Mid-term review/revision of the Multiannual Financial Framework 2014-2020 [Policy podcast]

Written by Magdalena Sapała,

The EU’s Multiannual Financial Framework (MFF) lays down maximum annual levels of EU spending in different areas. The current MFF covers the period from 2014 to 2020, and is the EU’s fifth consecutive multiannual financial plan. This MFF is the first to take the form of a regulation, and the first to contain provisions providing for a mid-term review that may lead to its revision.

According to the regulation, the Commission should present a review of the functioning of the MFF no later than the end of 2016. The review should take into account the updated economic situation and macroeconomic projections. Moreover, since there is no synchronisation between the duration of the MFF and the Commission’s or European Parliament’s legislative terms, the review should allow a new Commission College and a newly-elected European Parliament to reassess the EU’s political priorities and endow the MFF with renewed democratic legitimacy. The review should, as appropriate, be followed by a proposal for revision of the MFF Regulation, which, however, should not result in a reduction of what is known as the national envelopes.

Listen to podcast: Mid-term review/revision of the Multiannual Financial Framework 2014-2020 [Policy podcast]

For a number of reasons, implementation of the 2014-2020 MFF has already proven to be challenging in its first two years. In order to accommodate unexpected needs within the authorised ceilings (especially caused by the migratory crisis), the budgetary authority has already had to resort to almost all the special levers and flexibility instruments provided for in the MFF Regulation. This raises questions about the functioning of the MFF through to 2020, and, in particular, about the adequacy of the agreed spending ceilings.

Therefore, there are reasons to expect a thorough mid-term review of the MFF 2014-2020 from the European Commission, with bold conclusions followed by a proposal for a revision of the regulation. The list of issues at stake includes both current problems requiring immediate action, and long-standing, contentious aspects of the MFF, such as the reform of the own resources system.

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The European Parliament has consistently supported the idea of an obligatory, genuine, post-electoral mid-term MFF review and, if necessary, a revision of the MFF Regulation. Parliament’s ambition is to be at the forefront of the debate, thus, the Committee on Budgets has been discussing the matter since December 2015, with a view to adopting a strategic, own-initiative report ahead of the Commission’s review and proposal for a revision. In April 2016, based on a thorough analysis of the functioning of the MFF, the co-rapporteurs, Jan Olbrycht (EPP, Poland) and Isabelle Thomas (S&D, France) presented a draft report that confirms that the revision of the MFF, including the figures, is indispensable. The report includes a comprehensive set of proposals on how to improve the MFF. The vote on the report is scheduled for June in the BUDG Committee and for July in the plenary session.

The formal start of the procedure will depend on when the Commission presents the review and any proposal for revision. This has not yet been announced. The question is: with the migration crisis nowhere near over, the emerging terrorist threat, and the upcoming UK referendum; will the review and revision of the current financial framework be sufficient to face these extraordinary challenges?