Financing the European Community

Controlling spending on agriculture is essential for resolving the European Community’s financial problems. To achieve that, there should be mandatory rules on decision-making that are binding on budgetary authorities and councils of ministers. This is one of the recommendations made by the WRR in its report Financing the European Community (Report no. 32, 1987).

Structural and mandatory financial framework

To make the budgetary process more manageable, every five years the European Council should adopt a long-term financial framework on the basis of proposals from the Commission and the European Parliament. The aim of the framework would be to guide future policy and it would contain the strategic decisions by which the budgetary authority is bound.

Limited powers to levy taxes

In addition, in the longer term the Community should have limited powers to levy taxes itself. At first glance, corporation tax appears to be the most attractive tax base for limited fiscal sovereignty of this kind.

The WRR produced this report at the request of the government.