Letter to Finance Ministers ahead of ECOFIN
Dear Finance Ministers,
As you prepare to meet in Luxembourg on 20 June, we urge you to consider a matter of growing importance: the urgent need to establish new, fair, and sustainable resources for the European Union.
The European Union is entering a new phase, with evolving priorities that require a stronger financial foundation. From driving the just green transition and enhancing social inclusion to advancing cohesion and industrial policy while fulfilling international cooperation with partners, these ambitions cannot be achieved without additional resources. A significant portion of the EU’s resources is also needed to repay the Recovery and Resilience Facility, which was instrumental in supporting Europe’s recovery amidst multiple crises. Looking ahead, the EU must retain the capacity to respond to new challenges and abide by its human rights commitments, including through common borrowing to finance European and global public goods. Ensuring that such debt is backed by genuine own resources is not only a question of fiscal prudence, but it is also essential to build a stronger and more resilient Union.
Attempting to meet these objectives by reshuffling existing funds or imposing austerity is neither viable nor politically acceptable. The EU is committed to ambitious climate, biodiversity, and social targets, the Sustainable Development Goals (SDGs) and cohesion policy, all of which demand sustained public investment. At the same time, European citizens are unlikely to support measures involving painful spending cuts or an increased tax burden on the working and middle class.
We firmly oppose the current trend of diverting funds away from social, green, development, or humanitarian programmes to meet increased defence spending requirements or arbitrary debt-to-GDP ratios. The potential to raise sufficient resources already exists - if mobilised fairly.
As representatives of civil society organisations and trade unions, we stress that any new revenue measures must be grounded in human rights principles as well as the principle of fairness and the “polluter pays” principle. Those with greater financial capacity, and those who have contributed most to the climate crisis, should shoulder the greatest share of the burden.
We welcome the Polish Presidency’s efforts to revive the debate on new own resources for the EU budget and express strong support for the following options:
Taxing extreme wealth: A progressive wealth tax of up to 5% on Europe’s multimillionaires and billionaires could generate approximately €286.5 billion annually.
Fossil fuel profit contribution: The EU’s solidarity contribution on energy companies and equivalent national measures have generated more than €26 billion in two years, while a global polluter profit tax on fossil fuel companies could have raised up to US$400 billion globally in 2024.1
A levy on aviation: A frequent flyer levy could raise an estimated €63.6 billion per year.
A financial sector taxation: Depending on estimates, a Financial Transaction Tax could, for example, represent an additional resource of between €17 and €43 billion a year for the European Union.
Additional information on these options is provided in the attached annex.
Beyond generating much-needed revenue and staying true to the Treaty of the European Union and the Treaty of the Functioning of the European Union, these taxes would help reduce inequality and environmentally harmful practices. They would also help restore trust in politicians, which is increasingly under strain, as growing numbers of young people, workers, and marginalised populations struggle to make ends meet, while the middle and working classes bear a higher tax burden than the wealthiest individuals. Moreover, the cost of climate inaction is increasingly weighing on public budgets and on the most vulnerable, and threatens the economy and tomorrow’s society.
Even if implemented at the national level, coordination across the EU could greatly limit tax avoidance opportunities and aggressive tax planning. Revenues should be directed toward national budgets, repay the Next Generation EU debt, and finance the next EU budget, including increased support for partner countries.
Now is the time for bold, forward-looking decisions. There is growing political and economic momentum behind a stronger EU budget funded through progressive EU resources. You, as European Finance Ministers, have both the opportunity and the responsibility to build consensus about ambitious tax reforms to finance the economic transformation we urgently need in a continent that warms up twice as fast as any other in the world, and to meet our international commitments for sustainable development and climate finance. The financial cost of inaction would be immense and would fall on young people and future generations.
Yours sincerely,
Nicolò Wojewoda, Europe Regional Director, 350.org
Javier Garcia de la Oliva, Regional Head Europe and Americas, ActionAid International
Arnault Vercherin, EU Advocacy Officer, Aidsfonds
Nuno Barroso, Governing Board President, APIT Portugal
Maria Ron Balsera, Executive Director, Center for Economic and Social Rights, CESR
Chiara Martinelli, Director, Climate Action Network (CAN) Europe
Dana Mareková, Coordinator, Climate Coalition Slovakia
Tanya Cox, Director, CONCORD Europe
Heidegger, Deputy Secretary General, European Environmental Bureau
Kuba Gogolewski, Project Coordinator, Fundacja RTON
David Ryfisch, Head of the Future-Proof Finance Division, Germanwatch
Valentina Barbagallo, EU Representative, Global Citizen
Eef Wuyts, External Relations Director, International Planned Parenthood Federation European Network
Danny Sriskandarajah, Chief Executive, New Economics Foundation
Cristina Fernandez-Duran, Head of Oxfam EU Office, Oxfam
Elose Todd, Executive Director and Founder, Pandemic Action Network
Rebecca Gowland, Executive Director, Patriotic Millionaires International
Jan Willem Goudriaan, General Secretary, The European Federation of Public Service Unions (EPSU)
Emily Wigens, EU Director, The ONE Campaign
Willy Bergogné, Director, Save the Children Europe
Jonas Sonnenschein, Deputy Director, Umanotera, Slovenia
ANNEX: FOUR PROGRESSIVE TAXATION OPTIONS AS EU OWN RESOURCES
Tax on extreme wealth. Wealth concentration at the top has reached unprecedented levels. In 2022, the wealthiest 1% held a quarter of the net personal wealth in the EU, while the bottom 50% owned just 3.2%. Meanwhile, younger generations face significant barriers to wealth accumulation due to rising housing costs, student debt, and precarious employment.
