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Plastics tax, carbon-trading cash to cover EU's Brexit gap, officials say

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Plastics tax, carbon-trading cash to cover EU's Brexit gap, officials say

By Jan Strupczewski

 

2020-02-14T144750Z_1_LYNXMPEG1D187_RTROPTP_4_BRITAIN-EU-LEADERS.JPG

European Council President Charles Michel gives a speech on the future of Europe in Brussels, Belgium January 31, 2020. REUTERS/Francois Lenoir

 

BRUSSELS (Reuters) - The chairman of the European Union's leaders proposed on Friday filling the hole left by Britain in the bloc's next long-term budget with revenue from a new tax on plastics and funds from trading carbon emissions.

 

Presenting a so-called 'negotiating box' which will form the basis of intense horse-trading between 27 EU national leaders at a summit on Feb. 20, Charles Michel proposed a budget for 2021-27 of 1.074% of the EU's gross national income, or 1.095 trillion euros ($1.2 trillion), of which a quarter is to go towards making the EU neutral in terms of CO2 emissions by 2050.

 

The departure of Britain from the bloc on Jan. 31 left a gap of more than 10 billion euros a year in the EU's funding, since it was a leading contributor to the budget after Germany.

 

But EU officials said revenue from the plastics tax and money from the augmented carbon trading scheme, which would also incorporate the transport sector, could generate 14 billion to 15 billion euros a year -- more than enough to fill the gap.

 

The tax on plastics would be 0.8 euro per kilogram of non-recycled plastic packaging waste. The carbon money would come from revenue generated by the EU Emissions Trading System (ETS) exceeding the average annual revenue per country generated by allowances auctioned over the period 2016-18.

 

The EU is also considering other taxes -- on the digital economy, flying, financial transactions and on products made with high CO2 emissions imported into the EU -- as further sources of revenue.

 

But the overall budget number is still too high for a group of the biggest net contributors led by Germany, the Netherlands, Austria, Sweden and Denmark. These richer countries don't want an amount higher than 1.0% and criticized the 1.07% figure when it was presented by the Finnish EU presidency last year.

 

"It’s difficult to see how this proposal will form a basis for compromise," one EU diplomat from the net contributor countries said of Michel's proposal.

 

"The ceiling is too high, the modernization too little. There remains a need for permanent corrections to ensure fair burden sharing," the diplomat said.

 

But senior EU officials involved in the preparation of the summit said 1.074% of GNI was the mid-point of positions of the 27 governments that Michel consulted over the last two weeks and offered the best starting point for a compromise.

 

To ease worries of net payers who get rebates on contributions, something net beneficiaries want scrapped, Michel proposed lump-sum corrections for Denmark, Germany, the Netherlands, Austria and Sweden.

 

Michel said EU funding should be conditional on governments respecting the rule of law - a point many of the net payers insisted on to keep pressure on Poland and Hungary that stand accused of violating democratic checks and balances.

 

His proposal keeps funds for equalizing living conditions across the 27 EU countries at 35% of the total, the same as the 2014-2020 budget.

 

But it cuts support for farmers, an item often criticized as preserving an outdated economic model, to 30% from 36%, and raises spending for the single market, innovation and the digital economy to 13.7% from 11.2% in the previous 7 years.

 

There is also an increase in spending on defense and on exerting the EU's influence in the world. EU administration funds will rise.

 

(Reporting by Jan Strupczewski; additional reporting by Gabriela Baczynska; editing by Edmund Blair and Toby Chopra)

 

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-- © Copyright Reuters 2020-02-15

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Do the 4 biggest emitters, such as Russia, China, India, ME, ad the USA care, or get

this tax?

Geezer

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It matters not, to me. No longer a citizen of a member state....they can tax and spend as they please now. I have no say in the matter, nor should I.

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Just like tax on fags, looks good, but nations become dependent on the tax and not so keen on reducing consumption. 

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I think it was widely known that the "£350 million/week" figure on the side of the red Brexit bus was a lie, but seeing the UK's actual contribution of "10 billion Euros" puts into perspective just how big the lie was. And how easily the EU can cover it. 

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Tax this...tax that...great solutions from the eey yuk.

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On 2/16/2020 at 12:36 AM, Laughing Gravy said:

That is original. Why don't you do a double whammy and mention a bus. We haven't heard this old chestnut for at least a few hours. :cheesy:

Typical responses  of someone who condones the words of those lying politicians...

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13 minutes ago, JonnyF said:

Looks like they're finally realizing what the UK brought to the table and what they're losing. Maybe they should have taken Cameron a bit more seriously what he asked for an improved deal. What was it Farage said? "You're not laughing now, are you".

 

Prepare for some serious in-fighting as the EU member states squabble about who pays for the shortfall. They will simultaneously try to punish the UK for leaving the undemocratic protectionist racket. Thank God we're out. Thank God.

10 billion over a period of 7 years is a mere pittance in the scheme of things. The megalomaniacal "Green plan" by vice-president Ting-tong Timmermans calls for an investment of a 1000 billion, thank you very much. The shortfall is (and has been already) easily covered. It's the extra money the EU wants for expansion that the squabble is about. President "Loony" Michel thinks he can fill the void between his dreams and the actual EU income  with taxes (plastic, data, etc.) that he has no mandate for to even come up with, let alone execute..

 

All WE in Northern-Europe want, is that now, finally, our borders will be protected against uninvited guests. Nothing else matters. The social fabric thanks to the influx of migrants is being destroyed at a pace nobody can keep up with. Costing the Netherlands a cool 7,2 billion a year, for instance.

For this border protection scheme , however, only very little money has been allocated thus far. Consequently, a firm swing to the right politically is in the offing across the whole of Europe.

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3 hours ago, Basil B said:

Typical responses  of someone who condones the words of those lying politicians...

I suppose you are going to give me a long list of politicians that don't lie.

 

Your suggestive posts hints that you might have supported the remain side in the referendum, unless you are one of those anti "Brit bashers' that just doesn't care.

 

Go on please, enlighten us all, which remain politician didn't lie in the 2016 referendum.:coffee1:

 

More importantly which lie did you believe.😀

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28 minutes ago, Laughing Gravy said:

I suppose you are going to give me a long list of politicians that don't lie.

 

Your suggestive posts hints that you might have supported the remain side in the referendum, unless you are one of those anti "Brit bashers' that just doesn't care.

 

Go on please, enlighten us all, which remain politician didn't lie in the 2016 referendum.:coffee1:

 

More importantly which lie did you believe.😀

A post replete with imagination.

 

Every argument you make is based on your own assumptions.

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