Portugal rejects cuts in the EU budget contributions

  • ECO News
  • 5 November 2019

The Prime Minister argues that the creation of the EU own resources is necessary. This could be achieved, for example, by taxing the technological giants.

Portugal argues that Member States should contribute 1.16% of Gross National Income to the European Union (EU) budget. A compromise proposal between the European Commission’s suggestion of 1% and the European Parliament’s suggestion of 1.3%.

At the end of the “Friends of Cohesion” meeting on Tuesday, António Costa, Portugal Prime Minister, reiterated that it was “unacceptable” that the new Community policies should be financed at the expense of the Cohesion Policy or the Common Agricultural Policy” (CAP) and stressed that the EU should seek its resources to support the budget, in statements broadcast on television.

Taxing the technological giants is the way, argues the Prime Minister. “All the countries find it very difficult to tax the big digital giants that generate revenue and that, most of the times, don’t pay taxes or pay very little”, he pointed out, arguing that it would be “easier to tax globally”.

This vision will also be shared at the Web Summit, where the Prime Minister will be present on Wednesday, a forum that “fully understands” this issue, he said. The regulation of technology companies has been a frequent theme on the stages of the summit, as for example in the speech of Margrethe Vestager, last year, as EU Commissioner for Competition, who reiterated that the focus in this area should be on the dominant companies.

The revenues from this taxation could contribute to the creation of the EU own resources, in order to alleviate the contribution requested from member states. Even so, Costa stressed that the countries that defend that the contribution should be only 1% “must take into account that a large part of the funds returns to the country itself”.

The Prime Minister, therefore, argued that the contribution of 1.16% of gross national income “is a reasonable proposal”, which is at an “intermediate” point between the proposals of the European Parliament and the Council.