The three co-legislating institutions of the European Union - the EU Council, the European Parliament and the European Commission - made progress on Monday 5 October in negotiations to finalise the details of the EU’s Multiannual Financial Framework (MFF) for 2021-2027 and the European Economic Recovery Plan, following the damage caused by Covid-19.
After the sixth such negotiating session, the Parliament’s negotiating team noted progress in the area of own resources and governance of the Recovery Plan. However, the link between the EU budget and respect for the Rule of law is still pending, as is the increase in appropriations for 15 flagship programmes requested by MEPs. Another meeting is scheduled for Thursday 8 October, specifically to try to make progress on the flagship programmes.
Johan Van Overtveldt (ECR, Belgium), chair of Parliament’s Committee on Budgets, said Parliament should not be blamed for the slow pace of discussions, as it has been ready since November 2018.
Governance of the Recovery Plan. José Manuel Fernandes (EPP, Portugal) pointed out that Parliament would be involved in the use of money from the Recovery Plan, both in the annual budget procedure and through a future change to the Financial Regulation.
“For the future, we will have a declaration to set up a joint committee that will analyse the impact of the use of Article 122 [on which the Recovery Plan is based], so that Parliament has a say and democratic legitimacy is strengthened”, he explained.
Any progress on Article 122 will allow Parliament to confirm the compromise on the treatment of external earmarked revenue and borrowing and lending operations (in the Recovery Plan), explained one source.
Flagship programmes. Jan Olbrycht (EPP, Poland) and Margarida Marques (S&D, Portugal) explained that Parliament wants to strengthen certain programmes (research, migration, defence) by taking EUR 12.9 billion out of the MFF. According to Mrs Marques, the EU Council must find new money and meet Parliament’s demands.
Another issue is budgetary flexibility and how the MFF should be revised.
Own resources. MEPs have noted progress in this area. Provisions on a timetable for the introduction of the new own resources are reportedly included in the Interinstitutional Agreement on budgetary matters, which will be binding.
The new own resources will have to be sufficient to pay for the interest and amortisation of the European Recovery Plan, Mr Fernandes said.
Valérie Hayer (Renew Europe, France) said differences remain over the participation of the EU’s ETS emission quota exchange system and a future financial transaction tax in the EU budget (see EUROPE 12568/1).
On the uniform call rate for the amount representing the revenue generated by the ETS system, Parliament is calling for an introduction from 1 January 2021, whereas the EU Council is expected, at this stage, to advocate the beginning of 2023.
For Parliament, the financial transaction tax should be in force from 1 January 2024, while the Member States want it for the beginning of 2026.
Rule of law. Valérie Hayer considered the German EU Council Presidency’s proposal on the link between the EU budget and respect for the Rule of law (see EUROPE 12571/4) to be “far too weak”. Parliament is calling for an effective sanctions mechanism, with qualified majority voting by Member States, she said.
Referring to the Hungarian and Polish threat to block the own resources decision if the text does not satisfy them, Mr Fernandes regretted that “some countries are using unanimity on the own resources decision to engage in blackmail on other issues”.
Addressing Parliament on Monday, German State Secretary for European Affairs Michael Roth explained that this was an offer to negotiate with Parliament to find a satisfactory outcome. Unanimity of the Member States will not be required to decide, he promised. (Original version in French by Lionel Changeur)