Costa explores new EU-wide taxes to break budget deadlock

European Council president seeks own resources as member states resist higher contributions

By LineZotpaper

Published21 October 2026

Read Time3 min

European Council President António Costa has taken over negotiations on the European Union's next long-term budget, searching for new EU-wide taxes after leaders failed to reach agreement at last week's summit. With national governments unwilling to increase their contributions, Costa is examining options ranging from taxes on large companies and digital services to levies on tobacco, carbon emissions and online gambling.

Costa said at a press conference that new own resources are necessary to keep national contributions at a reasonable level while preserving the bloc's ambition. "To reach an agreement, we need to keep national contributions at a reasonable level, while preserving our ambition and the means to deliver on our common priorities. For this to be possible, it is fundamental to consolidate the work on the new own resources," he said.

A compromise put forward by Ireland kept two of the most contested proposals: the Corporate Resource for Europe (CORE), a tax on large companies with annual turnover above €100 million, and the Tobacco Excise Duty Own Resource (TEDOR), which would see member states pay the EU 15% of excise duty on tobacco products. The Irish proposal drew criticism from the European Parliament, whose ideas for taxes on digital services, online gambling and crypto assets could raise up to €25 billion a year.

"It is clear that the presidency refused to take any decision on the revenue side, proposing only minor adjustments. We are especially very disappointed that none of Parliament's proposals were taken on board, despite having received positive feedback from many member states," said MEP Danuše Nerudová (Czechia/EPP).

The Commission is now examining whether CORE could be combined with a digital levy, another controversial proposal that risks provoking Washington because most large tech companies are American. Under the emerging idea, the threshold would be set high enough to target mainly large foreign companies. Other proposals include diverting 30% of revenues from the EU's Emissions Trading System into the EU budget, a tax linked to the Carbon Border Adjustment Mechanism, and a levy based on electronic waste. A tax on online gambling has met strong opposition from Malta, while a tax on crypto asset capital gains is seen as difficult to implement. Greece has proposed coordinating national 6G spectrum auctions to fund the budget.

An EU official said the situation is being evaluated and that the impact of new own resources on member states needs to be modulated. "Now is the moment to evaluate the situation and assess the best way forward. We do not exclude taking on board any proposals," the official said.

Analysis

Why This Matters

The outcome will determine how the EU funds its priorities on defence, climate and competitiveness for the next seven-year budget cycle.
Proposed taxes on large companies and digital services could affect businesses across Europe and trigger tensions with Washington.
Failure to agree risks delaying the budget, which is due to take effect from 1 January 2028.

Background

The EU is negotiating its next Multiannual Financial Framework, the bloc's long-term budget. Member states are reluctant to increase national contributions, so the European Commission and European Parliament have proposed new own resources to raise revenue directly for Brussels. Last week's summit ended without agreement, leaving Council President Costa to steer the next phase of talks.

Key Perspectives

European Council President António Costa: Argues that new EU-wide taxes are essential to reconcile strained national budgets with the bloc's growing spending ambitions. Member states: Divided; Poland opposes diverting ETS revenues, Malta rejects a tax on online gambling, and Luxembourg is strongly against the tobacco levy. European Parliament: Disappointed that its proposals on digital services, online gambling and crypto were not taken on board in the Irish compromise. European Commission: Defends CORE as targeting only large companies and is exploring combining it with a digital levy to avoid sector-specific targeting.

What to Watch

Whether Costa can secure unanimous support for a package of own resources ahead of the 1 January 2028 deadline.
How a possible combined CORE-digital levy is received by member states and by the United States.
The positions of Poland and Malta, which face domestic political pressure on ETS revenues and gambling taxation respectively.

Sources

Brussels goes back to the drawing board on Europe-wide taxes · Euronews

Checked

12 claims in this story checked against 1 source: 10 supported.

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SupportedCosta is exploring new EU-wide taxes to break the budget deadlock.Euronews: “European Council President António Costa is scrambling to find new EU-wide taxes to fund the bloc's next long-term budget after last week's inconclusive summit left leaders deadlocked over how much they are willing to pay.”
SupportedCosta seeks new own resources while member states resist higher contributions.Euronews: “With national governments reluctant to increase their contributions, Costa is exploring ways to raise money directly for Brussels”
SupportedCosta has taken over negotiations on the EU's next long-term budget.Euronews: “European Council President António Costa has taken over the negotiations on the bloc's next long-term budget”
SupportedLeaders failed to reach agreement at last week's summit.Euronews: “EU leaders failed to bridge their differences over the budget last week, leaving Costa to steer the next stage of negotiations.”
Partly supportedNational governments are unwilling to increase their contributions.Euronews: “With national governments reluctant to increase their contributions”
SupportedCosta said: “To reach an agreement, we need to keep national contributions at a reasonable level, while preserving our ambition and the means to deliver on our common priorities. For this to be possible, it is fundamental to consolidate the work on the new own resources,”Euronews: ““To reach an agreement, we need to keep national contributions at a reasonable level, while preserving our ambition and the means to deliver on our common priorities. For this to be possible, it is fundamental to consolidate the work on the new own resources,” Costa said at a press conference”
Partly supportedCORE is a tax on large companies with annual turnover above €100 million.Euronews: “CORE would only hit large companies with a net annual turnover above €100m”
SupportedTEDOR would have member states pay the EU 15% of tobacco excise duty.Euronews: “the Tobacco Excise Duty Own Resource (TEDOR), which would see member states pay the EU a 15% call rate on the excise duty on tobacco products.”
SupportedParliament's proposals for digital services, online gambling and crypto taxes could raise up to €25 billion a year.Euronews: “the European Parliament, whose ideas for new taxes on digital services, online gambling and crypto assets could raise up to €25bn a year.”
SupportedMEP Danuše Nerudová said: “It is clear that the presidency refused to take any decision on the revenue side, proposing only minor adjustments. We are especially very disappointed that none of Parliament's proposals were taken on board, despite having received positive feedback from many member states,”Euronews: ““It is clear that the presidency refused to take any decision on the revenue side, proposing only minor adjustments. We are especially very disappointed that none of Parliament’s proposals were taken on board, despite having received positive feedback from many member states,” said MEP Danuše Nerudová (Czechia/EPP).”
SupportedThe Commission is examining combining CORE with a digital levy, with a high threshold intended to target mainly large foreign companies.Euronews: “the Commission is now examining whether CORE could be combined with a digital levy”
SupportedAn EU official said: “Now is the moment to evaluate the situation and assess the best way forward. We do not exclude taking on board any proposals,”Euronews: ““Now is the moment to evaluate the situation and assess the best way forward. We do not exclude taking on board any proposals,” an EU official with direct knowledge of the matter told Euronews on condition of anonymity.”