EU 'Tobin' tax could slash budget contributions: Barroso

(BRUSSELS) - Europen Commission president Jose Manuel Barroso on Thursday said a tax on the financial sector could slash by half the member states' contributions to the EU budget.

"According to preliminary estimates, a financial transactions tax could reduce member states' contributions to the European budget by around 50 percent," Barroso told the European Parliament.

The Commission is currently drafting the EU's 2014-2020 budget with a view to basing it on so-called "own resources", enabling the bloc's executive arm to raise its own funds rather than depend so heavily on funding from the EU member states.

It has called for the introduction of an EU sales tax and financial services tax as part of an overhaul of the next EU budget.

Budget commissioner Janusz Lewandowski said that two-thirds of a future tax on financial transactions could be used to fund the EU budget, with the remainder going to national budgets.

A state's financial transactions tax contribution would reduce its budget share to the same amount.

The Commission estimates that the tax could bring in 80 billion euros in 2020, of which two-thirds, or 54 billion euros, would fund the EU budget.

"These are very delicate talks," said Barroso. "We need courage to reform a system which is too complex and has seen its day."

Nine EU countries, including France and Germany, support the idea.