EU Budget Falls Short of Expectations
**German Finance Minister Criticizes EU Budget Proposal at G20 Meeting**
At a recent gathering of finance ministers from the G20 economies in Durban, South Africa, German Finance Minister Lars Klingbeil expressed his concerns about the European Commission's proposed long-term EU budget. The proposed budget, which aims to address systemic challenges and make Europe more independent, has been met with opposition from Germany.
The Commission's budget proposal includes several new revenue sources, one of which is a levy on large companies with an annual turnover of more than 100 million euros. Klingbeil, a member of the SPD political party in Germany, criticized this proposal, stating that it sends the wrong signal. He also raised concerns about the redirection of 15 percent of national tobacco tax revenues to Brussels, as part of the EU budget plan.
The German government has long been resistant to EU-level tax increases, especially those perceived to impinge on national sovereignty over fiscal policy. Klingbeil's criticism extends to the proposal to redirect tobacco tax revenues to the EU, which he believes may hinder Germany's efforts to strengthen its economy, secure jobs, and attract investments.
The proposed EU budget also includes a levy on large companies, a measure that the German government cannot agree to. Klingbeil did not specify what aspects of the corporate tax proposal he finds problematic, but his comments suggest a broader concern about the overall size and impact of the budget increase on Germany's national budget.
The German government's official position, communicated by spokesperson Stefan Kornelius, is that a comprehensive increase in the EU budget is unacceptable at a time when all member states are making considerable efforts to consolidate their national budgets. This reflects a broader German reluctance to shoulder additional EU financial obligations amid domestic budgetary pressures.
Despite these objections, the European Commission's budget proposal is designed to be more strategic, flexible, and transparent, and to invest in Europe’s capacity to respond to crises and enhance independence. If the Commission later proposes concrete EU-level corporate tax reforms, German resistance on sovereignty grounds would be likely, but such details are not yet part of the public debate.
With the EU Commission President Ursula von der Leyen proposing a significantly increased EU budget for 2028–2034, the debate on the future of the EU's financial structure is set to continue. The German government's opposition to the proposal, led by Finance Minister Lars Klingbeil, will be a key factor in shaping the outcome of these discussions.
The German Finance Minister, Lars Klingbeil, criticized a proposal in the European Commission's long-term EU budget, specifically a levy on large businesses and the redirection of tobacco tax revenues to Brussels, concerningly indicating that these measures could hinder Germany's economy, job security, and investment attractions. The German government opposes the comprehensive increase in the EU budget, as stated by spokesperson Stefan Kornelius, due to domestic budgetary pressures and a reluctance to take on additional EU financial obligations.
