Council Decision (EU, Euratom) 2020/2053 on the system of own resources of the European Union

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Series Details L 424, Pages 1-10
Publication Date 15/12/2020
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Decision (EU, Euratom) 2020/2053 - adopted by the Council of the European Union on 14 December 2020 - laying down rules on the allocation of Own Resources to the European Union (EU). It is also known as the ORD Decision. It repeals Decision 2014/335/EU, Euratom.

Further information:

The EU's own resources are the main sources of revenue for the EU Budget.

This Decision raises the maximum amount of resources that can be called from Member States in any given year to finance EU expenditure (the own-resources ceiling) from 1.20% to 1.40% of the sum of the EU27 GNI. This reflects the integration of the European Development Fund (EDF) into the EU Budget and addresses the withdrawal of the United Kingdom (UK) from the EU. The Decision also authorises the European Commission to borrow up to €750 billion (2018 prices) on the capital markets, in the framework of the EU Recovery Instrument (also known as NextGenerationEU - NGEU). The own-resources ceiling is also temporarily increased by a further 0.6% to cover liabilities of the EU resulting from this borrowing.

The original proposal for this Decision was tabled by the European Commission on 2 May 2018 in the context of the legislative package for the Multiannual Financial Framework (MFF) 2021-2027. As a result of the COVID-19 (coronavirus) pandemic, the Commission adopted its Europe's Recovery Plan, which included a revamped legislative package for the MFF 2021-2027 and the temporary EU Recovery Instrument. As a result, the proposed ORD Decision was also amended to address the investment needs foreseen in the recovery strategy.

The amended Decision was tabled by the European Commission on 27 May 2020. A political agreement on the terms of the Recovery Plan was reached at a European Council meeting in July 2020. The European Parliament threatened not to endorse the agreed terms for the MFF 2021-2027 unless there was an overhaul of the own resources system. Its plenary adopted a legislative opinion on the proposed ORD Decision on 16 September 2020. Negotiations between the co-legislators on the MFF were successfully concluded on 10 November, which included the incorporation of a roadmap for new own resources. The Council of the European Union adopted the proposed ORD Decision on 14 December 2020. The Act was published in the Official Journal on 15 December 2020.

The Own Resources Decision needs to be ratified by all Member States before it can enter into force. In late March 2021, Germany's Constitutional Court instructed the country's President not to ratify the Decision, following a constitutional complaint against German participation in the EU Recovery Instrument. This bid was eventually declined the Court on 21 April, clearing the way for the national ratification of this Decision. Media outlets later reported on potential difficulties with Finland's ratification process.

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Commentary and Analysis
EPRS: Briefing, February 2021: Own resources of the European Union: Reforming the EU's financing system
Euronews, 30/03/2021: The German Constitutional Court has blocked the EU's recovery fund. What happens now?
Euro|topics, March 2021: Europe flabbergasted after top German court halts recovery fund
Carnegie Europe: Strategic Europe, 01/04/2021: Judy Asks: Will the EU Recovery Fund Happen?
European Policy Centre: Commentary, 07/04/2021: Why the German Constitutional Court will (probably) not kill the €750 bn EU recovery fund
EU Law Analysis, 14/04/2021: The Own Resources Decision as an Ultra Vires Act or a Violation of Constitutional Identity? An analysis of possible procedural scenarios
European Law Blog, 14/04/2021: Corona Reconstruction Fund stopped for the time being
FIPRA: FIPRA Network, 27/04/2021: Finnish lawmakers decide on a two-third majority to pass the EU stimulus fund
Verfassungsblog, 27/04/2021: A Relieving Decision: The Interim Decision of the German Federal Constitutional Court in the Procedure against the 2020 Own Resources Decision
The Conversation (UK), 16/05/2021: Why the European recovery plan funds have not yet been released
EPRS: Briefing, May 2021: National ratification of the Own Resources Decision: State of play on 20 May 2021

EurActiv, 18/06/2020: No consent to ‘historic’ recovery plan without new revenues, MEPs warn
Reuters, 16/09/2020: European Parliament votes for new taxes in EU to repay recovery borrowing
Kathimerini, 12/02/2021: EU eyes spending first recovery funds before the end of summer
Reuters, 26/03/2021: German constitutional court stops ratification of EU recovery fund
Deutsche Welle, 26/03/2021: Germany's top court suspends ratification of EU recovery fund
Politico, 26/03/2021: Constitutional complaint against EU recovery fund filed in Germany
Times of Malta, 29/03/2021: EU sees fast fix to German court setback on €750 billion virus fund
Kathimerini, 30/03/2021: EU rescue funds agreement compatible with EU treaties, ECB’s de Cos says
The Local (France), 02/04/2021: France takes aim at Germany and other EU states for not ratifying Covid fund
Euronews, 14/04/2021: 'Time is of the essence': EU budget chief urges countries to ratify recovery fund
EurActiv, 16/04/2021: Approving EU recovery package in Finland proves more difficult than expected
Politico, 21/04/2021: German court rejects bid to block EU recovery fund
Deutsche Welle, 21/04/2021: Top German court tosses objection to EU coronavirus recovery fund
YLE News, 27/04/2021: EU stimulus faces new obstacle in Finland with super majority required
Helsinki Times, 29/04/2021: Possibility of Finland rejecting EU’s recovery plan met with calm
YLE News, 01/05/2021: EU leaders show concern over Finland's vote on stimulus package
Reuters, 10/05/2021: Finland set to pass EU recovery plan as opposition party backs government
Reuters, 18/05/2021: Finnish parliament backs EU recovery plan

EUR-LEX: Glossary of Summaries: Own Resources
European Commission: MFF 2021-2027: Own resources
European Parliament: Factsheets: The Union's Revenue
EUR-LEX: COM(2018)325: Proposal for a Council Decision on the system of Own Resources of the European Union
EUR-LEX: SWD(2018)172: Staff Working Document accompanying the Proposal - Financing the EU budget: report on the operation of the own resources system
EUR-LEX: COM(2020)445: Amended Proposal for a Council Decision on the system of Own Resources of the European Union
European Parliament: Legislative Observatory: Procedure File for Proposal on System of own resources of the European Union (2018/0135(CNS))
European Parliament: Legislative Train Schedule: Legislative Package for the System of Own Resources of the European Union after 2020
Council of the European Union: Press Release, 14/12/2020: Next multiannual financial framework and recovery package: Council moves to finalise adoption
EPP Group: Newsroom, 22/02/2021: National parliaments need to ratify financing of Recovery Fund
German Federal Constitutional Court: Press Release No 29/2021, 21/04/2021: Unsuccessful application for preliminary injunction against promulgation of the domestic act ratifying the EU Own Resources Decision (‘EU Recovery Package’)
Finnish Parliament: Press Release, 18/05/2021: Parliament has approved EU's own resources decision by a vote of 134-57

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