Report from the Commission. Financing the European Union. Commission report on the operation of the own resources system.

Abstract

Article 9 of the current own resources decision1 calls on the Commission to"undertake, before 1 January 2006, a general review of the own resources system, accompanied, if necessary, by appropriate proposals, in the light of all relevant factors, including the effects of enlargement on the financing of the budget, the possibility of modifying the structure of the own resources by creating new autonomous own resources and the correction of budgetary imbalances granted to the United Kingdom as well as the granting to Austria, Germany, the Netherlands and Sweden of the reduction pursuant to Article 5(1)”.In response to a request from the European Parliament and in agreement with the Council, the Commission committed itself to present the abovementioned review on the functioning of the financing system before the end of 2004.On 10 February 2004 the Commission adopted its communication2 on the Financial Perspective 2007-2013. The communication identified two main elements of the current own resources system deserving closer attention: first, the insufficient transparency of the system for EU citizens combined with limited financial autonomy from national treasuries; secondly, the need to reform the existing mechanism for correction of negative budgetary imbalances.In line with those orientations, this report provides an overview of the current system and its main drawbacks, proposes a generalised correction mechanism as a short term adjustment in order to address the main outstanding issue and outlines for the longer term an own resources structure that would be effective, transparent and democratic.A more detailed assessment of these issues can be found in the Commission working document annexed to this report.