This paper first provides a short history of the European budget, focusing on the
development of the EU’s “own resources”. It then elaborates on the fundamental changes
to the financial system and the budgetary procedure that the Treaty of Lisbon introduced.
It is posited that with the amendments the budgetary process has lost clarity. Whilst the
multiannual framework may provide for long-term stability, it stands in contradiction to a
central principle of parliamentary democracy: annual budgets. The EU’s search for a fair
and transparent budgetary system has not yet come to full fruition. Europe needs a fairer
and more transparent system. Since the Luxembourg agreement of 1970, the Union has not
done anything with the VAT as own resources. The VAT is related to the welfare standards
and developments in the Member States. A fixed share of this indirect tax could form the
base of a long term financing plan for the general EU budget
