The system of own resources of the European Union: State of play and future prospects

1. Introduction

More than 50 years after their establishment, the European Union's own resources, having long received far less attention than other issues in scholarly debates, have recently become the focus of increasing reflection, criticism and reform proposals. ¹

As is well known, for many years, attempts to modify the system of own resources have been hampered by the difficulty of achieving unanimous agreement among the Member States within the Council, as required by the relevant Treaty provision. More recently, the pandemic crisis has given renewed impetus to the prospects for reform of the Union's financing mechanisms. It was in this context that the own resources decision currently in force was adopted, introducing, inter alia, a new own resource and regulating the conditions under which the Union may resort to borrowing instruments within the framework of the Next Generation EU. ² It was also in this context that the Union's political institutions delineated a ‘roadmap towards the introduction of new own resources’. ³ The implementation of that roadmap has, however, encountered significant difficulties and has so far failed to produce any concrete results adding to the measures provided for in the 2020 Own Resources Decision.

Having noted the failure of two proposals to amend the 2020 Own Resources Decision, submitted respectively in 2021 and 2023, the European Commission presented a proposal for a new own resources decision in July 2025, as part of the package of proposals put forward in preparation for the next Multiannual Financial Framework (2028–2034) (see section 4).

Against this background, this article aims to take stock of the EU system of own resources in the light of its historical development, its most recent evolution and the trends that may currently be identified for the future. Although the discussion on the next MFF has only just begun, it appears particularly timely to reflect on the current state of, and future prospects for, the Union's financing mechanisms and, more specifically, for its system of own resources. This is not only due to the relevance and sensitivity of the subject matter, which raises complex issues and touches upon delicate balances between the European Union and the Member States, but also to the need to begin designing mechanisms for the repayment of the substantial debt incurred by the Union, in particular in order to finance Next Generation EU. ⁴

To this end, after some brief remarks on the origins and evolution of the system of own resources (section 2), the article examines the main features of the current system of EU own resources (section 3). Section 4 focuses on the developments following the adoption of the 2020 Own Resources Decision and, in particular, on the proposal for a new own resources decision presented in July 2025 and its distinctive features. The analysis is subsequently broadened by offering some reflections on the role of own resources within the wider framework of the financing of the European Union, with particular attention paid to their relationship with the ‘other revenue’ referred to in Article 311, second paragraph, TFEU (section 5). Section 6 concludes.

2. Brief remarks on the origins of own resources

While the European Coal and Steel Community (ECSC) was characterized by financing arrangements that were entirely distinctive when compared with the contribution-based mechanisms generally envisaged for international organizations, ⁵ the European Economic Community (EEC) was not marked, at least initially, by an equally innovative financing system in terms of the organization's financial autonomy vis-à-vis its members. ⁶ Pursuant to Article 200 of the EEC Treaty, the financing of the Community was instead based entirely on financial contributions from the Member States, determined according to allocation criteria that could be amended by the Council acting unanimously. Nevertheless, Article 201 of the EEC Treaty entrusted the European Commission with the task of examining the conditions under which Member State financial contributions could be replaced by ‘own resources’. That provision further required the Commission to submit proposals to the Council, which, acting unanimously, could lay down the relevant arrangements and recommend their adoption by the Member States in accordance with their respective constitutional requirements. It was on this basis that, following the delicate political crisis known as the Empty Chair Crisis and complex negotiations among the Member States concerning various aspects of agricultural policy and Community revenue, the first Own Resources Decision, introducing the system of own resources, was adopted in 1970. ⁷

The 1970 Own Resources Decision provided for three new own resources, respectively based on: (i) customs duties; (ii) agricultural levies and other charges established within the framework of agricultural policy; and (iii) a residual own resource calculated having regard, albeit very indirectly, ⁸ to the Value Added Tax (VAT). It is commonly observed, however, that in practice only the first two of these resources, namely the so-called traditional own resources, ⁹ gave effect to an actual replacement of national contributions, whereas the third category of own resources was, and remains, essentially based on contributions from the Member States. ¹⁰

