Cork: When Ireland assumes the rotating presidency of the Council of the European Union on 1 July, it inherits one of the most thankless files in the bloc, the question of who actually pays for the next long-term budget. The European Commission has proposed a Multiannual Financial Framework of close to two trillion euros for the period from 2028 to 2034, equivalent to roughly 1.26 percent of the bloc’s gross national income. The headline figure has dominated the debate so far, but the quieter and arguably harder argument concerns revenue, where the money comes from rather than where it goes.
At present the EU budget is financed largely by direct contributions from national treasuries, topped up by customs duties and a share of value-added tax receipts. That arrangement has long irritated finance ministers, who tend to treat every transfer to Brussels as a domestic political cost to be minimised. The Commission’s answer is a package of five new own resources designed to raise an estimated 58.5 billion euros a year and loosen the budget’s dependence on national cheques.
The most contentious element is a charge known as CORE, a tapered levy on companies with annual net turnover above 100 million euros. Brussels presents it as a modest contribution from the bloc’s largest and most profitable firms, the kind of corporate base that operates across borders yet pays into national systems unevenly. Business federations see it differently, warning that a turnover-based charge falls on revenue rather than profit and risks landing hardest on low-margin manufacturers and traders already squeezed by energy costs and weak demand.
The remaining proposals lean on environmental and behavioural taxes. The Commission wants to book 30 percent of revenues from the Emissions Trading System and 75 percent of the income generated by the Carbon Border Adjustment Mechanism, the bloc’s levy on carbon-intensive imports. A separate strand, provisionally labelled TEDOR, would channel a share of national excise duties on tobacco products into the common pot, while a final instrument would tie a member state’s contribution to the volume of electronic waste it fails to collect and recycle.
The political obstacle is formidable. Decisions on own resources require unanimity in the Council, the consent of the European Parliament and, in several cases, ratification by national parliaments. Any one capital can stall the package, and the early signals are not encouraging. Several governments have made clear they would rather trim the overall size of the budget, with talk of a reduction of around two percent against the Commission’s figure, than hand Brussels independent sources of income that escape national control.
Supporters argue that the status quo is unsustainable. Repaying the joint borrowing taken on during the pandemic recovery will consume a growing slice of the budget from 2028, and without fresh revenue that bill crowds out spending on defence, competitiveness and cohesion. Critics counter that new EU-level taxes blur democratic accountability, since voters cannot easily punish Brussels at the ballot box.
Ireland’s presidency will not resolve the question, but it must keep the negotiation moving toward a target deadline of late 2026. Whether the corporate levy survives in recognisable form will say a great deal about how much fiscal autonomy member states are prepared to surrender.
