This is lesson 29 of the second module of the EUPress Teacher Training, which covers the macro topic ‘The EU’s Common Response to Covid-19’.
In this lesson you will find general information about the revenue side of NextGenEU.
While much has been said about the spending priorities of the EU’s NextGenerationEU programme, less attention is usually given to how the ambitious plan is actually financed. This lesson from the EUPress project delves into that often-overlooked dimension: the revenue side of Europe’s recovery strategy.
The lecture opens by clarifying that NextGenerationEU is financed through the EU’s standard budget, which was expanded from 1.2% to 2% of the EU’s GDP to accommodate both the Multiannual Financial Framework (around €1.1 trillion) and the €800 billion allocated to recovery measures. Since most EU revenues currently come from national contributions, this setup raises the long-standing issue of “own resources” — funds genuinely belonging to the Union rather than collected indirectly from member states.
The speaker highlights a structural weakness: when member states provide the resources and then receive them back through EU programmes, the stimulus effect can be limited. Moreover, such imbalances feed anti-EU narratives, especially in net contributor countries that perceive themselves as giving more than they gain.
To address this, the European Council’s July 2020 agreement paved the way for new, autonomous sources of EU revenue, reducing reliance on national transfers. Among the proposed instruments:
- A plastic levy on non-recycled materials (already in place);
- A financial transaction tax, still under negotiation;
- Mechanisms linked to the Carbon Border Adjustment and the Emission Trading System, ensuring that imports from countries with lower environmental standards contribute fairly;
- A minimum corporate tax, which faced initial vetoes from Poland and Hungary but remains on the agenda.
Other minor proposals have explored EU-wide taxes on activities considered “public bets” — such as gambling, alcohol, or tobacco — as symbolic but shared revenue streams.
A second major pillar of financing comes from EU borrowing on capital markets. The Union has started issuing up to €250 billion in green bonds, representing roughly 30% of the NextGenerationEU envelope. This initiative positions the EU as the world’s leading issuer of green bonds, enhancing the euro’s credibility as an international safe asset, though still far from matching the global dominance of dollar-denominated debt.
The lecture concludes by outlining the governance framework of the Recovery and Resilience Facility. The European Commission’s Recovery and Resilience Task Force (RECOVER), operating under the Secretariat-General, oversees implementation and ensures coherence with the European Semester process. Through this mechanism, the EU can monitor reforms, milestones, and investment targets across member states, linking financial support to measurable progress.
Ultimately, the “revenue side” of NextGenerationEU is not just a technical question of funding sources — it is a political step toward deeper fiscal integration, testing the Union’s capacity to act collectively and sustainably in shaping its economic future.