During the 1980s, the Union's financing system became the object of growing criticism and political claims, including the well-known debate initiated by the United Kingdom concerning the so-called rebate, which led to the introduction of a compensatory mechanism in favour of so-called net contributor Member States. ¹¹ Moreover, given the progressive reduction of the revenues resulting from the own resources system, the own resources decision adopted in 1988 introduced a new ‘fourth own resource’, ¹² based, at that time, on the Member States’ Gross National Product. ¹³ More specifically, the calculation of that own resource consisted in applying a rate – determined during the budgetary procedure in the light of total revenue from all other sources – to a base composed of the sum of the Member States’ GNPs. ¹⁴ Although in 1988 the ‘fourth own resource’ played a complementary and stabilizing role, accounting for 10.6% of total revenue, it subsequently became by far the most significant source of EU revenue.

3. The state of play: Main features of the current system of EU own resources

Since 1988, each revision of the Multiannual Financial Framework (MFF) has entailed the adoption of a new own resources decision. Notwithstanding the various decisions adopted, ¹⁵ until the developments of 2020 the essential features of the own resources system remained largely unchanged. ¹⁶ At the same time, as briefly foreshadowed above, from a quantitative perspective, the relative weight of the various categories of own resources changed profoundly. Traditional own resources, which had initially been predominant, accounted for only 13.58% of total EU revenue in 2025. ¹⁷ In the same year, the VAT-based resource accounted for 15.72% of total revenue and the GNI-based own resource for 63.50%, while the plastic-based own resource – introduced by the 2020 Own Resources Decision – accounted for 4.59%. ¹⁸

The trend summarized above can be described as a progressive ‘nationalization’ of EU own resources. ¹⁹ This configuration – which was not altered by the 2020 Own Resources Decision ²⁰ – results, first, in a reduction of the Union's financial autonomy, ²¹ if not necessarily in quantitative terms, certainly from a qualitative perspective. ²² More importantly, it fuels the well-known phenomenon of juste retour (‘fair return’), ²³ which stems from the possibility for each Member State to calculate its net balance vis-à-vis the Union by comparing the amounts paid into the EU budget, including through the collection of own resources, ²⁴ with the sums received from the supranational level under other headings. ²⁵ This leads Member States to perceive transfers to the EU budget as expenditures to be minimized, ²⁶ thereby rigidifying negotiations on own resources. ²⁷ For these reasons, juste retour is rightly regarded as one of the main causes of the difficulty in reforming the own resources system. ²⁸

The other major obstacle to any substantial change to the EU own resources is the procedure laid down for the adoption (as well as any amendment) of the own resources decision. As is well known, Article 311 TFEU provides that the adoption of such decision is entrusted to the Council, which, as specified in the third paragraph of Article 311 TFEU, acts in accordance with a special legislative procedure, unanimously and after consulting the European Parliament (the Union phase of the own resources procedure). The own resources decision, however, does not enter into force until it has been approved by the Member States in accordance with their respective constitutional requirements (the national phase of the procedure). The combination of the strict unanimity requirement and the complex approval procedures that must be completed in all the Member States are, without any doubt, a fundamentally critical aspect of the system of own resources. ²⁹ At the same time, it should be highlighted that Article 311, third paragraph, TFEU confines the European Parliament to a merely consultative role, notwithstanding the more significant powers that that institution enjoys in the adoption of the MFF.

