EU leaders clash over bloc’s next 7-year budget, seek new revenue from crypto and carbon taxes
The European Commission's nearly €2 trillion spending plan has opened a fierce debate over who pays, with crypto transaction levies and capital gains taxes on digital assets emerging as potential funding sources.
European Union leaders have asked Ireland to identify new revenue sources for the bloc’s next long term budget as disagreements deepen between countries that pay more into the system and those that receive more.
Ireland takes over the rotating EU presidency in July and has been tasked with presenting possible funding options by October.
The European Commission has proposed a budget of about €2 trillion for the period from 2028 to 2034. The Cypriot presidency proposed reducing that amount by 2% last week, but the compromise failed to satisfy either countries demanding deeper cuts or those seeking greater spending.
EU budgets require unanimous support from all 27 member states, often creating a difficult negotiation between wealthier net contributors and poorer countries that depend more heavily on EU funding.
Leaders are now looking for new sources of revenue that would reduce pressure on national budgets while preserving spending on agriculture, regional development, defence and technological competitiveness.
Possible options include redirecting part of the revenue from carbon permit sales and taxes on imports produced under weaker climate standards.
Other proposals include levies tied to electronic waste, tobacco, digital services, extreme wealth and crypto asset capital gains, along with annual contributions from large companies operating in the bloc.
Ireland will be responsible for identifying which proposals, or combination of proposals, could secure unanimous support by the next EU summit in October.
European Council President Antonio Costa said the additional revenue would be needed to reach an agreement in December.
A deal is legally required before the end of 2027, but EU officials are pushing to complete negotiations this year before elections across several member states complicate the process.
The negotiations are also divided over spending priorities. Some governments want to protect funding for farmers and poorer regions, while others want more money directed toward defence and competition with the United States and China.
The European Parliament has separately called for a larger budget, setting up another potential dispute with governments seeking to limit national contributions.