Own resources of the European Union: Reforming the EU's financing system
On 1 June 2021, the decision that reforms the financing system of the EU budget entered into force, following its ratification by all Member States. It introduces three significant innovations in the own resources system, applying retroactively from 1 January 2021. The maximum level of resources that can be called from Member States permanently rises from 1.20 % to 1.40 % of EU gross national income (GNI). A temporary increase in the own resources ceiling, worth a further 0.60 % of EU GNI, is devoted exclusively to the financing of Next Generation (NGEU), enabling the Commission to borrow resources on an unprecedented scale on the capital markets, with a view to financing the recovery. A national contribution linked to non-recycled plastic packaging waste is introduced, the first new EU own resource to be created since 1988. In addition, Parliament pushed for a broader reform of the financing system underlining that the introduction of a basket of new own resources should cover at least the repayment costs of NGEU (for both principal and interest). Parliament managed to include a detailed roadmap for the introduction of various additional new own resources by 2026 in the interinstitutional agreement on budgetary matters with the Council and the European Commission. Envisaged resources are linked to EU policies on climate and the single market. Fourth edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.
Briefing
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Policy area
Keyword
- budget
- budget policy
- budgetary procedure
- BUSINESS AND COMPETITION
- customs duties
- decision (EU)
- drafting of EU law
- EU finance
- EUROPEAN UNION
- European Union law
- FINANCE
- financial management
- general budget (EU)
- management
- multiannual financial framework
- own resources
- public finance and budget policy
- tariff policy
- taxation
- TRADE
- VAT