No representation without taxation, or how a European savings income tax could be the way out of financial deadlock

Summary: Failure to reach an agreement on the 2007-13 financial perspectives in the European Council of 16-17 June 2005 could plunge the Union into an acute financial and political crisis. How can this be avoided? First, by realising that a marginal reform of the present system is unlikely, unless its current inefficiency and unfairness increase, and thus merely postpones
the crisis (and, quite probably, at a heavy price); secondly, by framing the problem in terms that would not only render agreement easier, but would also contribute to enhance the efficiency and fairness of Europe's public finances. It is argued that this requires the explicit assignment of taxing powers to the Union matching the cost of the public goods and services to be provided by it. The political feasibility of such a structural change could be maximised if it is accompanied by the advocacy of a similar level of own resources in the hands of the Union, and if the tax assigned to the Union is a European savings income tax.