The European Commission’s proposals on the mid-term review of the EU’s Multiannual Financial Framework (MFF) for 2021-2027 were criticised on Monday 10 July by a large number of EU European Affairs Ministers meeting in Brussels.
Poland and Hungary have made their agreement to this revision conditional on the release of European funds under their post Covid-19 recovery plan, while many countries – Germany, Austria, France, the Netherlands and the Scandinavian countries in particular – have come out against the increase in the MFF ceilings and national contributions, or have advocated making full use of the redeployment of appropriations within existing programmes and the flexibilities offered by the fiscal rules.
The Spanish Presidency of the Council of the EU hopes to present a compromise text in October on the Commission’s legislative package asking EU countries to contribute €65.8 billion (see EUROPE 13205/1) to continue macro-financial aid to Ukraine until 2027, support Member States in their management of the EU’s external borders and fund a Strategic Technologies for Europe Platform (see EUROPE 13205/3). It is also a response to the increased borrowing costs associated with the Next Generation EU recovery instrument.
Unanimous agreement by the Member States is required to revise the MFF, a situation complicated by the criticism voiced at the General Affairs Council.
On the one hand, Poland and Hungary have indicated that they could not accept a revision of the MFF while the EU is still blocking the payment of EU funds to these countries under Next Generation EU until the prior reforms required of them have been undertaken (see EUROPE 13215/24, EUROPE 13189/13).
“How can the Commission expect Hungary to contribute to increasing costs when we don’t have access to these funds? It is clear that we are not in a position to bear the cost of an instrument from which we cannot benefit”, declared the Hungarian Minister, Judit Varga, who was taking part in her last ministerial meeting.
For the Polish delegation, which considers the package presented to be unbalanced, as long as Warsaw does not have access to Next Generation EU funds, it will not be in a position to support the decision to amend the MFF.
On the other hand, the so-called ‘net contributors’ to the EU budget, such as Germany, Austria, the Netherlands and the Scandinavian countries, while supporting the need to continue to help Ukraine, pointed out that the increase in funding should be achieved by redeploying existing funds.
France also said that funding should be provided through redeployment and efficiency gains. While Belgium advocated a targeted revision, as did Slovakia and Slovenia, it expressed concern about the reallocation of cohesion policy funds.
Italy has deemed it necessary to revise the MFF, in particular to increase funding to better manage migratory flows. The proposal is a “good starting point”, according to this country.
Poland also felt that the funds were insufficient to help farmers deal with the effects of the war in Ukraine.
France and Italy have asked for appropriate governance to be provided for the management of funds from the European facility for Ukraine.
STEP. The proposal for the ‘Strategic Technologies for Europe Platform’ (STEP), a new funding instrument dedicated to clean technologies, deep tech and bio-technology, which mobilises existing funds in other programmes, has received a mixed reception from delegations (see EUROPE 13205/3).
Finland welcomed the fact that the Commission had not called for funds for the creation of an EU sovereignty fund, while Portugal regretted this. Belgium, for example, has questioned its added value. For Slovakia, this is a good step forward. Slovenia has asked that the projects be geographically balanced.
A “surgical” increase in ceilings. The European Commissioner for Budget, Johannes Hahn, has urged the EU Council to reach an agreement on the revision of the MFF by the end of 2023, as the European Parliament will be entering an election period at the beginning of 2024 and will be less inclined to compromise. He stressed the impossibility of redeploying funds via existing programmes, especially when the funds have already been allocated at national or European level. He judged the budgetary effort required of the countries to be minimalist and even surgical, amounting to 0.3% of the EU’s gross national income (GNI).
In addition, many countries have criticised the Commission’s plan to increase the budget for administrative expenditure. Mr Hahn pointed out that, under the calculation rules, the rise in civil servants’ salaries in the Member States has had the effect of increasing the salaries of the European civil service.
Several Ministers, including those from the Baltic countries, have asked the Commission to increase funding for military mobility, in the context of the war in Ukraine and the threat from Russia.
Own resources. Few delegations (notably the French and Portuguese) welcomed the proposals on the EU’s new own resources. Ireland and Luxembourg have asked for the debates on the MFF to be kept separate from the discussions on the revenue side of the budget.
Compromise proposal in October? The General Affairs Council will debate the proposed revision of the MFF again on 19 September. Discussions will continue in July and September within the working group of national experts, according to the Spanish Presidency of the EU Council, which hopes to present a compromise text “ahead of the October European Council”. (Original version in French by Lionel Changeur)