BRUSSELS (Dow Jones)--The U.K. government would see its direct contribution to the European Union budget reduced by EUR7.6 billion by 2020 if the European Union's proposal for a regional transaction tax to fund Brussels' spending is agreed, Budget Commissioner Janusz Lewandowski said Thursday.
The Commission's proposal, a centerpiece of its 2014-2020 budget plans, faces a tough fight for survival. A number of countries are skeptical about a financial transactions tax, including the U.K. and Sweden. Many governments also want to maintain member state control of the money Brussels receives.
The Commission estimates that by 2020 a financial transactions tax levied on shares, bonds and derivatives could generate EUR81 billion annually. The Commission says a third of that would be reserved for member states while Brussels would automatically receive the other two thirds, some EUR54 billion.
According to the Commission's numbers, the French contribution to the EU budget would fall by EUR8.8 billion, Germany would see its payments fall EUR10.7 billion and Italy would provide EUR6.5 billion less.
Still every euro saved on payments to Brussels would be one euro surrendered by national governments if a transactions tax was introduced.
The new numbers come as the battle heats up over the 2014-20 budget settlement, which must be agreed by December and on the transactions tax. Nine countries have said they want to press ahead with a tax, including France and Germany. At the same time, France, Germany and the U.K. are insisting that the EU budget should not rise by more than inflation in coming years.
The Commission has long wanted to increase the amount of funds directly earmarked for Brussels, ensuring a return to the regional bloc's earlier years when EU "own resources" funded most EU expenditure.
However member states are skeptical about that. Member state officials argue that control of those funds gives national governments greater sway over EU spending and priorities.
The Commission hopes that by offering national governments the chance to tell voters they are slashing the amount of money they sent to Brussels, the EU's executive will win over some member states for their plans.
"We are coming with some striking figures to assist the debate," Lewandowski said at a press conference.
-By Laurence Norman, Dow Jones Newswires; +32 (0)2 741 1481;
laurence.norman@dowjones.com
