DUBLIN — Governments will be more likely to back new EU taxes for the bloc’s next seven-year budget if they raise money that national governments are not already collecting, European Council President António Costa said.
In an interview with POLITICO, Costa set out for the first time what he gathered from leaders during his tour of 25 capitals on one of the thorniest issues in the talks: how to build support towards new EU levies — known as “own resources” — that would generate fresh revenue to the budget.
The answer will help determine whether EU governments can agree on a budget by the end of the year — before 2027’s elections in France, Italy, Spain and Poland threaten to derail the talks — without either cutting spending on new priorities or asking national governments to pay more.
“If we don’t create new own resources, we need to ask [for] more money from the member states,” Costa said. “We know that we need to keep the national contributions at a reasonable limit. For this, we need to have a credible basket of new own resources.”
However, some of the options on the table — such as a tobacco tax — are being challenged by governments because they would tap into revenue that is already being collected domestically.
Tobacco is already taxed nationally in all EU countries, Costa said, meaning an EU tax could simply reduce national revenue. But newer products such as vapes and e-cigarettes are not taxed in many countries.
“If you are taxing the same thing or a different thing” it matters, Costa said. If it’s a different thing, “then it’s really new money. Then it means it’s easier [to secure an agreement.]”
Costa indicated that some proposals on the table can be “fine-tuned” to address concerns from EU governments.
“At the end, we need to have a basket, enough balance between all member states,” he said.
Asked whether that meant making governments “equally unhappy,” Costa replied: “We need to share the unhappiness.”
“It’s the only way also to share the happiness of European investment,” he added.
Where to find the money
The Irish government, in its role at the helm of the six-month rotating presidency of the Council of the EU, is preparing a new negotiating package for October, based on its assessment of governments’ positions on both spending cuts and new taxes.
The Commission’s original proposal, published last year, included five levies estimated to raise more than €60 billion a year. But during the negotiations, governments resisted options they believed would affect them disproportionately.
The most unpopular ideas include a tax on companies operating in Europe known as CORE, opposed by Germany and others, and a mechanism to channel revenue from polluting companies into the EU budget, which Poland and other eastern countries reject.
The European Parliament has proposed additional levies on cryptocurrencies, online gambling and large digital companies. The Commission in May produced estimates for each new option.
Costa said a crypto levy had particular potential because national governments do not currently tax the sector.
“Everybody agrees that there is no reason to keep crypto without taxation,” he said. “It’s not reasonable. And to have a fair taxation — we should.”
But technical questions still need to be resolved, he added.
Costa described the digital levy as more complex, with governments divided over both its design and scope.
“There are a lot of countries that would like to have” a digital tax, he said. “We have countries that already have the digital tax, others prefer to include this in CORE, others don’t like the idea.”
The outcome would also depend on whether the levy covered companies, consumers or advertising, Costa said.
The wider budget fight
The debate on new revenue is tied to a broader dispute over the size of the budget.
When Cyprus held the presidency of the Council of the EU in the first six months of 2026, it already cut €32 billion from the Commission’s original proposal. Ireland is expected to revise the figure again, with Germany and other governments pressing for reductions of hundreds of billions of euros.
However, Costa cautioned that cuts to EU priorities might ignite resistance from governments.
“Who wants to cut on defense? No one,” he said. “Who wants to cut on competitiveness? No one. Who wants to cut on agriculture? No one.”
Governments broadly agree that EU administrative spending can be reduced, Costa said, but that would not be enough to resolve the gap because “it’s a very small amount.”
Costa said all leaders he had spoken to remained committed to reaching an agreement by the end of the year, so the next budget can take effect on Jan. 1, 2028.
Without an agreement, he said, the EU would face cuts to funding for farmers, businesses, researchers and students.
Costa will take over the negotiations after the October European Council meeting, when EU leaders will react to Ireland’s negotiating package.
EU budget needs taxes governments aren’t already raising, Costa says
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