Assessing the Status Quo

This section is devoted to an analysis of the status quo of the EU system of own resources within the context of the overall budgetary system of the EU. Such a status quo analysis is indispensable for defining priorities for reform. In order to do justice to the current own resources system, it is necessary to look at it within its overall context. Many characteristics of the revenue side are hard to understand by themselves because they reflect adjustments deemed necessary with respect, for example, to spending side developments. Furthermore, it is essential to understand how the current own resources system, its instruments and definitions interact with the other budgetary institutions in the overall institutional context. Finally, it is important to develop an understanding of how the relevant players in EU budgetary policy may react to the incentives set by the design of the own resources system. This broad analytical perspective explains the section’s structure. Before looking at the details of the own resources system and the single items, we start by summarising key institutional features of the system and identifying incentives of major players within that system. Furthermore, we briefly look into its historical evolution and analyse the extent and sources of redistribution arising before proceeding to the details of the own resources system. These analytical elements allow us to draw comprehensive conclusions about the strong and weak features of the system.