The Polish Presidency of the Council of the EU shared a working document with the Member States with a view to initial discussions on the next Multiannual Financial Framework (MFF) on Tuesday 18 February in Warsaw, at an informal meeting of the General Affairs Council.
According to the document published by Agence Europe, the new budget priorities and the question of their funding, the future of cohesion policy and the restructuring of the MFF around a more flexible, better targeted and streamlined EU budget (with fewer programmes) will be on the agenda for discussion.
What new funding sources? The Polish Presidency has made investment in defence a priority, alongside aid to Ukraine, preparations for enlargement and competitiveness. How can the EU’s defence be strengthened “not only for the long-term future but also for immediate needs” when repayment of Next Generation EU’s common debt begins in 2028? The Presidency stated that some Member States - such as Spain (see EUROPE 13578/3) - are defending the idea of a common debt or are talking about relying more on the European Investment Bank (EIB) and using other financing mechanisms.
Among these, the new own resources (NOR) will be at the heart of the forthcoming discussions on the next MFF. The Polish Presidency has encouraged its adoption in order to diversify sources of income. But the Member States are still divided on whether or not to include decisions on NORs in the overall agreement on the next MFF, warned the Polish Presidency. “The Commission has proposed baskets on NORs”, but so far the EU Council has failed to agree. According to several sources, only the EU’s Carbon Border Adjustment Mechanism (CBAM) would be accepted by the Member States (see EUROPE 13289/10). The Member States do not want to include mechanisms for which they already have revenue at national level. In their view, the NORs must be “compatible with the spirit of Protocol 28”, which stipulates that the regressive features of the own resources system must be corrected “for the least prosperous Member States”.
Cohesion Policy. Poland, the main beneficiary of the cohesion funds, pointed out that despite a “significant convergence” in economic and social cohesion, disparities remain between the major metropolitan areas and other regions, especially rural areas. 15 Member States benefit from the 'Cohesion Fund' as part of the EU’s 2021-2027 budget. “Only one of these countries has reached the EU average level of GDP per capita in purchasing power standards”, noted Poland. However, some minority Member States see the improvements as a reason to scale back cohesion policy. “The reduction in cohesion policy funding for Member States resulting from increased prosperity should be gradual and not abrupt”, warned Estonia, itself a beneficiary, in its position paper (see EUROPE 13578/3).
Budget restructuring. Poland has warned that the European Commission’s idea of organising the next budget around the “cash for reforms” model, as seen with the Recovery and Resilience Facility, will need to be clarified. In addition to the role of the regions to be preserved and the shortcomings linked to the control of funds, highlighted by the Court of Auditors (see EUROPE 13508/13), Poland has warned that certain Member States are asking for a “thematically closer link between the reforms and investments” or have expressed doubts about reforms that would concern areas “subject to unanimity voting in the EU Council (such as taxation)” or “subjects at the core of internal democratic dispute (pensions, labour market, etc.)”.
See the working document: https://aeur.eu/f/fim (Original version in French by Florent Servia)