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Valrie Hayer (FR, Renew Europe) and Jos Manuel Fernandes (PT, EPP) are members of the European Parliament and co-rapporteurs on the reimbursement of the EU recovery plan and own resources.

Can we still trust the European Commission when it comes to repaying European Union debt? The answer seems to be no. The only party who can count on the Commission is the United States.

The Commission is preparing to breach a legally binding agreement it sealed with MEPs and EU ambassadors just a few months ago. According to the deal, the debt was to be repaid with proceeds from new so-called own resources, including a Carbon Border Adjustment Mechanism (CBAM), additional charges using the Emissions Trading System (ETS) and a new EU digital tax. Today, all three of these new sources of revenue for the EU budget are in doubt.

This is a problem because there are only three options for repaying this debt: additional national contributions (meaning additional taxpayer money), cuts to European programs such as the Common Agricultural Policy (CAP) or Erasmus, or making the digital giants, big industrial polluters, foreign CO2 importers and aggressive stock market players pay.

The third solution is the right one and it is the one we negotiated last year. The other two are unfair. And it would be strikingly ironic if the future-oriented EU budget were to be cut by 10 percent in order to reimburse a program called Next Generation EU.

And yet, U.S. pressure regarding CBAM and the EU digital tax has demonstrated the political weakness of this Commission, culminating in last weeks decision to postpone sine die the EU digital levy at the request of U.S. Treasury Secretary Janet Yellen, due to global tax reform negotiations at the Organization for Economic Cooperation and Development (OECD).

The OECD/G20 pre-agreement, which aims to set a global minimum corporate tax rate of 15 percent, is a major achievement, and the Commission is right to support it. However, the decision to postpone the EU digital levy is outrageous. When it comes to its strategic interests, we expect a geopolitical Commission not to yield to pressure from third countries. We did not vote in the EU elections for a European executive that prioritizes American interests over ours.

Additionally, Washington is still imposing several conditions on the final agreement. What would happen if the U.S. Senate does not approve the deal? Whether a final deal is reached or not, the EU digital levy would be a complementary way to protect European interests and further ensure tax fairness beyond this agreement.

As if this were not enough, the Commission also plans to take another unilateral decision today, deferring the two other new own resources to an unspecified date as well.

This is unacceptable. We urge the College of Commissioners to preserve its credibility by thinking strategically and acting in the interests of the EU citizens it is meant to serve.

We ask the Commission to take two actions: First, it must honor its commitment to present the new own resources as soon as possible, including the complementary EU digital levy.

Second, it should take advantage of the OECD/G20 agreement and channel part of the revenues that will be generated by this global reform on international taxation (around 50 billion in the EU) toward the EU budget and the repayment of EU debt. Member countries and third countries should not be allowed to keep all the money for their national budgets and leave the EU to cope with its debt repayment without new own resources.

The recovery plan must prepare to build an EU that will benefit Europeans for decades, implementing the ecological and digital transition and providing new and improved job prospects. However, without new own resources, the Commission would be leaving a troubling legacy for future generations: Debts from the past.

This is not what we promised them, and this is not what the Commission promised us in December 2020. Therefore, we will do everything in our power to put an end to weak decisions by the Commission and make those who do not currently pay their fair share of taxes pay for the recovery whether it pleases foreign powers or not.

Original post:
Why is the European Commission doing Washingtons bidding on taxation? - POLITICO Europe