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EU Budget 2021-2027: Challenges and opportunities

Written by Alessandro D’Alfonso and Velina Lilyanova,

© European Union 2020, EPRS

The European Council of 20-21 February 2020 failed to reach agreement on the EU’s next multiannual financial framework (MFF) at the level of EU Heads of State or Government. Although the date of the next European Council meeting devoted to the topic has not yet been decided, with the ongoing coronavirus crisis occupying leaders’ attention, the shape and function of the post-2020 MFF is still an urgent issue, since the current framework comes to an end in December. Many points remain open for discussion. As a contribution to the ongoing debate, EPRS has published three papers on the EU budget and the related negotiations, drafted by external specialists for an EPRS expert seminar organised ahead of the February European Council meeting.

As highlighted by Anthony Teasdale, Director General of EPRS, the expert seminar ‘EU Budget 2021-2027: challenges and opportunities’ aimed to facilitate and stimulate an open discussion on the next MFF as an important milestone for the future of the EU. At this event, EPRS and the Budgetary Policies Unit of the Members’ Research Service had the privilege to host the European Parliament’s entire MFF negotiating team, namely: Johan Van Overtveldt (ECR, Belgium), Chair of the Committee on Budgets; Jan Olbrycht (EPP, Poland), MFF co-rapporteur; Margarida Marques (S&D, Portugal), vice-chair of the BUDG Committee and MFF co-rapporteur; José Manuel Fernandes (EPP, Portugal), Own Resources co-rapporteur; Valérie Hayer (Renew, France), Own Resources co-rapporteur; and Rasmus Andresen (Greens/EFA, Germany). Each Member of the negotiating team provided insightful assessments of the key issues at stake both on the expenditure and revenue sides of the EU budget. Held under the Chatham House rule, the seminar triggered a very engaged and lively discussion, which kept the room full for the entire duration of the event.

Three well-known experts in the budgetary field participated as external speakers: Giacomo Benedetto, Jean Monnet Chair in EU Politics at Royal Holloway, University of London; Jorge Núñez Ferrer, Senior Research Fellow at the Centre for European Policy Studies (CEPS); and Eulalia Rubio, Senior Research Fellow at Jacques Delors Institute in Paris. Giacomo Benedetto focused on a possible new package for finance and expenditure in the EU budget, analysing the challenges that the net-balances logic poses to reform. Jorge Núñez Ferrer examined how the EU budget can allow Member States to save at national level, but stressed the need for a broader perspective since the benefits of the EU budget are not limited to savings. Looking at the usefulness of flexibility in the budgetary framework, Eulalia Rubio explored ways of enhancing it in the next MFF, while not neglecting the possible costs and implications. Their three papers are available at the end of this blog post.

In addition, the debate, moderated by Sidonia Mazur, EPRS policy analyst, also benefited from internal expertise. Richard Crowe, from Parliament’s Legal Service, analysed the legal challenges related to the process of negotiating the MFF and shared insights on several aspects, including the steps needed in the event of a ‘no deal’ scenario. Alessandro D’Alfonso, EPRS policy analyst, examined the major role that climate action might have in defining the next MFF, including through its mainstreaming across the EU budget, which he examined in a recent paper. Magdalena Sapala, also an EPRS policy analyst, delved into flexibility, presenting her recent paper on such instruments in the MFF. She underlined in particular how flexibility is crucial for ensuring efficiency.

In brief, the expert seminar showed that the EU finds itself at a turning point, where many things have to be defined at the start of a new institutional cycle, and identified key issues at stake. Far from being an accounting exercise, the decision on the next MFF is highly political and will be crucial in determining the level of ambition of the EU as regards jointly tackling common challenges and objectives. Parliament’s negotiators made it clear that the European Parliament is united and resolved to secure a good MFF that benefits all EU citizens. In addition, they recalled that Parliament’s consent to the MFF will be conditional on a satisfactory reform of own resources. Following the February European Council and disappointed with its failure, Parliament’s negotiating team reiterated this position, stressing the need for a political vision and calling for an ambitious compromise based on agreed common objectives for a stronger Europe.

In a debate on the MFF in the March I plenary session, Members of the European Parliament strongly criticised the cuts envisaged in the compromise put forward by the European Council President in February 2020, including in view of the current coronavirus crisis and of recent tensions at the Greek-Turkish border. Against the background of the delay in finding an agreement, they again urged the Commission to present a contingency plan to protect beneficiaries of EU funding, and demanded that the next MFF be endowed with an appropriate level of resources.

Read the papers:

External contributions

EPRS in-depth analyses

Discussion

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