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The EU Own Resources

Article 311 TFEU stipulates that the EU budget should be financed wholly with own EU resources. These resources can be defined as revenue streams directly assigned to the EU without the need for any additional decision from the Member States. In practice however, the major part of EU revenues consists of contributions by the Member States.

Presently the EU revenue consists of the following categories (the percentages and the image are taken from the Financial report 2012, p. 35) :

  • the traditional own resources (TOR) – 11,8% of the EU resources;
  • a resource based on Value Added Tax (VAT) also called the VAT own resource (but which, according to some is not a real “own resource” in the proper sense) – 10,7%;
  • a resource derived from the Gross National Income of each Member State (GNI) – 70,3%;
  • other revenue and surplus from previous year – 7,3%.
The EU Own Resources

© European Union, 2013. From the publication EU budget 2012 Financial Report

The basic rules on the system of own resources are laid down in a Council decision adopted by unanimity in the Council and ratified by all Member States. For the time being Council decision 2007/436/EC is still in force, but a proposal for a new Council Decision lays on the table which would, if adopted, have retroactive effect from 1 January 2014.

The own resources system is known to be unfair (the reason for which correction mechanisms were introduced), non-transparent and very complex. In their recent Draft report on negotiations on the MFF 2014-2020: lessons to be learned and the way forward the Co-rapporteurs Jean-Luc Dehaene and Ivailo Kalfin advocate “an in-depth reform of the financing of the EU budget that should return to a system of genuine, clear, simple and fair own resources”. They insist that this should entail the introduction of new own resources that would reduce the share of GNI-based contributions. It was at the insistence of the European parliament that, in the context of the negotiations on the multiannual financial framework, a high-level group was set up with the mission to thoroughly examine the reform of the system of own resources.

This navigator offers a selection of information sources which can be useful studying the issue of the own resources more in depth.

See also the following EPRS products:

EU Legislation

Legislation in force

Article 311 of the Treaty on the Functioning of the European Union lays the foundation of the financing system of the EU budget:

The EU Own Resources

© Vik_y / Fotolia

“The Union shall provide itself with the means necessary to attain its objectives and carry through its policies.

Without prejudice to other revenue, the budget shall be financed wholly from own resources.

The Council, acting in accordance with a special legislative procedure, shall unanimously and after consulting the European Parliament adopt a decision laying down the provisions relating to the system of own resources of the Union. In this context it may establish new categories of own resources or abolish an existing category. That decision shall not enter into force until it is approved by the Member States in accordance with their respective constitutional requirements.

The Council, acting by means of regulations in accordance with a special legislative procedure, shall lay down implementing measures for the Union’s own resources system in so far as this is provided for in the decision adopted on the basis of the third paragraph. The Council shall act after obtaining the consent of the European Parliament.”

A good overview of the further legislation which is applicable to the own resources can be found on the website of the European Commission “Financial programming and budget”, section on the Financing System – Own resources.

Further legislation that may be of interest:

Council Decision of 22 January 2013 authorising enhanced cooperation in the area of financial transaction tax, 2013/52/EU

Legislation in preparation

The following legislative procedures are of importance:

  • 2011/0183 (CNS) – System of own resources of the EU
    • Link in OEIL (database of the European Parliament on the activities of the institutions)
    • Link in EUR-Lex (database of the European Commission on the decision-making process between institutions)
  • 2011/0184(APP) – System of own resources of the EU: implementing measures –
  • 2011/0185(CNS) – Methods and procedure for making available the traditional and GNI-bases own resources and measures to meet cash requirements. Recast.
  • 2011/0333(CNS) – Methods and procedure for making available the own resource based on the value added tax
  • 2011/0334(CNS) – Methods and procedure for making available the own resource based on the financial transaction tax

EU Institutions

European Parliament

Selection of documents
  • Draft report on negotiations on the MFF 2014-2020: lessons to be learned and the way forward – 16/01/2014 – 2014/2005(INI). This report was adopted by the European Parliament in its plenary session from 14 to 17 April 2014 (see P7_TA-PROV(2014)0378 starting at page 395). 
    “8. Is convinced, moreover, that tangible progress can only be achieved following an in-depth reform of the financing of the EU budget that should return to a system of genuine, clear, simple and fair own resources; stresses that this should lead to the introduction of one or several new own resources that will considerably reduce the share of GNI-based contributions to the EU budget and, accordingly, the burden on national treasuries; reiterates its strong commitment to any process leading to the reform of the current unfair, non-transparent and complex system of own resources;”
    “24. Strongly believes that the High Level Group on Own Resources represents a unique opportunity to overcome the deadlock that has arisen over the reform of the current ownresources system; expects that it will contribute significantly to understanding the shortcomings of the current system and the benefits that can derive from an in-depth, comprehensive reform and the introduction of new and genuine own resources which can significantly reduce the share of GNI contributions to the EU budget;”
  • Resolution on the multiannual financial framework and own resources – 13/06/2012 – 2012/2678(RSP)
    “3. Insists that the EU budget should show an appropriate balance between revenue from genuine own resources and expenditure as required by the Treaty; states that it is not prepared to give its consent to the next MFF regulation without political agreement on reform of the own-resources system, putting an end to existing rebates and other correction mechanisms and leading to more transparency, fairness and sustainability; welcomes the legislative proposals made by the Commission on 29 June 2011 on the reform of the own-resources system, including the proposals on a financial transaction tax (FTT) and a new EU VAT as own resources, which are aimed at reducing the share of Member States’ GNI-based contributions to the EU budget to 40 % by 2020”
  • Resolution on the future of the European Union’s own resources – 29/03/2007 – 2006/2205(INI)
Parliamentary Questions
EP Studies
EP Press service:

European Council

European Council 7/8 February 2013 – Conclusions on the Multiannual Financial Framework.
See more in particular part II: Revenue.

Council of the EU

The statements forming part of the political agreement reached on the MFF (15997/13 ADD 1) as adopted by the Council at its meeting of 2/12/2013.
Extract: “To this end, a high-level Group will be convened, composed of members appointed by the three institutions. It will take into account all existing or forthcoming input which may be brought by the three European institutions and by National Parliaments.”

Website of the Council – Public register
Selection of other material:

European Commission

For the legislative proposals see above “Legislation in preparation”.

Q&A: the EU’s high-level group on own resources / MEMO/14/130 of 25/02/2014

Staff working paper
Internet website of the Commission – section Financial Programming and Budget
Press Service:

Court of Auditors

Further reading: Think tanks, articles, working papers…

Academic articles, working documents etc.:

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