David McAllister MEP: The Revision of the EU’s long-term budget 2021-2027 (MFF)
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20. September 2023 In Aktuell, Allgemein, EN

David McAllister MEP: The Revision of the EU’s long-term budget 2021-2027 (MFF)

I.

The EU’s long-term budget, the Multiannual Financial Framework (MFF), sets the annual limits on our commitments and payments in all policy areas. Unanimity in the Member States and consent from the European Parliament is necessary to adopt the MFF.

The current MFF, together with the NextGenerationEU COVID-19 recovery fund, amounts to €2.018 trillion in current prices (€1.8 trillion in 2018 prices). The final agreement reached on 17 December 2020 was unprecedented. It consisted of the long-term budget, the 2021-2027 MFF, made up of €1.211 trillion in current prices (€1.074 trillion in 2018 prices), combined with the temporary pandemic recovery instrument, NextGenerationEU, of €806.9 billion (€750 billion in 2018 prices).

Since the current MFF was adopted, the EU has faced a series of unprecedented and unexpected challenges – from Russia’s brutal invasion of Ukraine and its consequences including the energy crisis, migration, increasing inflation and interest rates. Addressing these multiple challenges has pushed EU resources to the point of exhaustion, hindering our capacity to address even the most urgent challenges.

In December 2022, the European Parliament called for an MFF revision to address funding gaps, increase flexibility and crisis responsiveness. The Resolution on ‘Upscaling the 2021-2027 MFF: a resilient EU budget fit for new challenges’ was co-authored by Jan Olbrycht MEP.

In June 2023, the Commission published proposals for a revision of the MFF. At the same time, the Commission proposed a second basket of new own resources for the EU Budget, including a new temporary statistical own resource based on corporate profits as well as adjustments to the ETS and CBAM own resources.

One of the main areas of the Commission’s proposal for a revision of the MFF is to address long-term support for Ukraine through a Ukraine Facility of €50 billion. €17 billion of that would be financed by fresh money, and the rest would be loans.

Additionally, the Commission’s proposal consists of a migration and external challenges component of €15 billion; a STEP platform of €10 billion; an increase on the administration of €1.9 billion; a EURI instrument of €18.9 billion and an increase to the Flexibility Instrument of €3 billion.

II.

The European Commission heeded the EPP Group’s warning that a substantial revision of the EU’s long-term budget, the Multiannual Financial Framework (MFF), was urgently needed. We will insist that the revised MFF is in place by 1 January 2024.

The Commission has proposed €65.8 billion in fresh money for the revised MFF. Unfortunately, that figure is inadequate and cannot deliver the required flexibility and urgent top-ups for priority areas needed. Parliament is now calling for an ambitious but realistic €10 billion boost, in addition to the Commission’s proposal.

The EPP Group stands with Ukraine and supports EU plans to provide further financial aid to the country under the newly-proposed ‚Ukraine Facility‘. We welcome the long-term and structural nature of this support. However, the Parliament’s role as a budgetary authority in its mobilisation will be essential.

Sufficient flexibility must be instilled in the revised MFF to ensure the EU is prepared for any unforeseen crises in the coming years. Therefore, we call for an essential top-up to the Flexibility Instrument of €3 billion and €2 billion for the Solidarity and Emergency Aid Reserve.

The Commission aims to increase competitiveness through the creation of a €10 billion Strategic Technologies for Europe Platform (STEP) platform. We want to add another €3 billion to allow STEP to better contribute to its objectives. The funds directed towards InvestEU, Horizon Europe, the Innovation Fund and the European Defence Fund are a first step in the right direction, but the Commission should use this as a pilot project to evaluate the need for a more profound proposal in the next MFF (post-2027).

An increase in funds to address external and internal migration pressures, and strengthen partnerships with key third countries, is vital and the EPP Group calls for €1 billion more in Heading 4 (migration and border management) and a €1 billion increase in Heading 6 (neighbourhood and the world).

Rising, unpredictable borrowing costs related to the Union’s COVID-19 recovery fund, NextGenerationEU, have added enormous strain to the already overstretched MFF. The EPP Group called for a sustainable plan to cover increased interest costs on debt repayments (EU Recovery Instrument/EURI line). Our call forced a change of approach to the repayment plan, but the problem is not fully resolved by the Commission’s proposal. We insist that the entire Recovery Instrument debt cost should be taken over and above the MFF ceilings. Agreed EU programmes should not have to compete against it for funding.