EU budget under threat - 14 countries side with Sweden on nicotine tax

The European Commission's record budget is at risk of collapse. There is strong opposition to plans to finance part of the budget through new nicotine and corporate taxes - with 14 member states siding with Sweden.

The European Commission's proposal for financing the organisation has resulted in the largest budget ever. However, despite repeated attempts to get support for its plan for 2028-2034, more than half of the member states seem to be saying no. This is mainly due to disagreements on the proposed nicotine and corporate taxes, Euroactiv magazine reports.

Swedish Finance Minister: "Unacceptable"

Several government representatives have also criticised the idea that the European Commission would in practice be given taxation rights - and thus economic power - in areas where local conditions differ greatly.

- "It is completely unacceptable that Sweden should be forced to levy taxes on smokeless nicotine products and then give the revenue to the EU," said Elisabeth Svantesson, Minister of Finance. when the Commission's plans became known.

14 countries put their foot down

Now it looks like 14 countries are on Sweden's side - at least on nicotine taxes.

According to Euractiv, the common denominator is opposition to the EU taking 15% of the revenue from nicotine sales, instead of the money staying in each country to deal with health-related costs. Taxes on cigarettes, but also smokeless nicotine such as vapes, e-liquids and nicotine pouches, would contribute around €11.6 billion to the EU's record €2 trillion budget.

Dispute over the principle: who should get the tax revenue?

Several countries, including Sweden, Italy, Greece and recently Portugal, have also pointed out that the Commission's proposal lacks a harm reduction perspective. According to the Commission, while the new taxes are intended to harmonise the market, they risk reducing the incentives for smokers to switch from cigarettes to less harmful alternatives such as nicotine pouches or e-cigarettes.

Harm minimisation versus harmonisation

The issue is politically charged in several countries, not least in Sweden where the use of smokeless nicotine in the form of snus, nicotine pouches and e-cigarettes dominates the nicotine market. At the same time, smoking rates are the lowest in the EU - only 5.7 per cent of Swedes smoke - something the government wants to highlight.

- "If two people take up snus instead of one starting to smoke, it is in practice a public health gain, and not the other way round. Pricing is a good way to promote such a development," said the MEP. Oliver Rosenqvist in the context of its 2024 proposal on to reduce taxes on snus and increase it significantly for cigarettes.

The Government has also decided that harm reduction should be part of nicotine policy.

The Commission's hard line

But here the European Commission is going in the opposite direction. According to the Commission's Dutch representative, Wopke Hoekstra, all nicotine products should be taxed in the same way. He belongs to the faction close to the WHO and the pharmaceutical industry, which believes that all nicotine use is harmful and should eventually be phased out in favour of drug-based alternatives.

The budget risks falling

Now it looks like that very line has become an obstacle to the whole budget. According to *Euractiv*, there is a significant risk that the proposal will have to be fundamentally reworked to gain sufficient support.