Negotiators from the EU Council, the European Parliament and the Commission reached a political agreement, on Tuesday 10 November, on all elements of the EU’s Multiannual Financial Framework (MFF) for 2021-2027 and the European Economic Recovery Plan to overcome the Covid-19 crisis (see EUROPE 12598/11).
The European Commission immediately welcomed the agreement on Europe’s next long-term budget and the temporary recovery instrument ‘Next Generation EU’. “Once adopted, this package of €1.8 trillion will be the largest ever financed from the EU budget. It will help rebuild a post-Covid-19 Europe that is greener, more digital, more resilient and better adapted to current and future challenges”, the Commission said in a press release.
The European Parliament, meeting in plenary session on Wednesday 11 November, will debate the compromise on the MFF and own resources.
The agreement will be presented on Wednesday 11 November at the level of Member States’ Ambassadors to the EU. Unanimity in the EU Council is required on the MFF, while qualified majority is required for the proposal on Rule of law conditionality. The agreement reached on this ‘Rule of law’ text is expected to be endorsed on Thursday 12 November in the European Parliament’s Committees on Budgets and on Budgetary Control.
European Parliament snatches €16 billion more. The European Parliament secured €16 billion more than the European Council had agreed upon last 21 July, of which €15 billion will be used to reinforce some of the EU’s flagship programmes. One billion euros will allow for increasing the capabilities available to respond to future needs and crises.
Margarida Marques (S&D, Portugal) noted that this is the first time the Parliament has managed to increase the expenditure decided by the European Council and welcomed a “good agreement”.
Johan Van Overtveldt (ECR, Belgium) recalled that the European Parliament had “fought hard” to find a “positive” agreement.
EU programmes. The amount of the MFF 2021-2027 remains at €1.74 trillion, but there are plans to reinforce the following programmes with new money to the tune of €15 billion: - Horizon Europe, €4 billion; - Erasmus+, €2.2 billion; - EU4Health, €3.4 billion; - border management, €1.5 billion; - rights and values, €0.8 billion ; - Creative Europe (culture), €0.6 billion ; - InvestEU, €1 billion; - NDICI (development), €1 billion; - humanitarian aid, €0.5 billion (+ €0.5 billion for emergency aid).
The extra money will be taken from the €11 billion in competition fines (which companies have to pay when they fail to comply with EU rules), in line with the Parliament’s longstanding demand that the money generated by the Union should remain in the EU budget. One billion euros will come from the use of part of the reimbursements under the ACP Investment Facility and €500 million will come from the amounts decommitted in the field of research.
The agreement is in line with the conclusions of the European Council of 21 July on the MFF and the Recovery Plan, a European source said.
“The European Parliament has reason to be happy, with €12.5 billion of new money for EU programmes in the MFF and a reallocation of funds of €2.5 billion”, the source explained. In addition, €1 billion will be made available through a reinforcement of the budgetary flexibility instruments.
An ambitious roadmap on new own resources has been agreed upon, but this roadmap, even though it appears in the Interinstitutional Agreement on budgetary discipline, “is not legally binding”, explained one European source, because of the prerogatives of national parliaments. The European Parliament says, on the contrary, that this roadmap is legally binding.
Own resources. The negotiators agreed in principle that the medium and long-term costs of repaying the debt resulting from the Recovery Plan should neither be at the expense of MFF investment programmes nor lead to a high increase in Member States' contributions based on Gross National Income (GNI).
The roadmap provides for: - the introduction in 2021 of a contribution calculated on the weight of non-recycled plastic packaging waste; - an own resource based on the Emissions Trading Scheme (from 2023, possibly linked to a Carbon Border Adjustment Mechanism); - a digital tax (from 2024); - an own resource based on the financial transaction tax (FTT) as well as a financial contribution linked to the business sector or a new common corporate tax base (from 2026).
Valérie Hayer (Renew Europe, France) welcomed the six new own resources decided upon, which are intended to repay the Recovery Plan and “bring back fiscal justice”.
The European Parliament did not succeed in getting the €12.9 billion from interest under the Recovery Plan to be taken into account beyond the MFF ceiling.
José Manuel Fernandes (EPP, Portugal) explained that safeguards are provided for: a joint declaration by the institutions states that “the new own resources must be sufficient to pay the debt, with the aim of not reducing EU programmes”.
Horizontal issues. The agreement foresees that at least 30% of the total amount of the Union’s budget and the expenditure of the Recovery Plan should support climate objectives. The target is to reach 7.5% of annual expenditure on biodiversity targets by 2024 and 10% by 2026. Another horizontal priority of the MFF will be to promote gender equality and gender mainstreaming, with in-depth evaluation and monitoring of the impact of the different programmes on women and men. (Original version in French by Lionel Changeur)