Nuno Gama Pinto, 2021

Member of the AASO Advisory Board. University Professor, PhD in Management, Manager and Business Administrator.

The European Commission recently presented an action plan to promote the implementation of the European Pillar of Social Rights. With this initiative, which precedes the Social Summit organized by the Portuguese Presidency of the Council of the European Union (EU), in May, in the city of Porto, the Commission hopes to be able to translate into concrete actions a set of principles, adopted by the Member States in 2017, which are slow to get off the ground.

Approved at the Social Summit for Fair Employment and Growth, held in Gothenburg in November 2017, the European Pillar of Social Rights sets out 20 essential principles and rights aimed at ensuring fairness and the functioning of labor markets and protection systems society in the European Union. This is the first set of rights proclaimed by the European institutions since the EU Charter of Fundamental Rights. However, its effective application is still (very) far from being a reality.

The constraints imposed by the pandemic on the functioning of the Single Market, namely in terms of the different freedoms of movement, the deregulation of labor markets, the deterioration of living conditions and labor relations, social dumping, the use of new forms of work1, are just some of the (many) questions that remain open.

As Angela Merkel recognized in July 2020, when presenting the objectives of the German presidency of the EU Council, which took place in the second half of 2020, Europe will only successfully overcome the crisis if it manages to overcome its differences and identify common solutions.

“I firmly believe that the social dimension is as important as the economic dimension. We need a fair Europe in economic and social terms", said the German Chancellor in the European Parliament.

In an opinion, adopted in July 2019, the European Economic and Social Committee proposed the renewal of the European Union's economic policy coordination and governance system, defending the commitment to a new European strategy for sustainable development.

With regard to the European Semester2 and the objectives defined for cohesion policy, the Committee expressed its agreement with the proposal presented by the European Commission to strengthen the link between the European Semester and the financing of cohesion policy in the new Multiannual Financial Framework for 2021-20273. The total amount approved for this period represents more than 5% of the Gross Domestic Product of the European Union. However, it will hardly be enough, in our opinion, to be able to respond to an unprecedented crisis on a global scale.

The reform of the European Union's own resources system

In February 2021, the European Parliament approved a roadmap for introducing new sources of funding over the next seven years. In addition to the contribution from a tax on plastics, already in force from 2021, the approved text also provides for the introduction of new own resources based on the emissions trading system, with the creation, on 1 January 2023, of of a mechanism for adjusting carbon emissions at borders. Also in early 2023, a digital fee is expected to be applied, with the introduction of a tax on financial transactions and a new common base for corporate tax expected later.

The EU budget's sources of revenue (also referred to as “own resources”) have remained unchanged for several years. They include, for example, customs duties and national contributions based on Value Added Tax (VAT) and Gross National Income (GNI) revenues.

The introduction of new sources of revenue into the EU budget is therefore intended to complement existing own resources:

  • traditional own resources: coming mainly from customs duties and sugar levies (the Member States will in future retain, as collection costs, 25% of the amounts collected, instead of the 20% retained between 2014 and 2020);

  • VAT-based own resources: resulting from the application of a uniform rate of 0.3% to the value added tax base of each Member State, with the VAT base limited to 50% of each country's GNI (the methodology used should, in the future, be simplified);

  • GNI-based own resources: resulting from the application of a uniform rate to the gross national income of the Member States, adjusted each year, with the aim of balancing recorded income and expenditure (these resources should, in principle, remain unchanged ).

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