Against this constraining framework laid down by the Treaties, the Union institutions – and in particular the European Commission and the European Parliament – have repeatedly sought in recent years to promote reforms of the own resources system, without the proposals put forward being effectively adopted. Among the many examples that may be cited are: the 2004 Commission Report on the operation of the own resources system; ³⁰ the 2007 European Parliament Report on the future of the European Union's own resources (also known as the ‘Lamassoure Report’, after its rapporteur, Alain Lamassoure); ³¹ the Commission proposal to introduce a Financial Transaction Tax (FTT), ³² whose revenue was intended to be used, for two thirds, as an own resource for the EU budget, ³³ but which never resulted in a definitive act despite recourse to the enhanced cooperation procedure; ³⁴ the well-known Final Report prepared by the High-Level Group on Own Resources chaired by Mario Monti (usually referred to as the Monti Report); ³⁵ and the Commission's Reflection Paper on the future of EU finances. ³⁶

In 2018, the Commission presented a package of proposals in view of the MFF 2021–2027, including a proposal for a Council Decision on the system of own resources of the EU, ³⁷ which, following certain amendments made by the Commission in May 2020 in light of the COVID-19 emergency, ³⁸ and upon completion of the procedure laid down in Article 311, third paragraph, TFEU, ³⁹ would ultimately become the 2020 Own Resources Decision currently in force.

The latter Decision was anticipated in several respects by the conclusions of the European Council meeting of 17–21 July 2020, which not only marked the achievement of the political agreement on NGEU, but also indicated that the Union would work over the following years ‘towards reforming the own resources system and introduce new own resources’, ⁴⁰ setting out in detail the envisaged next steps in that regard. Against this background, the 2020 Own Resources Decision, inter alia: raised the own resources ceiling to 1.40% of the GNI of all the Member States, ⁴¹ as compared to the previous ceiling set at 1.20%; ⁴² empowered the Commission to borrow funds on capital markets on behalf of the Union, clarifying that such power is to be used for the ‘sole purpose of addressing the consequences of the COVID-19 crisis’; ⁴³ increased the percentage of the amounts collected as traditional own resources (that is, customs duties) that Member States may retain, by way of collection costs, from 20% to 25% of the relevant amounts; ⁴⁴ confirmed the correction mechanism relating to the GNI-based resource in favour of certain Member States; ⁴⁵ and introduced a new own resource based on non-recycled plastic waste.

The latter consists in applying a uniform call rate (EUR 0.80 per kilogram) to the weight of plastic packaging waste generated in each Member State that is not recycled, ⁴⁶ with certain reductions provided for specific Member States. ⁴⁷

It should be observed that the own resource based on non-recycled plastic waste constitutes the first new own resource to be established since the so-called fourth resource introduced by the 1988 Own Resources Decision and therefore represents an undoubtedly significant step. However, the importance of that new own resource for the evolution of the system should not be overstated. First, from a quantitative perspective, it has a rather modest impact on Union revenue: as noted above, on the basis of the 2025 EU budget, it accounts for approximately 4.59% of total revenue. Secondly, from a qualitative standpoint, it is not a ‘genuine’ own resource, since – similarly to the VAT-based resource and the GNI-based resource – it consists of contributions from the Member States, calculated by reference to a specific parameter but not amounting to a genuine European tax. ⁴⁸ For this reason, it is not strictly correct to label it, as is sometimes done, a ‘Plastic Tax’.

Overall, although the 2020 Own Resources Decision introduced some noteworthy innovations – most notably, the establishment of a new own resource linked to the pursuit of Union policy objectives – it does not appear, in itself, to have produced a substantial modification of the overall configuration of the own resources system.

4. Towards a reform of EU own resources?

Immediately after the adoption of the 2020 Own Resources Decision, the European Parliament, the Council and the Commission concluded an Interinstitutional Agreement (IIA) on budgetary cooperation. ⁴⁹ While the entry into such an agreement reflects a practice also followed in relation to previous MFFs, the IIA concluded in 2020 contains an innovative element. At the request of the European Parliament, Annex II to the IIA includes an ambitious ‘roadmap towards the introduction of new own resources’, which goes even further than the (already far-reaching) European Council Conclusions of 15–21 July 2020, ⁵⁰ with the objective of introducing new own resources over the course of the MFF 2021–2027.

