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EU heads of state and government agreed in July on a long-term budget of 1.074 trillion euros, accompanied by the Economic Recovery Fund. However, MEPs argued that budgetary resources for programmes in areas such as health and research were not sufficient and that there should be clear guarantees that the EU intends to create new sources of revenue for its budget in the coming years. And the German Presidency of the Council of the EU has agreed that an additional EUR 15 billion could be allocated to budgetary programmes in areas such as health, research and education, in addition to the amounts agreed by EU heads of state and government for programmes in July. Hungary and Poland have blocked the approval of the EU budget because of a clause linking funding to respect for the rule of law in the bloc. However, shortly after the budget freeze, Austrian Chancellor Sebastian Kurz told a conference that „respect for the principles of the rule of law is an absolute necessity“ because the sums that the EU has given to Member States are so important. One of Parliament`s main requirements was a legally binding timetable for the introduction of new sources of revenue for the bloc`s coffers to ensure that the cost of borrowing for the stimulus fund does not enter into budgetary programmes. Earlier this week, as negotiations on the EU budget broke down, a spokesman tweeted a GIF from a Harry Potter film and begged for patience. On the other side of the debate, some MPs and national governments say they too can play the veto game. They say they will not sign elements of the fiscal and stimulus plan that will require their approval unless the legal mechanism is approved.

On Tuesday, the Commission welcomed the budget agreement, which commits to spending at least 30% of the total amount – EUR 546 billion – to combat climate change. With regard to the financing of the budget, the Commission has committed to propose, by June, a MECHANISM for co2 limits to tax high-carbon imports and to review digital levy plans of 3%, to be paid by online companies whose annual revenues exceed EUR 750 million, of which at least EUR 50 million are taxable in bulk. If Parliament and the Council of the EU agree, these measures would come into force before 2023. The Commission said it would also consider proposing an extension of the EU emissions trading scheme to air and sea transport by June and said it would reconsider proposals for a financial transaction tax and a new contribution to corporation tax by June 2024.