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Delivering the 2021-27 MFF and NGEU: How to, match strategy, resources and expectations?

Written by Velina Lilyanova,

On 4 May 2021, EPRS held a second online policy roundtable dedicated to the new multiannual financial framework (MFF) for 2021‑2027. While the first event focused on lessons learned from the negotiations, this time the focus was on the outcome and the challenges of implementation, as the title ‘Delivering the 2021-27 MFF and NGEU: How to, match strategy, resources and expectations?’ suggests.

Etienne Bassot, Director of the Members Research Service, opened the event with a keynote speech by Johan Van Overtveldt (ECR, Belgium), Chair of Parliament’s Committee on Budgets. Fabia Jones, Head of the EPRS’ Budgetary Policies Unit, moderated the roundtable discussion featuring Hanna Jahns, Deputy Head of the cabinet of the Commissioner for Budget; Jorge Nuñez Ferrer, Senior Research Fellow at CEPS; Eulalia Rubio, Senior Research Fellow at the Jacques Delors Institute, as well as Alessandro D’Alfonso and Alina Dobreva, EPRS policy analysts.

Johan Van Overtveldt shared his view that the ultimate goal of the MFF negotiations was to ensure an EU budget optimally aligned with policies providing the highest added value for citizens. Ambitious plans go hand in hand with ensuring the necessary means to fulfil them. Should the means remain unchanged, the EU needs to rethink the direction in which they flow, he underlined. The need for an even more modern EU budget is evident; one area where Europe is lagging behind is investing in technologies of the future, for example. Johan Van Overtveldt assessed the way strategy, resources and expectations have been matched in the Next Generation EU (NGEU), and its main part, the Resilience and Recovery Facility (RRF) more positively, however. His key message was that the EU must deliver results for the resources invested. Thorough scrutiny, avoiding fraud and taking responsibility – at both the EU and national level – are key ingredients to ensuring a successful EU recovery.

Hanna Jahns detailed how the EU’s new financial package responds to current priorities. She outlined the stages of the negotiations from the initial proposal to the final deal, and assessed the MFF, together with the NGEU, as offering a solid basis to match the strategies with resources and expectations. However, in answer to the question the title of the event posed, Hanna Jahns noted that time is needed, as many of the sectoral programmes are still being prepared. She noted the example of the EU’s Covid‑19 response, for which the EU’s entire resources and resourcefulness have been mustered to support citizens. The pandemic has underlined that the EU budget is the best tool to combine with national measures to support a crisis.

Jorge Nuñez Ferrer flagged some of the challenges of implementing the recovery package. While conceived as an emergency fund, the RRF is essentially a redirection fund, meant to create systemic change in the way the economy works, and bring additionality to MFF funding. Acknowledging its broad scope, Jorge Nuñez Ferrer considers targeting financing to those areas most in need to be crucial, in particular to compensate for the difficulties incurred in structural reforms. He highlighted the need to build a good framework for a dynamic future economy and an asymmetric recovery process; transform the labour market, social policy and education with a longer term focus in view; to accentuate the additionally of the RRF projects and counter the risk of a renationalised recovery and a diminished European dimension.

Eulalia Rubio focused on innovation, research and digital policy in the new MFF, and reflected on the main qualitative changes and the new EU industrial strategy. Speaking of Horizon, Digital Europe, and InvestEU, she shared three main conclusions: a need to rescale the EU resources allocated to the later stages of innovation, i.e. deployment and commercialisation; focusing innovation and research, and coordination and alignment with the national level to boost synergies and compensate for the lack of sufficient resources at the EU level.

Alessandro D’Alfonso explained how the MFF package addresses challenges in the field of climate and border management and migration, the topic of his latest briefing. The fight against climate change is a major challenge of our times and citizens increasingly see green transition as a core EU mission. This calls for significant investment, which the new MFF and NGEU indeed offer: 30 % of their resources are targeted at climate related objectives. Moreover, at the Parliament’s initiative, a Just Transition Fund was created to finance decarbonisation efforts in the regions most exposed to the cost of transition, to ensure inclusive and sustainable recovery. Alessandro suggested introducing new own resources, linked to climate action as a potential solution to maintain the level of climate funding in the future. Migration and border management was also identified as an area in need of more resources and joint action, and as a result, resources have almost doubled.

Alina Dobreva concluded the discussion by linking it with public opinion research. While too early to say how citizens evaluate the new MFF, she presented some key trends identified in her recent in-depth analysis. Alina Dobreva highlighted a positive trend of citizens increasingly supporting greater means for the EU budget (with considerable differences between Member States). According to Eurobarometer, citizens consistently want more EU funds to be spent on employment, social affairs and health, and increasingly on climate change. Just as consistent, however, is the misperception that the EU spends excessively on administration and ‘overspends’ in general, which calls for improved communication on the EU budget.

The whole discussion, followed by a lively Q&A session, is available on our YouTube channel. Those interested in the MFF negotiations can also watch the video of the 14 April debate hosted by EPRS’s European Council Oversight Unit and launched by President Sassoli.

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