In a debate ahead of the European Council on 17-18 July, MEPs on Wednesday 8 July warned that they fear an agreement that would reduce the 2021-2027 Multiannual Financial Framework (MFF) in exchange for the adoption of the European Economic Recovery Plan following the Covid-19 crisis.
On Thursday 9 or Friday 10 July, the President of the European Council, Charles Michel, is expected to present his proposal on the new “negotiating box” to facilitate a compromise on the European Recovery Plan and the 2021-2027 Multiannual Financial Framework (MFF) (see EUROPE 12521/12, 12519/1).
During the debate, Mr Michel recalled that all the important issues on the Recovery Plan remain to be negotiated by EU leaders: the size of the Recovery Plan, the balance between loans and grants, and the allocation criteria proposed by the Commission (Mr Michel wants to try a more dynamic approach). He also recalled that there are different views on the amount of the MFF, rebates, own resources, and the link between the Recovery Plan, the reforms to be implemented, and governance. The question of the Rule of law is also under discussion, Mr Michel recalled.
On behalf of the Commission, Commissioner Maroš Šefčovič stressed the need to have “the money” to implement EU policies. He welcomed Mr Michel’s dynamic approach to the ambitious MFF and Recovery Plan package. The role of the European Parliament is crucial in this process, he said.
There is “strong support” among EU leaders for the Commission’s proposals, including the unprecedented response, financing through loans, and new own resources, summarised Maroš Šefčovič. He indicated that the Commission would present a roadmap with new own resources for the EU budget.
In the debate on the German Presidency, Commission President Ursula von der Leyen called for “not neglecting the MFF” in the face of the EU Recovery Plan. “Both are important”. ‘Next generation EU’ has to deal with the acute crisis, but “the MFF is here to stay”, insisted the Commission President, who called for an agreement “now” on these issues.
Siegfried Mureșan (EPP, Romania) expressed concern that Parliament is not involved in the discussions. He criticised President Michel for wanting to present a budget that must “do more with less”. “We can’t hide a small MFF behind a recovery package”. He argued for the introduction of a tax on plastics now so that rebates can be initiated before 2027. The Commission proposes that depreciation should start from 1 January 2028.
Iratxe García Pérez (S&D, Spain) said her group would accept no less than €500 billion in grants under the Recovery Plan. She also defended the link between the disbursement of funds and respect for the Rule of law. The debate on own resources needs to be launched, she said. At a press conference, Iratxe García Pérez added: “We cannot accept a reduction in the MFF”.
For Valérie Hayer (Renew Europe, France), the agreement will have to meet two conditions. The first is the creation of new own resources to repay the loan. “Let's shift the burden to GAFA, the multinationals that practice tax optimisation, and the big polluters”, she said. Her second condition: “an effective and actionable mechanism for the protection of the Rule of law”.
Philippe Lamberts (Greens/EFA, Belgium) said the amounts in play are not huge: “1.5% of GDP for 3 years, in the face of a 9 or 10% recession”. He referred to the conditionalities linked to the Recovery Plan, which include “useful investment”, namely the environmental and solidarity transition and the digital transition.
Manon Aubry (GUE/NGL, France) said that as long as there are not sufficient own resources, the debate on the distribution between loans and grants is theoretical, “because it is ultimately the European states that will have to repay and therefore the people of Europe who will have to foot the bill”.
According to her, the Recovery Plan represents only 0.5% of European GDP, which is expected to decrease by 8% in 2020. European aid will arrive after the battle, and the MFF will be reduced, she lamented. She made reference to sleight of hand: giving with one hand and taking with the other. (Original version in French by Lionel Changeur)