The Preamble to Annex II emphasizes, inter alia, the need to ensure that expenditure from the Union budget related to the repayment of the European Union Recovery Instrument – namely, the umbrella instrument under which the total amount constituting Next Generation EU is embedded ⁵¹ – does not lead to an undue reduction in programme expenditure or investment instruments under the MFF. ⁵² Moreover, it states that, in order to enhance the credibility and sustainability of the repayment plan, the Parliament, the Council and the Commission ‘will work towards introducing sufficient new own resources with a view to covering an amount corresponding to the expected expenditure related to the repayment.’ ⁵³ According to the same Preamble, such resources should be aligned with Union policy objectives ⁵⁴ and should preferably be created in a way that allows for the generation of ‘fresh money’, ⁵⁵ while fulfilling the criteria of simplicity, transparency, predictability and fairness. ⁵⁶

The operative provisions of Annex II to the IIA are divided into two parts. Part A sets out the principles governing the implementation of the roadmap, entrusting the Commission with the task of presenting the necessary legislative proposals for new own resources and defining specific guiding principles for the introduction of a basket of new own resources. ⁵⁷ Part B lays down the roadmap itself, structured around three phases, respectively envisaged for 2021, for 2022–2023 and for 2024–2026. As regards the first phase (2021), in addition to the introduction of the new own resource based on non-recycled plastic waste, the Commission was expected to put forward proposals to introduce new own resources based on a carbon border adjustment mechanism (CBAM) and on a digital levy. ⁵⁸ By June 2021, the Commission was also to propose an own resource based on the EU Emissions Trading System (ETS). ⁵⁹ In the second phase (2022–2023), the IIA envisaged an amendment of the 2020 Own Resources Decision, with the Council to deliberate on the new own resources by 1 July 2022 at the latest, with a view to their introduction by 1 January 2023. ⁶⁰ In the third phase (2024–2026), the Commission was expected to propose additional new own resources, ‘which could include a Financial Transaction Tax and a financial contribution linked to the corporate sector or a new common corporate tax base’, ⁶¹ with a view to their introduction by 1 January 2026. ⁶²

Despite the definition of this detailed roadmap, which largely reflected the points crystallized in the European Council conclusions of 15–21 July 2020, no amendments have so far been made to the 2020 Own Resources Decision and, consequently, no additional own resources have been introduced. ⁶³

The Commission prepared two proposals to amend the 2020 Own Resources Decision. In both cases, however, the special legislative procedure under Article 311, third paragraph, TFEU stalled due to the failure to reach unanimity within the Council. ⁶⁴ The first proposal, presented in December 2021, provided for the introduction of three new own resources: the first drawing on revenues arising from an extended ETS, the second based on the revenues collected through the CBAM and the third drawing on a 15% share of the residual profits of multinational companies to be allocated pursuant to Pillar One of the OECD/G20 agreement. ⁶⁵ In June 2023, the Commission submitted a new proposal amending the previous one, which, in addition to making technical adjustments to the ETS- and CBAM-based own resources, included a new statistical own resource based on company profits. ⁶⁶

More recently, in July 2025, the European Commission presented an entirely new proposal for a Council Decision on the system of own resources of the EU, ⁶⁷ as part of the package of proposals submitted in preparation for the next MFF 2028–2034. ⁶⁸ Unlike the two previous proposals presented in 2021 and 2023, the 2025 Proposal does not seek to amend the 2020 Own Resources Decision, but rather to repeal it, in view of the approaching new MFF cycle.

The explanatory memorandum accompanying the proposal acknowledges that the current own resources system is increasingly dependent on GNI-based contributions from the Member States and states that new own resources are necessary in order to ensure the sustainable funding of common EU policies and the repayment of Next Generation EU. ⁶⁹ The Commission also recalls the earlier proposals of 2021 and 2023, clarifying that the 2025 Proposal builds upon the previous initiatives and the discussions that followed them. ⁷⁰

The main features of the 2025 Proposal may be summarized as follows.

