Brussels, 02/12/2013 (Agence Europe) - On Monday 2 December, the Council of Ministers of the EU adopted, without debate and unanimously, the two texts on the multi-annual financial framework of the EU (MFF) for 2014-2020: - the Council regulation laying down the multi-annual financial framework for the period 2014-2020; - and the inter-institutional agreement between the European Parliament, the Council and the Commission on budgetary discipline, cooperation in budgetary matters and sound financial management. The Parliament finally approved the MFF on 19 November (see EUROPE 10966).
The regulation on the MFF means the European Union to have a maximum amount of €959.99 billion in commitment appropriations over the next seven years (or 1% of the gross national income of the EU28) and €908.40 billion in payment appropriations. These amounts, which are respectively 3.5% (€35 billion) and 3.7% less than the MFF for 2004-2013, “will ensure the budgetary discipline of the EU and reflects the specific budgetary pressure the member states are currently under at national level”, the Council stresses.
Particular emphasis has been placed on expenditure to promote growth and create jobs, in line with the political priorities of the EU: the limit on expenditure for sub-heading 1a (competitiveness) has been increased by more than 37% compared to the current MFF.
The MFF regulation and the inter-institutional agreement legally translate the political agreement reached by the Council and the European Parliament on 27 June 2013. The upper limits on expenditure for the next seven years are the same as those included in the conclusions of the European Council of February 2013 and, on four issues (flexibility, re-examination/revision, budget unity and own resources), and the text takes account of the requests made by the European Parliament.
The formal adoption of the MFF regulation and the inter-institutional agreement will allow the Council and the European Parliament to complete their work on the two other planks of the MFF package, specifically some 70 expenditure programmes and three legislative acts on own resources (European Union revenue).
As regards these 70 expenditure programmes (in fields such as research, agriculture and the cohesion policy), negotiations between the Council and the European Parliament have been concluded or are in the home straight. The aim is to ensure that the legislative acts are formally adopted before the end of the year so that they can be implemented from 1 January 2014.
Negotiations are still underway on the own resources of the EU. The main legislative act on revenue - the decision on the own resources - has to be approved by the member states in line with the constitutional rules of each (in other words, ratification by the parliaments in most cases) once they have been adopted by the Council (ruling unanimously), having received the opinion of the European Parliament. As this process takes a certain amount of time, the decision will enter into force retroactively, as has been the case for the periods covered by earlier MFFs. The other legislative acts on revenue are one implementing regulation and one regulation making the various own resources available.
A re-examination of the MFF will take place in 2016 at the latest, after the European Parliament elections. In the context of the mid-term re-examination/revision of the financial framework, the institutions will examine (before the Commission presents its proposals) the most appropriate duration for the next financial framework, “with a view to striking a fair balance between the duration of the respective terms of the members of the European Parliament and the European Commission and the need to ensure the stability of the programming cycles and predictability of investments”.
For the next MFF, which starts in 2021, the Commission is to present a proposal before 1 January 2018 and bring it into line with the political cycles of the institutions (in other words, five years).
Flexibility
The aim of the regulation is to bring about bring “the greatest possible” specific flexibility in order to allow the EU to fulfil its obligations.
First of all, there is an overall margin for payments. As of 2015, unused margins within the upper limit on payments for the previous year will be rolled over to the next year, within certain limits, for the final three years of the MFF (2018: €7 billion, 2019: €9 billion, 2020: €10 billion). The upper limit on payments for the years for which the unused margins subsist will be reduced accordingly, so that the overall upper limit remains unchanged.
The MFF provides for to allow the EU to react to specific unforeseen circumstances, or to allow the financing of expenditure which cannot be funded within the available limits for one or more headings of the MFF, thereby facilitating the budgetary procedure: the reserve for emergency aid (annual envelope laid down at €280 million), the Solidarity Fund of the EU (€500 million maximum), the flexibility instrument (annual limit of €471 million), the European Globalisation Adjustment Fund (no more than €150 million a year), the margin for unforeseen circumstances (this can be as high as 0.03% of the gross national income of the EU outside the upper limits of the MFF, as a “last resort in the event of unforeseen circumstances”), specific flexibility to tackle youth unemployment and reinforce research (a maximum sum of €2.543 billion to be focused at the start of the period in 2014 and 2015) and the overall margin for commitments in favour of growth and employment, particularly youth unemployment (every year, the Commission will calculate the available amount).
There is also a specific provision for the possibility of including commitment appropriations in the budget beyond the limits laid down in the financial framework when recourse to special instruments is required.
Major projects
The MFF also lays down the maximum level of contributions from the general budget of the EU in favour of major projects: €6.300 billion for the European satellite navigation programmes (EGNOS and Galileo) over the period 2014-2020, €2.707 billion for the international experimental thermonuclear reaction project (ITER) over the period 2014-2020 and €3.786 billion in the general budget for Copernicus (the European Earth observation programme) for the period 2014-2020.
Council also adopts a series of declarations
Own resources. A declaration by the three institutions of the EU stresses the need to continue work on the issue of own resources. To this end, a high-level group, made up of members appointed by the three institutions, will be invited to meet. The group will carry out a general re-examination of the system of own resources, taking account of the general objectives of simplicity, transparency, fairness and democratic accountability. An initial evaluation will be available by the end of 2014. The state of progress will be assessed at political level in the framework of meetings held on a regular basis, every six months at least. The national parliaments will be called upon to take part in an inter-institutional conference during the year 2016, to examine the results of the work carried out. On the basis of these results, the Commission will decide whether there are grounds for starting new initiatives regarding own resources. This assessment will be carried out in tandem with the targeted re-examination of Article 2 of the regulation on the MFF in order to plan any reforms over the period covered by the forthcoming multi-annual financial framework.
Efficiency of public expenditure. The European Parliament, the Council and the Commission have agreed to work together in order to make savings and improve synergies at national and European levels, so as to improve the efficiency of public expenditure in the areas covered by EU measures. In order to do this, the institutions will, in the way they feel is most appropriate, take as their basis such issues as knowledge on best practice, exchange of information and the available independent evaluations. The results will be available and used as a basis for the Commission to draft its proposal on the next multi-annual financial framework.
Parity. The European Parliament, the Council and the Commission agree that the annual budgetary procedures followed for the MFF 2014-2020 will, if required, include elements of parity between the sexes, taking account of how the overall financial framework of the EU helps to improve equality between men and women.
Article 15. The institutions have agreed that the amount (up to €2543 million to be focused at the start of the period in 2014 and 2015) stipulated in Article 15 (specific flexibility to tackle youth unemployment and reinforce research) of the MFF 2014-2020 will be used as follows: €2143 million for youth unemployment, €200 million for Horizon 2022, €150 million for Erasmus and €50 million for COSME (competitiveness of businesses).
National management declarations. In its resolution on discharge dated 17 April 2013, the European Parliament called for a standardised national management declaration model to be created to be published by the member states at the appropriate political level. The Commission is inclined to examine this request and would like to invite the European Parliament and the Council to take part in a working group with a view to making recommendations by the end of this year.
Re-examination/revision. The Commission confirms its intention of presenting legislative proposals with a view to a revision of the regulation on the MFF. In this context, it will pay particular attention to the functioning of the overall margin for payments in order to ensure that the overall upper limits of payments remain available for the entire period in question. It will also assess developments in the overall margin for commitments. The Commission will also take account of specific requirements laid down by the Horizon 2020 programme. The Commission will also study the possibility of bringing its proposals on the forthcoming MFF into line with the political cycles of the institutions. (LC/transl.fl)