WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

As the European Union (EU) prepares its 2028–2034 budget, growing financing needs linked to the green and digital transitions, defence, competitiveness, and the repayment of NextGenerationEU debt have intensified debates over the future of EU financing. This study examines options for new EU own resources to support the financing of an expanded EU budget. The debate over EU revenues extends beyond technical budgetary considerations and is closely linked to broader questions concerning the future of European integration. Greater reliance on national contributions risks reinforcing distributive conflicts and public perceptions of the EU through national net balances, potentially weakening support for collective European action. The paper evaluates the European Commission’s proposed own resources alongside alternative revenue instruments, including financial transaction taxes, digital and corporate taxes, bank levies, aviation taxes, and taxes on ultra-high-net-worth individuals. Using criteria such as European added value, distributional effects, revenue potential, and the capacity to address negative externalities, the analysis finds that several alternatives could simultaneously strengthen EU revenues and tackle challenges such as tax avoidance, financial instability, climate change, and inequality. Taxes on highly mobile tax bases appear particularly suitable for EU-level implementation, as coordinated approaches can reduce tax competition and cross-border avoidance. The study concludes that a broader and more autonomous system of EU own resources, potentially complemented by common EU borrowing for strategic investments, could enhance the Union’s fiscal capacity, support the provision of European public goods, and strengthen the EU’s ability to respond to mounting geopolitical and economic challenges.