Poland calls for EU digital tax and entry fee to address budget shortfall

Poland is advocating for new sources of EU funding to finance major investments and regional development projects, according to Katarzyna Pełczyńska-Nałęcz, the country’s Minister for Development Funds and Regional Policy.

Speaking on January 29, Pełczyńska-Nałęcz emphasized the need for a comprehensive investment strategy within the European Union but highlighted that securing these investments would require fresh revenue streams for the bloc, Caliber.Az reports referring to international media.

Among the potential solutions she proposed were a digital tax, an entry fee for joining the EU, or a new common investment fund, similar to the Recovery Plan (Next Generation EU), but with different priorities and rules.

“The US and the UK impose such fees, so why not consider an entry fee for the EU? This could generate additional common funds,” Pełczyńska-Nałęcz said, pointing out that this approach would be realistic given the EU’s current financial constraints.

Piotr Serafin, Poland’s Commissioner responsible for the EU budget, is overseeing ongoing discussions regarding potential funding mechanisms. Sources within the European Commission have confirmed that the EU is facing a weak budget situation and urgently needs new resources or an increase in membership contributions from EU countries.

Meanwhile, experts from the Bruegel think tank have analyzed how the EU’s budget would change if the bloc were to expand and accept the nine official candidate countries: Albania, Bosnia, Georgia, Moldova, Montenegro, North Macedonia, Serbia, Turkey, and Ukraine.

According to Bruegel, the financial impact of such an enlargement would be significant, particularly for the EU’s less developed regions, which would lose funding as they are reclassified as “transition regions” after new, poorer countries join. This change would lead to funding cuts for several countries, including Italy and Spain, which would each lose around 9 billion euros. Portugal would lose 4 billion euros, while Hungary and Romania would each face a 2 billion euro reduction.

If all nine candidate countries were to join the EU, the net cost of enlargement for the current 27 members would amount to approximately 26 billion euros annually. However, Bruegel also pointed out that the enlargement would bring economic benefits, particularly in terms of increased exports and foreign direct investment (FDI).

The think tank highlighted that FDI flows from Western countries to Central and Eastern European countries that joined the EU between 2004 and 2013 have proven lucrative, and this trend is expected to continue with the nine new members. Furthermore, the new member states could help ease labour shortages in certain EU countries by adding more workers to the labour force.

As the debate over the EU’s future financial structure continues, Poland’s call for new revenue streams reflects the growing challenges of financing a larger and more diverse European Union.

By Tamilla Hasanova