Although most of the debate on reform of the EU budget has centred on how EU money should be spent, it is important to recall that the mandate for the seemingly interminable 2008/9 (sic) review also called for a fresh look at ‘resources, including the UK rebate’. For many commentators, the financing of the budget is seen as a matter of second or third order of importance compared with the highly contentious issues around EU spending. Yet it is an issue that can be just as fraught when it comes to the negotiations, not least because the accounting conventions mean that the vexed question of ‘corrections’ (the UK rebate and most of the other devices used to lower the net contributions of certain Member States) is deemed to be on the revenue side. An imaginative outcome to the budget review would see a willingness to countenance new forms of revenue instrument for the EU that would enable citizens more easily to see how the budget is funded, and the elimination of the anomaly of corrections within a few years. Yet the fear must be that EU leaders will shy away from bold decisions on funding the budget. This paper argues that there are credible options and good reasons to be more ambitious.

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Iain Begg is a Professorial Research Fellow at the European Institute, London School of Economics and Political Science.