Changes in the system of own resources of the EU budget after 2021: Implications for Poland

Abstract

Since 2021 a number of changes in the EU financing system have taken place. They result mainly from two factors: 1) the adoption of a new multiannual budget (Multiannual Financial Framework – MFF) for the years 2021–2027 and related modification of resources financing this budget; 2) agreement of EU Members on the New Generation EU (NGEU) instrument aimed at combating the effects of the recession, following the COVID-19 pandemic. The aim of the paper is to assess possible consequences of these developments for the amount and structure of Polish contributions to the EU budget in 2021–2027. As regards new own resources of the budget, proposals and decisions presented in EU documents and new laws are discussed, their pros and cons and possible changes in Poland’s cost of financing Poland’s contributions to the EU budget. The chapter on the NGEU addresses the ways of funding of the huge recovery programme and their impact on Poland’s contribution to the EU budget. Because of the limited volume of the article, implications of the United Kingdom’s exit from the EU are omitted in the analysis. The general conclusion is that since 2021 the net cost of financing the EU budget by Poland resulting from changes in the own resources of the EU budget has increased slightly, at around EUR 300 million (2019 prices, without financial effects of Brexit). It is the equivalent of 2% of Poland’s contribution to the EU budget in 2019. This increase is a net effect of two opposing tendencies: a. elimination of the cost of financing VAT rebates for several EU Members and changes in traditional own resources, and b. the implementation of a plastic levy and the necessity to finance new rebates offered as of 2021 to several rich countries. NGEU implications for financing the EU budget (repayment of the debt) will appear mostly after 2027 when the repayment starts and more money is needed.