As the end of the year approaches, political activity in Brussels continues at full speed, with increasingly intense negotiations on the long-term EU budget. According to an EU diplomat, these talks on the “multiannual financial framework” (MFF), which covers EU spending between 2028 and 2034, are shaping up to be the “most difficult in the history of the EU.” In July, the European Commission shamelessly proposed to double its spending from around €1.2 trillion over seven years to €2 trillion, despite the fact that this fall, the European Court of Auditors issued an “adverse” opinion on EU spending for the sixth consecutive year.
In doing so, the European Commission also requested greater powers over so-called “own resources,” which are equivalent to EU taxes, in particular on large companies, tobacco, electronic waste, and carbon emissions.
Demonstrating how out of touch the European Commission bureaucracy has become, it emerged that the “Corporate Resource for Europe” (CORE) proposal, which would generate around €6.8 billion per year by taxing companies with an annual turnover of more than €50 million and a permanent establishment in the EU, did not receive a single positive comment from any EU member state when it was presented.
The “Tobacco Excise Duty Own Resource” (TEDOR) is also encountering strong resistance. In July, Swedish Finance Minister Elisabeth Svantesson called the proposal “completely unacceptable,” pointing out that the Commission wants to combat not only tobacco products but also alternatives to tobacco. Svantesson said: “It appears that the European Commission’s proposal would lead to a very substantial increase in taxes on white snus, and furthermore, the Commission wants the tax revenue to go to the EU and not to Sweden.”
It is no coincidence that Sweden is hostile to such a paternalistic approach. The country is the only EU member state with an exemption from the EU ban on snus, which serves as an alternative to smoking tobacco. After thirty years, the results are clear: not only does Sweden have one of the lowest smoking rates in Europe, but it also has a much lower incidence of smoking-related diseases. Compared to other EU countries, Sweden has 44% fewer tobacco-related deaths, 41% fewer cases of lung cancer, and 38% fewer cancer deaths.
The European Commission does not even seem to understand the argument put forward by proponents of this approach, as people such as the European Commissioner responsible for revising the EU Tobacco Tax Directive, Wopke Hoekstra, stated in a hearing of the European Parliament that “smoking kills, vaping kills.” Hoekstra thus equated the two, even though, according to the UK government’s Department of Health, “the most reliable estimates show that e-cigarettes are 95% less harmful to health than regular cigarettes.”
Pressure from NGOs
The Danish Presidency of the Council of the European Union is also on the side of the paternalists. Reportedly, under pressure from NGOs, it has doubled down on its position with a new proposal to amend the EU Tobacco Excise Duty (TED) Directive through significantly higher taxes on most tobacco and nicotine products. Brussels Signal notes that
the revised Danish proposal introduces stricter definitions, higher tax rates, and a more aggressive approach to closing loopholes. It reflects the priorities of the most hardline NGOs, such as Smoke Free Europe, and appears, in part, at odds with Member State positions and ongoing scientific debates. The Danish amendments adopt the numerical proposals supported by NGOs. These include setting the tax rate for heated tobacco products (HTPs) at €360 per kilogram, more than double the European Commission’s initial proposal of €155 per kilogram.
Surely the Danish presidency could have avoided copying and pasting the proposals put forward by NGOs, especially in light of the scandal involving them, in which it emerged that the Commission had spent billions of euros of taxpayers’ money to fund NGOs, providing them with instructions on how to influence EU decision-making.
Hearings on this issue have already taken place in the European Parliament. One of the former European commissioners involved, Frans Timmermans, refused to attend, but the director of DG ENVI, Eric Mamer, did show up. On that occasion, he acknowledged that, in the past, specific lobbying activities were described in detail in the work programs attached to the operating grant applications submitted by NGOs, but stressed that, under the new guidelines in force since 2024, this would no longer be the case. Nevertheless, MEPs such as Sander Smit have called for grant contracts to be made public in the future. The fact that NGOs continue to have a major influence on EU decision-making, despite recent revelations, only reinforces the need to ensure that false representatives of civil society are not supported by taxpayers.
The return of the frugal
In any case, one promising development is the return of the EU’s frugal member states, which are forming a coalition to curb demands for ever-increasing EU spending. Politico notes that the traditional “frugal” alliance, consisting of Austria, Sweden, Germany, the Netherlands, Finland, and Ireland, is now being joined by France and Belgium, both net contributors to the EU budget. Denmark is expected to join in January, when it will no longer hold the EU Council presidency.
This coalition will reportedly call for a reduction in the size of the EU’s long-term budget. Austrian Minister for European Affairs Claudia Plakolm commented: “If we have to tighten our belts at the national level, we cannot explain why the European Commission has presented the largest EU budget ever… We must not spend more, we must spend better.“ Her Swedish counterpart Jessica Rosencrantz added: ”I see no other way forward than to put this budget on a diet and focus on our core tasks.”
The frugal countries appear to have already succeeded in convincing other EU member states to put pressure on EU institutions to adopt greater fiscal rectitude. A draft position of the EU Council on the next seven-year budget calls for “budgetary discipline” across all EU institutions, compared to the European Commission’s proposal to increase spending on EU administrative costs from €82 billion to €118 billion. The EU member states therefore state: “Simplification efforts in all policy areas, including omnibus packages and the reduction of the number of programs [in the multiannual financial framework], as well as the introduction of new technologies, including artificial intelligence, should lead to a reduction in administrative burdens and corresponding savings.”
Is the party over in Brussels?
[Photo: By EmDee – Own work, CC BY-SA 4.0]
