Europe faces a multiplicity of problems, which require an increasing use of resources. But the size of the European budget is totally inadequate to deal with these, and also to counter the devastating effects of the health emergency. The financing of the economic recovery can only be ensured, by not only the interventions of the ECB, but also by issuing bonds, which must be guaranteed by the European budget, and not by individual Member States. In consequence, there is an urgent need to identify new sources of revenue that can support increased spending by the Union. As well as being the most efficient instrument for combating global warming, setting a carbon price is also the most appropriate fiscal instrument for providing new resources to the budget and launching, through the use of the carbon dividend, a tax reform that shifts the burden of taxation away from labour to the consumption of natural resources, and represents a first step towards promoting the Union's fiscal autonomy.
Keywords: carbon pricing, European budget, fiscal federalism, Multiannual Financial Framework, own resources.
Alberto Majocchi is Emeritus Professor of Public Finance, University of Pavia, and Vice-President of the Centro Studi sul Federalismo, Turin