First, the Commission proposes the introduction of five new own resources, some of which are drawn from previous proposals, albeit with certain modifications, while others are entirely new. The first category includes the two own resources based respectively on the ETS ⁷¹ and on the CBAM, ⁷² both of which had already been envisaged in the 2021 and 2023 proposals. ⁷³ These are so-called environmental own resources, linked to regimes that have already been established or are in the process of being established under other legislative instruments – in particular, Directive 2003/87/EC ⁷⁴ and Regulation (EU) 2018/842 ⁷⁵ as regards the ETS, and Regulation (EU) 2023/956 ⁷⁶ as regards the CBAM – and which would be based on the allocation of a fixed percentage of the revenues generated under those regimes to the EU budget as own resources. The two resources are closely interconnected and rest on very similar premises. ⁷⁷ Indeed, the CBAM extends externally the carbon pricing discipline already applicable within the Union under the ETS, with a view to preventing distortions of competition and carbon leakage. Moreover, both resources pursue environmental objectives and are therefore closely linked to Union policy goals.

The 2025 Proposal further envisages three additional new own resources. The first would be based on the amount of electrical and electronic equipment not collected (‘e-waste’), following a logic similar to that underlying the own resource based on non-recycled plastic waste. It would rely on data already reported by the Member States to Eurostat and would be calculated by applying a rate of EUR 2 per kilogram to non-collected e-waste. ⁷⁸ According to the Commission, this own resource would lead to positive environmental outcomes and support the Union's strategic autonomy in critical raw materials. The proposal also includes a Tobacco Excise Duty Own Resource (TEDOR), which, in the words of the Commission, ‘would support EU health policy objectives as well as address the issue of cross-border shopping for certain products, which is currently influenced by differentials in tax policies between Member States, and generate significant revenue for the EU budget.’ ⁷⁹ This excise would consist of contributions paid by each Member State, calculated by multiplying the quantities of manufactured tobacco and tobacco-related products released for consumption in a given year by the minimum rate applicable to that Member State. ⁸⁰ Finally, the Commission proposes the introduction of a Corporate Resource for Europe (CORE), which would apply to EU companies and to companies from third countries with a permanent establishment in the EU and an annual net turnover exceeding EUR 100 million. This own resource would consist of an annual lump-sum contribution differentiated according to companies’ net turnover. ⁸¹ The 2025 Proposal specifies that this own resource ‘shall be due by each company’ ⁸² and would therefore result from a substantial levy imposed directly on companies, ⁸³ even though the Commission sought to avoid the logic of corporate taxation by refraining from any form of harmonization and instead framing the instrument – as already noted – as a lump-sum contribution to the EU budget.

In addition to the proposed new own resources, the 2025 Proposal includes targeted adjustments to existing own resources with the aim of preserving the revenue base of the EU budget. For example, the call rate for the own resource based on non-recycled plastic packaging waste would be increased from EUR 0.80 per kilogram to EUR 1 per kilogram in 2028 and, thereafter, adjusted annually to inflation. Moreover, the Commission proposes to reduce from 25% to 10% the percentage of the amounts that Member States may retain by way of collection costs from the sums collected as traditional own resources. ⁸⁴

The 2025 Proposal also provides for the elimination of certain adjustments to own resources that currently reduce the transparency of the system, including the capping of the VAT base, the lump-sum reductions applied to the own resource based on non-recycled plastic packaging waste and, most notably, the ‘corrections’ traditionally applied to the GNI-based resource. ⁸⁵ This latter element is particularly ambitious, given that such corrections have been applied for many years and that it is highly unlikely that the Member States benefiting from them will be willing to relinquish them. As a result, achieving unanimity in the Council on this point is likely to prove especially difficult.

