The European Parliament’s Committee on Budgets (BUDG) adopted on Wednesday 26 April, by 26 votes to two with five abstentions, a resolution on the impact of the increase in borrowing costs of the EU’s recovery instrument (EURI) on the EU budget for 2024, led by rapporteur Johan Van Overtveldt (ECR, Belgian).
To cover the borrowing costs related to the EURI over 7 years, the Multiannual Financial Framework (MFF) 2021-2027 programmed €12.9 billion in 2018 prices. At current prices, this would amount to 15 billion, assuming a gradual increase in interest rates on loans from 0.55% in 2021 to 1.15% in 2027, given that they are already 3% today.
MEPs warn that if no action is taken, funding programmes such as Erasmus+, EU4Health, ‘Citizens, Equality, Rights and Values’ and Creative Europe are likely to be cut, as high inflation reduces the real value of the overall EU budget.
Moreover, the additional resources normally available on the margins of the MFF are already exhausted due to multiple crises such as Russia’s war of aggression against Ukraine or the Covid-19 pandemic.
“The vote in the Committee on Budgets (...) is a clear statement from Parliament: we need to tackle this problem as soon as possible”, said MEP José Manuel Fernandes (EPP, Portugese). He also stressed the importance of an ambitious proposal on a second basket of new own resources for the EU budget (see EUROPE 13164/28). “Without new own resources for the EU budget by 2027, we will be forced to cut €15 billion of valuable EU programmes each year or increase Member States’ contributions to pay off our debts”.
This draft resolution will now be put to the vote in Parliament’s plenary on 10 May.
The European Commission is expected to present the draft annual budget plan for 2024 at the end of May and to propose a review or revision of the MFF, including a structural solution for EURI in June so that it can be in place by 1 January 2024.
To see the draft report: https://aeur.eu/f/6l7 (Original version in French by Pauline Denys)