Criticism intensifies from the Commission towards the mentioned entity.
The European Commission's proposed €2 trillion Multiannual Financial Framework (MFF) for the years 2028 to 2034 has sparked significant controversy across various stakeholders. The budget proposal, an increase of approximately €700 billion compared to the current plan, aims to address climate change, biodiversity loss, and boost competitiveness. However, it faces criticism on several fronts, particularly in relation to businesses.
## Financial Consolidation and Centralization
One of the main criticisms is the Commission's plan to merge multiple funding streams into a single pot for each member state. This approach is opposed by several member states, including Poland, which fears it could lead to further centralization and reduce regional control over cohesion policies.
## Lack of Clarity
The proposal has been criticized for its lack of detail on how funds will be distributed and implemented. Analysts and lawmakers are skeptical about the proposed budget's effectiveness and benefits, particularly in key sectors like defense.
## Sectoral Spending Adjustments
The EC proposes reducing spending on agriculture while increasing it in other areas, such as defense. This has raised concerns among countries that rely heavily on CAP funding.
## Reform Conditionalities
The plan includes making fund disbursements dependent on national reforms, which is seen as a contentious issue by many member states and political groups.
## Impact on Businesses
The Commission plans to introduce a new €410 billion fund aimed at enhancing competitiveness. However, there is uncertainty about how this fund will operate and benefit businesses. The Commission also proposes a graduated corporate tax on large companies with an annual turnover of over €100 million. For a turnover of €100 million to €249 million, companies would contribute €100,000; for a turnover of €250 million to €499 million, €250,000; for a turnover of €500 million to €749 million, €500,000; and for a turnover of €750 million and above, €750,000.
However, these new taxes are not without controversy. The German Chamber of Industry and Commerce (DIHK) has stated that such a measure would send the "completely wrong signal" and that companies need tailwind, not additional taxes. Similarly, the German Association of the Automotive Industry (VDA) and the DIHK have expressed concerns that additional taxes would harm growth and weaken the competitiveness of companies in the EU. The German government spokesman, Stefan Kornelius, has stated that they will not be able to accept the Commission's proposal due to the additional burden on businesses.
## Potential Impact on Businesses
Any changes in funding distribution and taxation policies could have significant implications for businesses within the EU. On the one hand, the proposed increase in research and innovation funding, such as the Horizon Europe program, could support businesses involved in these sectors. On the other hand, businesses may face challenges if the conditions for accessing funds become more stringent or if tax policies change, which could influence investment decisions and competitiveness.
Environmental organizations, such as WWF, have criticized the proposed cuts to climate and environmental protection budgets, stating that they would leave Europeans ill-prepared for intensifying crises in climate change and biodiversity loss.
In conclusion, the controversy revolves around the potential impact of the budget on regional autonomy, sectoral funding, and the operational details of new initiatives. The lack of clarity and concerns about centralization and reform conditions have led to widespread criticism from member states and the European Parliament. The Commission's proposal for a new tax to relieve member states is also facing criticism from the German government, the VDA, and the DIHK.
- The European Commission's plan to introduce a new €410 billion fund for enhancing competitiveness faces uncertainty among businesses regarding its operation and benefits, as they express concerns about a proposed graduated corporate tax on large companies.
- The German Chamber of Industry and Commerce (DIHK) argued that the Commission's proposal for an additional corporate tax would send the "completely wrong signal" and harm growth, weakening the competitiveness of companies in the EU.
- The EC's proposed €410 billion fund for competitiveness and the graduated corporate tax are not without controversy, leading to opposition from various business groups and the German government, potentially impacting investment decisions and competitiveness within the EU.
