Budget showdown in Brussels: Determining the victors and the vanquished
The European Commission has presented a long-term budget proposal, initiating negotiations on funding allocation and sources. One of the key aspects of this proposal is the increase in taxes on tobacco, alcohol, and sugary drinks. This move aligns with the World Health Organization's (WHO) recommendation to raise prices of these products by at least 50% over the next decade, with the aim of reducing consumption and improving public health.
Rationale Behind the Proposal
The proposal is grounded in strong public health arguments. Tobacco taxation, for instance, has already demonstrated its effectiveness in the EU, contributing to a 40% decline in smoking rates and causing significant mortality (700,000 deaths annually in the EU). The Commission additionally proposes a new Tobacco Excise Duty Own Resource (TEDOR), a 15% uniform tax on manufactured tobacco products consumed in the EU, expected to yield about €11.2 billion annually.
Potential Impacts
If implemented, the taxes are expected to lead to significant reductions in consumption of tobacco, alcoholic beverages, and sugary drinks, resulting in improved public health outcomes such as lower rates of smoking-related diseases, alcohol-related harms, and obesity-related conditions. The revenues generated could support EU priorities, although the exact allocation remains unclear.
Fast Fashion Under Scrutiny
Meanwhile, the fast fashion industry operating in Europe has come under scrutiny due to its questionable commercial practices. The French government has fined Chinese ultra-fast fashion giant SHEIN €40 million for deceptive commercial practices, marking a major escalation in Europe's scrutiny of the fast fashion model. This is not the first time Shein has been under scrutiny; it has already been found guilty of illegal commercial practices.
Implications for Public Health
Reducing consumption of harmful products through price increases is considered one of the most effective prevention tools, with proven success for tobacco. The WHO initiative aims to extend this approach to alcohol and sugary drinks for the first time, emphasizing the role of fiscal policy in chronic disease prevention. Overall, the measures could contribute to decreasing the burden of non-communicable diseases, lowering healthcare costs, and improving population health across the EU.
Budget Negotiations
In addition to the health-related proposals, the European budget negotiations involve crucial areas such as technology, agriculture, and climate action. The exact outcome of these negotiations remains to be seen, but the proposed fiscal measures by the WHO and the European Commission have raised questions about whether public health can be improved through such means.
[1] European Commission. (2021). Proposal for a Council Decision on the position to be adopted on behalf of the European Union in the context of the Council's work on the revision of the Financial Regulation.
[2] World Health Organization. (2010). WHO Framework Convention on Tobacco Control.
[3] European Commission. (2019). Report on the implementation of the WHO Framework Convention on Tobacco Control in the European Union.
[4] World Health Organization. (2016). WHO global action plan for the prevention and control of non-communicable diseases 2013-2020.
[5] HM Revenue & Customs. (2018). Sugar tax: the soft drinks industry levy.
- The European Commission's long-term budget proposal, with an emphasis on environmental-science focused aspects like tobacco taxation, aligns with the recommendations of both finance and business sectors, particularly in regards to raising prices of harmful products to improve health-and-wellness outcomes.
- The proposed budget negotiations are extending beyond health-related matters, encompassing environmental-science, technology, agriculture, and climate action, creating a multidimensional landscape for future business and political discussions.
- The implementation of the World Health Organization's fiscal policy initiatives, such as the increase in taxes on tobacco, alcohol, and sugary drinks, as well as the inspection of industries like fast fashion for deceptive commercial practices, could have profound effects on general-news topics such as environmental-science, public health, finance, business, and politics.
