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EU Financing / Budgetary Affairs, PUBLICATIONS

Post-2020 multiannual financial framework

Euro bandiera

© oraziopuccio / Fotolia

Written by Magdalena Sapała,

If you are looking for a comprehensive source of information, analysis and infographics on the preparation of the EU’s post-2020 multiannual financial plan, you are in the right place. This blog post will lead you through a collection of publications, prepared by researchers at the European Parliamentary Research Service, covering the proposals on the EU multiannual financial framework for 2021-2027 and own resources as well as all proposed sector-specific acts for new and continued programmes and funds. 

The future multiannual financial framework (MFF) is high on the EU agenda once more. With the current MFF for 2014-2020 entering its final stretch, the EU has started preparing the post-2020 plan. The MFF sets the annual limits on EU commitments in different policy areas and on overall annual payments. It must cover at least five years. In practice, in most cases its duration has been set at seven years. This multiannual plan of spending is usually negotiated as a package, together with proposals for own resources and for new and continued programmes and funds. Formally, these elements are adopted in different legislative procedures, with different roles for the European Parliament, the Council and the Commission. However, reaching an overall agreement on the MFF depends largely on the European Council and usually takes about two years. Negotiating the next MFF thus means debating the financial aspects as well as the vision for the EU’s action for the next decade.

MFF 2021-2027: Total

MFF 2021-2027: Total

The preparation of the next MFF is taking place amid a broader debate on the future of Europe. The new political priorities, set out by the Member States in the Bratislava Declaration in September 2016 and the Rome Declaration in March 2017, must be translated into concrete measures, which require financial means. Therefore, one of the key questions of the debate is how to ensure the financing of the EU’s new priorities in the areas of security and defence, protection of external borders, asylum and migration policy, and climate policy. While new financial needs emerge, existing, long-standing budgetary priorities remain relevant, and some have even gained in importance. Increased resources are needed for instance for EU programmes for youth, and research and innovation. In addition, the future MFF will be the EU’s first ‘post-Brexit’ financial plan. With the United Kingdom’s withdrawal, the EU is losing a net contributor to the budget and negotiations on a future relationship between the UK and EU, which might lead to payments from the UK for participation in specific programmes, have yet to commence.

MFF: Next steps

MFF: Next steps

Furthermore, the discussion on the next MFF is an opportunity to reform EU finances and re-emphasise some of the underpinning principles upon which they are built. The future EU budget, as often pointed out by the European Commission, must focus on the European added value to a greater extent, meaning that pooling resources at European level delivers results that spending at national level cannot. It has to be focused on delivering European public goods, designed and implemented with a view to enhanced performance, efficiency, agility and simplification. The other issues include extending existing links between the EU budget and the EU’s economic governance framework, as well as links between the disbursement of EU funds and respect for the rule of law.

Changes are also needed on the revenue side of the EU budget. There is broad consensus that the current own resources system needs to be reformed. It is seen as complex and opaque and encouraging Member States to focus on securing ‘fair return’, from the EU budget, rather than thinking strategically about how best to finance European public goods. However, while there is no shortage of ideas for alternative own resources that would radically simplify the system and endow the EU budget with greater financial autonomy, achieving significant reform has proven notoriously difficult.

Commission proposal for the 2021-2027 MFF, individual programmes as share of total (2018 prices)

Commission proposal for the 2021-2027 MFF, individual programmes as share of total (2018 prices)

On 2 May 2018, the Commission presented a package of legislative proposals on the 2021-2027 MFF, on own resources to finance the EU budget and on linking the EU budget with the rule of law. The proposals were followed by a series of further legislative proposals for new and continued spending programmes and funds under the next MFF. The European Parliament has presented its expectations on the post-2020 MFF and the reform of own resources and given its first reaction to the Commission’s proposals (declaration of 2 May and resolution of 30 May 2018).

Both Parliament and the Commission have signalled that they are ready to make an effort to reach agreement on the package before the May 2019 European elections. Meeting this deadline would help allow the new programmes to start on 1 January 2021, and avoid the delays that hindered the implementation of previous financial frameworks. However, recent European Council and Council meetings have not brought any clarity regarding the calendar. For now, the Parliament is sticking with its ambitious timeframe and plans to vote an interim report on the MFF package in November 2018.

Key EPRS publications

Publications on the proposal for the 2021-2027 MFF and Own Resources

Publications on the sector-specific proposals (new and continued programmes and funds)

Initial appraisals of European Commission impact assessments accompanying the MFF proposals

 

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