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EU Financing / Budgetary Affairs, PUBLICATIONS

Post-2020 multiannual financial framework

Written by Magdalena Sapała,

Euro bandiera
© oraziopuccio / Fotolia

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.

Who decides about the next MFF?

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 (expenditure side of the budget). 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 (revenue side of the budget) and for new and continued programmes and funds.

MFF 2021-2027: Total

MFF 2021-2027: Total

Formally, these elements are adopted in different legislative procedures, with different roles for the European Parliament, the Council and the Commission. While the Parliament’s consent is necessary before the Council can adopt the MFF Regulation (Article 312 TFEU), it is only consulted by the Council before adopting the Own Resources Decision (Article 311 TFEU). The sectoral regulations in turn are agreed under the ordinary legislative procedure, with the Parliament acting on an equal footing with the Council (Articles 289 and 294 TFEU). In addition, although, according to the Treaties, the European Council ‘shall define the general political directions and priorities’ of the Union, and ‘it shall not exercise legislative functions’, experience of the last MFF negotiations shows that it plays a decisive role in taking decisions, including on the figures and on many detailed aspects of the spending programmes.

 

Reaching agreement is, exceptionally, further complicated this time by the overlapping change of the political terms of the Parliament and the Commission. In order to avoid possible resulting delays in the negotiating process and to the launch of the implementation of the spending programmes, the Commission and the Parliament called for a swift agreement on the MFF ahead of the May 2019 European elections. However, this goal was dashed by the European Council’s decision at the December 2018 summit to continue work at the Council level with a view to achieving an agreement only in autumn 2019.

What are the key issues of the debate?

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 and has to take the financial consequences of the United Kingdom’s withdrawal into account.

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)

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

What has been done so far?

Figure 18 – Timeline of the 2021 to 2027 MFF

Timeline of the 2021 to 2027 MFF

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.

In March 2018, the European Parliament presented its expectations on the post-2020 MFF and the reform of own resources. They were confirmed in the negotiating mandate adopted in November 2018. The mandate encompasses both the MFF and EU revenue and will thus be reflected in the Parliament’s mandates for legislative negotiations leading to the adoption of the EU programmes (sectoral regulations). Since July 2018, the parliamentary committees have been considering the negotiating mandates for 35 sectoral regulations proposed by the Commission. The plenary has already approved some of them. Parliament’s ambition is to express its position on all proposed programmes and funds before the European elections. The MFF package has been also intensively examined by the Council, mostly in the framework of the Ad Hoc Working Party on the MFF, the General Affairs Council and in sectoral working groups. The progress and results of the discussions so far was presented in the Austrian Presidency’s progress report and the draft negotiating box.

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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