THE STATE OF THE EUROPEAN UNION REPORT. Europe in a period of transition

THE EU NEXT GENERATION RECOVERY FUND, THE YEAR OF ITS IMPLEMENTATION 51 debt boasts a maximum triple A rating, which means that the financing costs offered by the markets are more advantageous for many MS. Furthermore, the demand for Eurobonds is guaran- teed as they are very attractive assets for international investors. Some authors have mentioned that, thanks to this step, the Euro is on its way to becoming a world reserve currency, competing with the dollar. In particular, the Commission made its first issue of community debt in June 2021, raising 20,000 million Euros from the European fund. This ten-year issuance, plus a further issuance in July, has managed to mobi- lise the not-insubstantial sum of 45,000 million Euros in long-term bonds. The success of the operation exceeded all expectations, as demand for the European bonds was seven times greater than the offer. Consequently, the community debt issuance is going to be a hugely important measure in terms of making recovery viable for the MS. Repayment of the common debt and determining European taxes Another important trait of the mechanism envisaged in the NGEU, differentiating it from the previously-raised Eurobond proposals, is linking it to the new Union Bud- get. Now it is actually the Commission that takes on the debt, guaranteed by the Union budget. The amount of the new European Budget or Multian- nual Financial Framework (MFF) 2021-2027, approved by the agreement between the European Parliament and Council on 14 December 2020 rose to 1,074,000 million Euros. If we add this quantity to the 750,000 million Euros from the recovery instrument, we get a total eco- nomic package close to 1.8 billion Euros. In addition, the aforementioned inter-institutional agreement included a road map for staggered implan- tation of new European taxes. These taxes intend to ad- dress an increase in the ceiling for the EU’s own resources with a view to repaying the European debt.To set up this measure, it was necessary to review the Own Resources Decision, a community standard that determines how the EU budget should be financed. In this respect, it is important to highlight that, if the introduction of new European taxes to feed the Union budget is not approved, the debt committed due to the NGEU would have to be repaid by increasing national contributions. These circumstances are working as an in- centive for some Member States not to have used their right to veto in the new taxation measures so far, despite being the most reticent to take the leap in taxation mat- ters, and also net contributors to the budget. Finally, on 27 May, the revision of the Own Resourc- es Decision was approved, after a ratification process that was not without its ups and downs. Remember that this revision required unanimity from the Council, and ratification from the European Parliament and the MS national parliaments. After ratification from Austria and Poland, it was possible to complete the process and, con- sequently the funding could reach the MS. Before that, we had to wait for the German Consti- tutional Court to decide against an appeal brought by certain anti-European forces which questioned the EU’s competency to perform the joint debt issuance. Establishing European taxes would be a very signifi- cant step, as it would set up a permanent flow of income for the EU that will last even beyond the deadline for repaying the debt contracted due to the pandemic. All the same, this calls for more ambition in this mat- ter, as the collection planned with the new tax figures considered thus far is going to be insufficient to all ex- tents and purposes. Taxing the digital economy and transnational profit The Commission intends to present a new legislative package on own resources in the second half of 2021, that is going to include various European taxes to fill the European treasure chests.