European Union governments are preparing for difficult negotiations over how to finance the bloc’s next long-term budget, with fresh sources of revenue expected to dominate discussions ahead of key national elections in several member states next year.
The budget, covering the 2028-2034 period, is expected to support major investments in areas such as artificial intelligence, defence, agriculture and fisheries. Unlike the current financial framework, which relies largely on national contributions equal to 1.13% of each country’s gross national income, policymakers are examining new “own resources” that would provide the EU with a more direct source of funding.
The debate comes as governments face growing pressure to balance ambitious spending plans with political resistance to new taxes. Many officials acknowledge that introducing EU-wide levies could prove controversial, particularly as voters often view such measures as decisions imposed from Brussels. Sweden has already voiced opposition to any expansion of EU own resources, arguing that wealthier member states would shoulder a disproportionate share of the burden.
Among the leading proposals is expanding revenue from the Carbon Border Adjustment Mechanism (CBAM), which applies carbon pricing to imports such as steel, aluminium, cement, fertilisers, electricity and hydrogen. The mechanism enjoys broad political support because it helps protect European manufacturers from competitors operating under weaker environmental standards. Its revenue potential, however, is considered relatively modest.
Another proposal would introduce a handling fee on low-value parcels imported from outside the EU, particularly targeting the growing flow of e-commerce shipments from platforms such as Shein and Temu. Officials say the measure would help customs authorities cope with billions of small packages entering the bloc each year while supporting efforts to address trade imbalances with China.
A tobacco excise duty is also attracting attention. Supporters argue it could generate around €11.2 billion annually while encouraging healthier lifestyles. Some southern and eastern European countries remain concerned about its possible impact on jobs and illicit tobacco markets.
Other ideas under discussion include an online gambling tax estimated to raise €1.9 billion a year, a Corporate Resource for Europe (CORE) that would require large companies with annual turnover above €100 million to contribute to the EU budget, and a charge linked to electronic waste that could generate about €15 billion annually while encouraging recycling.
Less certain proposals include directing more revenue from the EU Emissions Trading System into the central budget, introducing a digital levy on major technology companies, and creating a tax on cryptocurrency transactions or gains. Each faces political or technical hurdles, with several member states warning they could affect competitiveness or trigger international disputes.
Any new financing system will require unanimous approval from all 27 member states, making compromise essential. As negotiations gather pace, governments will need to balance funding the EU’s strategic priorities with domestic political concerns over taxation and economic competitiveness.