Interest in taxing the super-rich is growing at national, regional, and global levels. According to the Eurobarometer , 67% of Europeans agree that it is important that governments tax the rich to support the poor. In November 2024, G20 governments agreed to cooperate on taxing the ultra-rich and ahead of the July G20 ministerial meeting, several organisations presented a petition with over 1.5 million signatures worldwide calling to tax the ultra-wealthy. More than 350.000 signatures have been collected through the European Citizens Initiative for a European wealth tax from October 2023 to October 2024.
A tax on extreme wealth would increase the overall progressivity of the tax system and slow down wealth concentration. It is also a necessary measure to avoid the generalisation of plutocracies and the destruction of checks and balances inherent to democratic societies. A coordinated EU-wide extreme wealth tax would close loopholes that the ultra-rich exploit by shifting income and assets across Member States to avoid their fiscal responsibilities, ensuring more consistent enforcement. Estimates, mentioned by the European Commission in its annual taxation report, indicate that a yearly wealth tax of up to 5% on Europe's multimillionaires and billionaires could bring €286.5 billion annually.
We encourage you to support the introduction of a pan-European tax on extreme wealth and, pending an agreement at the EU level, the introduction of net wealth taxes at the national level. We also urge you to support ongoing efforts to develop international standards to tax extreme wealth at the global level, for example by supporting a commitment to tax the super-rich at the upcoming Financing for Development Conference in Seville and the taxation of high-net-worth individuals under the new UN Framework Convention on International Tax Cooperation.
Fossil fuel profit contribution. Fossil fuel companies have made record profits in recent years and are among the most responsible for pollution and climate change, which generate exponential costs and risks for public budgets. In the 12 months leading to July 2023, the 14 largest fossil fuel companies earned a combined US$278 billion in net profits, an increase of 278% compared to the previous period.
A tax on the profits of fossil fuel companies could address market distortions and incentivise investments in the green transition. The EU solidarity contribution on energy companies demonstrated that taxing windfall profits is possible. The collected proceeds for both fiscal years 2022 and 2023 of the EU solidarity contribution and equivalent national measures amounted to more than €26 billion.
Building on this precedent, we call for a more ambitious tax on fossil fuel companies’ profits, which are a major obstacle to shifting private finance towards renewable energy and decarbonisation. For example, a permanent global polluter profit tax in this sector could have raised up to US$400 billion in 2024. Alternatively, a top-up tax on corporate tax, applied to fossil fuel companies, could also be explored.
We urge you to call on the European Commission to propose a tax on fossil fuel industry profits. This should include an assessment of expected return, and accompanying measures to ensure the costs are not passed on to households.
A levy on aviation. The aviation sector as a whole accounts for approximately 11% of CO2 emissions from transport and has been one of the fastest-growing greenhouse gas emitting sectors. Non-CO2 impacts are also considerable. Yet jet fuel remains largely untaxed due to a tax exemption on kerosene which dates back to 1944.
Two proposals could address this: taxing kerosene and applying a levy on ticket sales. A kerosene tax of €0,33/l at the European level through the Energy Taxation Directive, could generate nearly €27 billion annually. For non-EU flights, this would require renegotiating tax exemption clauses in the Chicago Convention or bilateral agreements, while intra-EU and domestic flights could be taxed immediately. According to a leaked European Commission report, such a tax would have no net impact on employment or the overall economy. However, we recommend more socially acceptable options (as opposed to a flat tax) such as a levy only on business- and first-class flights, or a frequent flyer levy. According to the European network Stay Grounded, a frequent flyer levy could raise an extra €63,6 billion annually.
A financial sector taxation. The idea of a Financial Transaction Tax (FTT) is gaining international traction as a means to combat global challenges and is among the options considered by the European Commission for raising new own resources.
Estimates of the revenue raising potential of a Union-wide FTT vary depending on the tax design proposed. Such a tax could for example represent an additional resource of between €17 and €43 billion a year for the European Union.