In a draft report by co-rapporteurs Jan Olbrycht (EPP, Polish) and Margarida Marques (S&D, Portuguese) of Parliament’s Committee on Budgets, published on 20 July, the European Parliament reviews the European Commission’s proposal for the revision of the Multiannual Financial Framework (MFF) for 2021-2027 (see EUROPE 13205/1). MEPs have until 31 August to table their amendments.
This revision has been undertaken within the context of needing to deal with unforeseen economic circumstances arising from the Russian war of aggression in Ukraine and to provide greater budgetary flexibility.
The European Commission has estimated that inflation could reduce the real value of the MFF by €74 billion over the seven-year period, but according to the European Parliament, the reinforcements proposed by the Commission may not cover the impact of inflation.
In its draft report, however, Parliament welcomes the fact that the European Commission’s proposal targets only the most urgent areas of concern within the existing framework and does not lead to a downward revision of the pre-allocated national envelopes.
Long-term support for Ukraine
Parliament welcomes the proposal for prolonged structural support for Ukraine anchored in the EU budget (see EUROPE 13201/9).
Parliament considers that such a longer-term instrument “is the only viable way of involving other donors and ensuring effective and targeted spending that meets the needs of Ukraine and its population”.
Migration challenges
Parliament welcomes the Commission’s proposal to increase the ceiling for Heading 6 (Neighbourhood and World) but regrets that the additional resources do not fully cover real needs.
It therefore believes that an additional reinforcement of €1 billion at current prices is essential to rebuild the NDICIGlobal Europe cushion and thus create the capacity to respond to emerging crises and needs.
It also believes that, in addition to the Commission’s proposal for an extra billion euros between 2025 and 2027 to implement the New Pact on Migration and Asylum (see EUROPE 13198/8), a further strengthening of Heading 4 (migration and border management) is needed.
STEP
As regards the development of a platform for strategic technologies (see EUROPE 13205/3), Parliament considers that this should serve as a “test bed” for a fully-fledged sovereignty fund during the next period of the MFF.
It stresses that, in order to achieve the strategic objectives of the STEP programme, an additional reinforcement of €2 billion at current prices on top of the Commission’s proposal in Heading 1 and €1 billion at current prices in Heading 5 is required.
It also reiterates its long-standing position that recurrent redeployment (from other funds) is not a viable means of financing the Union’s political priorities, and calls for all EU spending instruments to be integrated into the budget in “full respect of the principle of budgetary unity”.
EURI
Parliament notes that the amount programmed in the MFF for the reimbursement of borrowing costs related to the EURI (EU Recovery Instrument) is well below what is needed, with the Commission estimating a deficit of between €17 and €27 billion over the period covered by the MFF.
Parliament recalls that interest charges and debt repayment depend on market developments - they are not discretionary expenditure and therefore cannot be subject to an expenditure ceiling under an MFF without posing a direct risk to the EU budget.
It therefore insists once again that EURI’s reimbursement costs must exceed the MFF ceilings.
Responding to crises and emerging needs
Finally, Parliament calls for the budget’s capacity to respond to emerging crises and needs to be improved, highlighting the fact that the MFF has very little flexibility: currently, 99.6% of the EU budget is earmarked.
Parliament is therefore calling for an increase in the flexibility instrument and the SEAR (Solidarity and Emergency Aid Reserve). Lastly, it calls for an additional permanent special instrument to enable the EU budget to better adapt and respond rapidly to crises and their social and economic effects.
More generally, for Heading 1 (single market, innovation and digital technologies), Parliament calls for the ceiling to be increased by €2 billion in current prices compared with the Commission proposal; - €1 billion each for Headings 4 (migration and border management), 5 (security and defence) and 6 (neighbourhood and world); - €3 billion for the Flexibility Instrument; - €2 billion for SEAR.
To see the draft report dated 20 July, go to https://aeur.eu/f/8ct (Original version in French by Pauline Denys)