Negotiators from the Council of the EU, the European Parliament and the European Commission will try to reach a final agreement on Monday 9 November on the details of the EU’s Multiannual Financial Framework (MFF) for 2021-2027 and the Economic Recovery Plan to overcome the Covid-19 crisis (see EUROPE 12594/2).
According to compromise documents seen by EUROPE, which will be submitted on Monday to representatives of the EU institutions, an addition of €15 billion to the EU’s flagship programmes (Horizon 2020, Erasmus, etc.) has been proposed. Initially, the European Parliament wanted €39 billion and the EU Council accepted €10 billion.
The €15 billion would be distributed as follows, according to the compromise document: €10 billion of new money and €5 billion from additional expenditure on margins, special instruments and decommitments of unused research appropriations. These figures could, of course, change during Monday’s negotiations.
New automatic ceiling adjustment mechanism. The logic of these funding modalities calls for creativity in the budget.
In a document seen by EUROPE, the Commission suggests a ‘New automatic mechanism for the annual adjustment of the MFF ceilings’ to “support the envelopes of the flagship programmes, in line with the priorities of the European Parliament”. €9 billion over the period 2022-2027.
This mechanism would be subject to a capping system with a guaranteed minimum.
In addition, part of the existing margins in the budget would be allocated to EU flagship programmes. The programmes could also be strengthened by using part of the repayments under the ACP Investment Facility and amounts decommitted in the field of research.
Reimbursement of the Recovery Plan. In addition, the European Commission suggests three complementary elements under the Economic Recovery Plan. Firstly, a specific mechanism could be put in place which would allow the special instruments of the MFF to be increased according to the interest and repayment costs of the Recovery Plan. This mechanism would ensure “that the budget’s ability to respond to unforeseen needs is preserved”, the Commission explains.
Secondly, to protect the budget against unexpected interest rate developments, an additional mechanism could be introduced to ensure that potentially higher than initially expected costs for interest and principal payments of the Recovery Plan are treated separately and do not affect the MFF expenditure and margins.
Thirdly, the interinstitutional agreement on financial discipline could specify that the treatment of interest on costs and reimbursements of the Recovery Plan in the 2021-2027 MFF be without prejudice to the way this issue will be dealt with in future MFFs from 2028 onwards. The need to ensure the introduction of new “sufficient” own resources to cover the planned expenditure linked to the reimbursement of the Recovery Plan would also be recalled.
Own resources. On this other important subject, Parliament has already obtained from the Council of the EU the addition of a binding timetable for the introduction of new own resources in the interinstitutional agreement in question. The dates for two revenues have yet to be decided.
With regard to the Financial Transaction Tax (FTT), Parliament expects it to be implemented from 1 January 2024, whereas the EU Council prefers the beginning of 2026. On ETS revenue, the Council of the EU stands by the beginning of 2023, while MEPs advocate an introduction on 1 January 2021.
Parliament and the EU Council agreed on 5 November on a mechanism linking the disbursement of EU funds to respect for the rule of law, with significant concessions to MEPs to make this mechanism work effectively, and despite criticism from Hungary and Poland (see EUROPE 12596/2) (Original version in French by Lionel Changeur)