Finally, the 2025 Proposal introduces a new extraordinary mechanism aimed at responding to ‘severe crises, severe hardship or serious threat thereof affecting the Union or its Member States’, over the period of the upcoming MFF 2028–2034. ⁸⁶ This extraordinary and targeted crisis response mechanism would entail exceptional borrowing for the purpose of granting loans to Member States. Its activation would be decided by the Council by means of a regulation adopted in accordance with the procedure laid down in Article 311, fourth paragraph, TFEU, unless Union programmes already adequately address the consequences of the situation. The proposal expressly provides that the own resources ceilings – set at 1.75% of the sum of all the Member States’ GNIs for own resources allocated to cover annual appropriations for payments, ⁸⁷ and at 1.81% of the same sum for the appropriations for commitments entered in the Union budget ⁸⁸ – would each be temporarily increased by 0.25 percentage points for the sole purpose of covering all liabilities of the Union resulting from the borrowing necessary to activate the instrument. This ‘horizontal’ extraordinary mechanism, embedded in the own resources framework, would, if adopted, represent an innovation compared with the current situation, although it should be noted that it would remain an exceptional instrument and that it constitutes the only form of Union borrowing expressly permitted under the 2025 Proposal. ⁸⁹

In general terms, although the 2025 Proposal sets out a broader range of new own resources than the previous proposals of 2021 and 2023 and introduces several additional innovations into the EU own resources system, it could arguably have been more ambitious. The overall amount of the proposed new resources is not particularly high ⁹⁰ and a number of potential own resources previously discussed have not been included in the proposal. ⁹¹ Moreover, certain proposed own resources may overlap with measures already in place at national level, such as excise duties on tobacco products, which is likely to raise issues during the procedure set out by Article 311 TFEU.

At present, discussions within the Council and the European Council on the MFF 2028–2034 and on the 2025 Proposal are still at an early stage. However, as regards own resources in particular, and in light of the negative outcome of the 2021 and 2023 proposals, it appears likely that reaching the political compromise required for the introduction of new own resources will not be straightforward – to say the least.

5. The ‘bigger picture’ of EU revenues and the future prospects of the own resources system

The complexity of the EU's so-called budgetary galaxy ⁹² and the evolution of the system of own resources examined in the preceding sections ultimately call for some broader reflections on the position of own resources within the wider framework of the Union's financing system.

To this end, it is first necessary to assess whether there are specific features that distinguish own resources from other forms of EU revenue. In this regard, it should be noted that defining the notion of own resources is particularly problematic. Since no explicit definition is provided at normative level – neither in the Treaties nor in the own resources decisions, ⁹³ – the concept remains an ambiguous one ⁹⁴ and has been described as ‘a bit of a misnomer’. ⁹⁵

From a historical perspective, the notion of own resources could originally be defined in opposition to national contributions, which, as noted in section 2, were meant to be replaced by own resources pursuant to Article 201 of the EEC Treaty. ⁹⁶ Today, however, it is undisputed that own resources also include national contributions, which in fact constitute by far the largest share of own resources. In light of the current Treaty framework and the existing system of Union financing, the notion of own resources is essentially contrasted with what Article 311 TFEU refers to as ‘other revenue’, particularly given that, as mentioned, own resources presently consist, to a very large extent, of financial contributions from the Member States. Yet, since the concept of ‘other revenue’ is itself undefined and operates as a residual category comprising, in principle, everything that does not fall within own resources, it becomes essential to identify the distinctive features of own resources.

The most widely accepted definition of own resources is one that emphasizes their character as revenues assigned once and for all to the European Union to finance its budget, to which the Union is entitled as of right, without requiring any subsequent decision by national public authorities. ⁹⁷ Moreover, it should be recalled that own resources must necessarily accrue to the EU budget as a whole and cannot be earmarked for specific Union policy areas.

