The EU’s next budget faces deep cuts, and governments cannot agree on how to fund it. With global talks on a digital tax stalled, EU Budget Commissioner Piotr Serafin told lawmakers he backs a European approach. The cuts, he warned, would weaken Europe’s crisis response.
“We see no progress in the global negotiations on the question of digital levy. And then the second best is European,” Mr Serafin told the European Parliament’s budgets committee on 5 November. His remarks came as MEPs pressed the European Commission to advance proposals targeting digital services, online gambling, and crypto assets to help finance the 2028–2034 long-term budget.
Digital levy gains support
The proposals would add to the EU’s ‘own resources’, the revenues used to finance its budget alongside national contributions. Parliament has already put forward additional options, while the Commission has proposed five new revenue sources. Mr Serafin said all five remained under discussion, but governments had made little progress towards agreement. “If everyone blocks the one own resource they don’t like, we may end up with no own resources at all,” he warned.
Danuše Nerudová (EPP/CZE), one of Parliament’s negotiators on budget revenues, argued that the US midterm results should encourage work on a digital levy. “If big tech CEOs have billions to pour into the US elections, surely they can afford to pay their fair share in Europe,” she said. Mr Serafin expressed support for a European solution while saying the Commission awaited direction from European Council President António Costa, who is working to build an agreement among governments.
The potential proceeds remain disputed. MEPs questioned why Parliament’s estimates for its proposals were substantially higher than the Commission’s. Mr Serafin said the figures depended on which activities would be taxed. Parliament’s digital levy calculations included e-commerce, while the Commission’s excluded it. “This is a question of the political choice and the political decision,” he said.
We see no progress in the global negotiations on the question of digital levy. And then the second best is European.
— Piotr Serafin, EU Budget Commissioner
Mr Serafin also raised doubts about whether the additional levies could operate from January 2028. Countries might first need to align their tax rules on digital services, online gambling, and crypto assets. He offered the Commission’s help in adjusting the revenue package, but announced no new levy or implementation timetable.
Smaller umbrella for crises
The immediate dispute concerns the October negotiating proposal by the Irish presidency of the Council of the EU. It would cut €141bn, or 8 per cent, from the Commission’s proposed seven-year budget. Excluding pandemic recovery debt repayments, spending would amount to 1.02 per cent of EU gross national income. Parliament’s negotiators had already rejected the proposed reductions before Thursday’s meeting.
Mr Serafin warned that the proposal would also sharply reduce the money available to respond to unexpected events. “We proposed a solid shelter for the storm,” he said, describing the Council text as leaving “a small umbrella with holes in it”. He said the proposed flexibility for unforeseen needs amounted to only half that available under the current budget before its midterm revision. Natural disasters and shocks to agricultural markets could consequently leave the EU struggling to assist those affected. He also acknowledged that the Commission had not completed a detailed assessment of the proposed cuts.
Siegfried Mureșan (EPP/ROU), a lead parliamentary budget negotiator, warned that the proposal could not secure Parliament’s consent. Mr Serafin nevertheless resisted calls to prepare immediately for negotiations to fail. “I think this is still time to work on the agreement,” he said. His objective remains to settle the budget in time for EU programmes to start in 2028, while finding revenue sources that can support them.
