‘Weak’ EU Commission’s capitulation to US exposed by MEPs in scolding letter

Von der Leyen says world is 'full of contradictions and conflict'

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MEPs Valérie Haye and José Manuel Fernandes lambasted the EU executive lamenting Ursula von der Leyen’s team, saying they can no longer be trusted to work in EU citizens’ best interests.

Writing in Politico, the two members of the European Parliament claimed the Commission is about to “breach a legally binding agreement it sealed with MEPs and EU ambassadors” over how to repay future debts generated by the Recovery Fund.

In a humiliating analysis on the Commission’s approach to fiscal policies, the two parliamentarians who are co-rapporteurs on the reimbursement of the EU recovery plan and own resources, said pressure from the US on carbon taxes meant the Commission backtracked on its promises.

They wrote: “Can we still trust the European Commission when it comes to repaying European Union debt? The answer seems to be ‘no.’ The only party who can count on the Commission is the United States.

“The Commission is preparing to breach a legally binding agreement it sealed with MEPs and EU ambassadors just a few months ago.

“According to the deal, the debt was to be repaid with proceeds from new so-called ‘own resources,’ including a Carbon Border Adjustment Mechanism (CBAM), additional charges using the Emissions Trading System (ETS) and a new EU digital tax.

“Today, all three of these new sources of revenue for the EU budget are in doubt.

“This is a problem because there are only three options for repaying this debt: additional national contributions (meaning additional taxpayer money), cuts to European programmes such as the Common Agricultural Policy (CAP) or Erasmus, or making the digital giants, big industrial polluters, foreign CO2 importers and aggressive stock market players pay.

“The third solution is the right one — and it is the one we negotiated last year. The other two are unfair. And it would be strikingly ironic if the future-oriented EU budget were to be cut by 10 percent in order to reimburse a program called ‘Next Generation EU’.

“And yet, US pressure regarding CBAM and the EU digital tax has demonstrated the political weakness of this Commission, culminating in last week’s decision to postpone sine die the EU digital levy at the request of US Treasury Secretary Janet Yellen, due to global tax reform negotiations at the Organisation for Economic Cooperation and Development (OECD).”

They added the Commission is also planning to take another unilateral decision today, deferring the two other new own resources to an unspecified date as well.

“This is unacceptable,” they continued.

“We urge the College of Commissioners to preserve its credibility by thinking strategically and acting in the interests of the EU citizens it is meant to serve.”

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In a blunt threat to Ms von der Leyen’s team, they said they would do everything in their power to put an end to “weak decisions by the Commission and make those who do not currently pay their fair share of taxes pay for the recovery — whether it pleases foreign powers or not”.

The warning comes as European shares sank more than two percent on Monday, their worst session in nine months on worries that the fast-spreading Delta coronavirus variant could slow the global economic recovery.

Commodity-linked stocks, banks and travel shares lost more than three percent, with the oil and travel and leisure indices hitting February lows.

Extending losses from last week, the pan-European STOXX 600 index was down 2.3 percent, with all sectors in the red.

The German DAX dropped 2.6 percent, while Italy’s MIB plunged 3.3 percent, its steepest one-day drop since October.

UK’s FTSE 100 slumped 2.3 percent as rising coronavirus cases overshadowed optimism about England’s reopening of the economy.

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