Other revenue, by contrast, may be either assigned or non-assigned. While assigned other revenue, as provided for in Article 21 of the EU Financial Regulation, ⁹⁸ constitutes a derogation from the principle of universality governing the EU budget and ‘shall be used to finance specific items of expenditure’, non-assigned (or general) other revenue is not earmarked for specific expenditure but serves as a general source of financing for the EU budget, in much the same way as own resources. ⁹⁹ This distinction also has implications for own resources. Non-assigned other revenue, like own resources, is treated as general revenue and therefore reduces Member States’ contributions under the GNI-based own resource accordingly. As a result, ‘an increase in non-assigned other revenue does not increase budgetary space in the sense of enabling more EU spending.’ ¹⁰⁰ By contrast, an increase in assigned other revenue, which serves a revenue-raising purpose, enables additional EU spending above the agreed expenditure ceilings. ¹⁰¹

At the same time, the concept of ‘other revenue’ is itself difficult to delineate and, in practice, the distinction between other revenue and own resources is often blurred. One clear dividing line lies in the fact that own resources are established by an own resources decision adopted pursuant to Article 311, third paragraph, TFEU, whereas other revenue – although mentioned and thus framed by the same provision – is generally governed by other acts of secondary law, including the Financial Regulation, as well as by other types of acts that may be adopted on the basis of a variety of Treaty legal bases. This implies that the introduction of other revenue may, in principle, entail a more significant involvement of the European Parliament, and possibly escape the unanimity requirement – and the subsequent approval by the Member States in accordance with their respective constitutional requirements – where such requirements are not imposed by the relevant legal basis.

In light of the limitations characterizing the own resources system and the long-standing difficulties surrounding attempts to reform it, the question almost naturally arises as to whether alternative avenues may be available to ensure adequate revenue for the Union budget and, more specifically, whether innovative solutions might be envisaged through forms of other revenue rather than through own resources. This question has been raised, for instance, in the Monti Report, ¹⁰² as well as in the more recent study requested by the European Parliament's Committee on Budgets referred to above. ¹⁰³

The reluctance generally expressed with respect to this option is usually grounded in an argument based on the wording of Article 311 TFEU, which provides in its second paragraph that: ‘Without prejudice to other revenue, the budget shall be financed wholly from own resources.’ This provision has traditionally been interpreted as meaning that other revenue must necessarily constitute only a marginal share of total revenue. ¹⁰⁴ In reality, however, this interpretation has already been overtaken by developments associated with Next Generation EU, albeit as a result of the adoption of an exceptional instrument. Since the loans contracted by the Union to finance Next Generation EU fall within the category of other revenue, during the current MFF the share of other revenue has increased very significantly, rising from 11.7% of total EU revenue in 2019 to 39.8% in 2023. ¹⁰⁵

Another feature commonly associated with other revenue is its link to a specific Union policy area, albeit not in all cases. ¹⁰⁶ For a long time, this characteristic marked a clear distinction from own resources, with the partial exception of traditional own resources, whose relative importance has nevertheless declined substantially over time. This distinction, too, has been profoundly reshaped in recent years. The own resource based on non-recycled plastic waste introduced by the 2020 Own Resources Decision explicitly pursues a specific policy objective, namely environmental protection. The same holds true, as shown above, for several of the proposed new own resources included in the 2025 Proposal. Indeed, it has been argued that the plastic-based own resource differs, in this respect, even from traditional own resources. Unlike other own resources, which are primarily intended to finance the Union (and may therefore be described as fiscal own resources), the plastic-based own resource also pursues an additional objective through fiscal-type incentives and may thus be said to inaugurate a new category of own resources, sometimes described as political own resources, ¹⁰⁷ or ‘purposeful’ sources of EU financing. ¹⁰⁸ This ‘develops own resources into a distinct policy instrument beyond their function to fund the Union’ ¹⁰⁹ and, together with the increasingly frequent calls to reinterpret the EU budget as a tool to protect and promote so-called European public goods and/or European added value, calls for a careful assessment of the relevant political and institutional implications.

