The politics of the EU own resources system: country coalitions and obstacles to reform

Abstract

This thesis examines how country coalitions shape negotiations on the reform of the European Union’s (EU) system of own resources in the context of the 2028-2034 Multiannual Financial Framework (MFF) negotiations. More specifically, it focuses on the growing tension between the EU’s increasing financial needs following the Covid-19 pandemic, the war in Ukraine and rising demands for defence, competitiveness and climate-related investment, and the political difficulties surrounding the financing of these priorities. Particular attention is given to how Member States position themselves regarding budget size, new own resources, burden-sharing and rule-of-law conditionality. While many Member States support a larger and more ambitious EU budget, there is currently no consensus on how this budget should be financed. The thesis challenges the predominantly functional narrative that growing financial needs will naturally lead to support for a larger EU budget and new own resources. Instead, the analysis demonstrates that negotiations are primarily shaped by coalition politics between Member States. Several distinct coalitions emerge from the negotiations. The classic Frugal coalition continues to oppose both budgetary expansion and new own resources, prioritising lower national contributions and correction mechanisms such as rebates. In contrast, a new coalition of Member States supports both a larger budget and the introduction of new own resources to finance expanding EU priorities. Furthermore, the Friends of Cohesion coalition supports increased spending but resists financing mechanisms perceived as regressive and disproportionately burdensome for less prosperous Member States. The findings demonstrate that debates over fairness have become increasingly central to negotiations on the own resources system. Many Member States argue that some proposed own resources risk shifting a greater financial burden onto less developed economies, thereby conflicting with the EU’s cohesion objectives. In addition, the thesis shows that rule-of-law conditionality remains politically divisive, although the previously influential Sovereignty coalition opposing such conditionality has weakened, particularly due to Poland’s shift toward supporting stronger rule-of-law mechanisms.