EPRS Admin By / January 15, 2018

Timeline of main MFF 2014-2020 events

Many other stakeholders are involved in the debate, and some have already expressed their views. There is general agreement that…

Timeline of main MFF 2014-2020 events

Many other stakeholders are involved in the debate, and some have already expressed their views. There is general agreement that the EU Budget needs reform. Focus on results, leverage, synergies, conditionality and European added value are often mentioned among the principles that should underpin any changes. Stakeholders from academic, expert and political circles underline that in a rapidly evolving world, the design of the EU Budget has to ensure the right balance between predictability of investments and capacity to respond to new challenges and priorities. The problems that the current MFF faces demonstrate how difficult the task is, and the weaknesses of the EU financing system. In summary, the main issues highlighted by the EU institutions and stakeholders are the following:
• Reform of the financing side of the budget – the current system of EU own resources is widely criticised and there is a growing consensus on the need for reform. It is expected that the HLG’s recommendations on own resources will make a significant contribution to the Commission’s concrete proposals for change, which should be tabled together with the post-2020 MFF proposal.
• Duration of the MFF – the current, seven-year MFF is not synchronised with the five-year political cycle determined by the political terms of the European Commission and the European Parliament. Proposals that could fix the problem include a five-year MFF aligned to the political mandates of the main EU institutions; five + five years with a compulsory mid-term review; ten years with compulsory mid-term revision for programmes requiring long-term programming and five years for other elements of the MFF. According to others, the seven-year MFF has its advantages and should not be changed.
• MFF priorities and structure – some analyses consider the current structure of the MFF outdated, too focused on past priorities and insufficiently supportive of initiatives with high European added value. From this perspective, aligning the budget to a new and evolving set of EU strategic priorities appears to be a crucial aspect of the reform. New areas frequently identified as requiring stronger financial EU intervention include border management, migration and refugees, security challenges and defence, and a reinforced investment policy.
• Flexibility – experience of the implementation of the current MFF appears to show that the capacity to respond swiftly to new challenges requires that more flexibility and reserve capacity be built into the MFF. There is considerable demand for greater possibilities to shift resources within and between MFF headings; for creation of a special crisis reserve; for the re-use of de-committed amounts and fines; and action to secure bigger margins under annual ceilings. At the same time, however, the question of ensuring the MFF’s predictability is also raised.
• Unity of the budget – the proliferation of new instruments for financing EU actions, especially in external policy, and partially outside the EU Budget (e.g. the EFSI; EU trust funds for external action; and the Facility for Refugees in Turkey), raise questions about the principle of the unity of the budget and democratic accountability.
The creation of instruments with a stabilisation function for the euro area – such instruments could be developed outside or within the EU Budget. The European Commission has already expressed its intention to put forward proposals within the EU framework in the context of the next MFF (see Section 3.4).
• Financial instruments – the use of innovative financial instruments has become an important feature of the current MFF. While these can be advantageous to the budget’s effectiveness, some aspects of their functioning in the EU Budget will have to be reconsidered, for instance their interplay with grants, capacity to leverage public and private investments, simplification of delivery, etc.
• European Development Fund (EDF) budgetisation – the €30.5 billion EDF, an intergovernmental tool for development cooperation with the African, Caribbean and Pacific Group of States (ACP), is not currently included in the EU Budget. In the 2013 interinstitutional agreement on budgetary matters, the Commission declared its intention to propose the EDF’s inclusion in the EU Budget as of 2021.
• Role of the budget in EU economic governance and respect of rule of law – there are proposals to strengthen and extend existing links between the EU Budget and the EU’s economic governance framework (for example, macro-conditionality of the ESI funds and links with country-specific recommendations). The idea of creating stronger links between the disbursement of EU funds and respect for the rule of law has also been mentioned.
• Changes to the decision-making process – the current procedure leading to agreement on the MFF with a unanimity vote in the Council is seen as one of the main obstacles to budget reform. Stakeholders are calling for greater transparency in the process and the involvement of EU citizens. Some proposals emphasise the need to shift towards qualified majority voting in the Council or to give more power to the European Parliament.

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