The growing complexity and increasingly articulated nature of the EU's financing system is further confirmed by the expanding use of common debt issuance mechanisms, ¹¹⁰ which have been deployed on several recent occasions, for example to provide support to Ukraine. ¹¹¹ These developments fuelled the debate on the emergence of a genuine fiscal capacity of the Union. ¹¹² Moreover, the conceptualization of sources of financing that are more or less comparable to revenues of a tax nature, together with Treaty provisions that expressly empower the Union to adopt, in specific fields, measures ‘primarily of fiscal nature’ ¹¹³ raise further questions concerning the Union's competences and the coherence of such developments with the existing architecture of the EU budget. ¹¹⁴

Against this background, the future of the EU system of own resources remains uncertain, although some elements appear to be clear. The increasing politicization of own resources and the possible introduction of genuine own resources – such as the proposed CORE – render even more problematic the marginal role assigned to the European Parliament under the procedure laid down in Article 311, third paragraph, TFEU. This problem is only partially mitigated by the involvement of national parliaments at the stage of approval in accordance with the constitutional requirements of the Member States, since it deprives the process leading to the adoption of the own resources decision of a truly EU-based democratic legitimacy and makes it more difficult to foster a genuinely European-wide debate on these issues.

At the present stage, the developments affecting various aspects of the Union's budget and its system of financing make the adoption of a ‘holistic approach’ ¹¹⁵ increasingly necessary, one that would allow for a comprehensive and coherent reform of the own resources system, the fiscal provisions and the rules governing Union borrowing. Such an approach could also lead to overcome the sharp separation between expenditure-related decisions and revenue-related decisions, which characterizes the EU budget as a whole: ¹¹⁶ as a result, a more comprehensive view of the budget and a clearer visibility and understanding of the usefulness of own resources for the financing of the Union would be possible. ¹¹⁷ In the same vein, a broader reform of the system could also address the extreme complexity and lack of transparency that characterize the own resources system, which currently makes it difficult – if not impossible – for European citizens to clearly identify the share of their taxes that contributes to financing the Union, as well as the corresponding benefits in terms of services provided. ¹¹⁸

6. Conclusion

The foregoing analysis has shown that the system of own resources occupies a central yet fragile position within the European Union. While formally enshrined as the cornerstone of the Union's budgetary financing, own resources have progressively lost their predominantly autonomous character, giving way to a system largely dominated by intergovernmental contributions and corrective mechanisms.

The response to the COVID-19 crisis revealed both the potential and the limits of the existing framework. On the one hand, the adoption of the 2020 Own Resources Decision and the creation of NGEU demonstrated that the Treaties are capable of accommodating far-reaching financial innovation. On the other hand, the exceptional and temporary nature of NGEU, and the overall limited improvements to the own resources system, underscored the absence of a stable and genuine fiscal capacity at Union level.

The achievement of a comprehensive reform of EU own resources has been described as ‘an almost impossible task’ ¹¹⁹ and, more generally, it has been authoritatively observed that discussions on own resources readily lend themselves to a certain degree of cynicism. ¹²⁰ At the same time, the ambitious roadmap set out in the conclusions of the European Council meeting of 17–21 July 2020, and reiterated in the 2020 IIA, confirms that new own resources are needed, together with a broader reform of the own resources system.

In light of the recent developments, the present moment may be characterized as a transitional phase. The proposal for a new own resources decision presented in July 2025 may be interpreted as a critical test of the Union's willingness to confront the structural deficiencies of its financing system. The inclusion of new policy-linked resources, particularly those based on climate instruments and corporate activity, however delicate and problematic, points towards a reconceptualization of own resources as a possible expression of Union-level policy choices rather than mere financial transfers.

Yet, as long as the procedural constraints of Article 311 TFEU remain unchanged, and unanimity in the Council continues to govern decisions on the Union's own resources, the prospects for a genuine transformation of the own resources system will remain uncertain. Addressing this tension may ultimately require not only new sources of revenue, but also a comprehensive reconsideration of the institutional balance underpinning the EU's budgetary architecture.