option would use money from the Carbon Border Adjustment Mechanism (CBAM). This system puts a carbon price on certain imported goods, including steel and cement, so that foreign producers face carbon-related costs comparable to those paid by companies producing within the EU.
Supporters argue that this can help prevent European businesses from being undercut by imports produced under less demanding climate rules. Revenue from the system could also help finance the EU budget.
Another proposal would base a contribution on the amount of electronic waste generated by each member state. This idea has attracted relatively little opposition, with most remaining questions relating to how it would work in practice.
The search for a compromise continues
EU leaders remain divided over how to fund the bloc’s next long-term budget, reflecting tensions between national interests and shared European priorities.
While EU-wide taxes on large companies and carbon-intensive industries could reduce reliance on national contributions, member states disagree over which revenue sources to support and how the financial burden should be distributed.
The outcome will depend on whether governments can reach a compromise between protecting national budgets and securing funding for common priorities.
Beyond the immediate negotiations, the debate also highlights wider challenges for the EU: how to share financial responsibility between member states and what role large businesses should play in financing Europe’s future.
(Sources: European Parliament, European Commission, Euronews)
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