While the standoff between Member States that are ‘Friends of Cohesion’ and the so-called ‘frugal’ countries over the size of the post-2027 EU budget has attracted much of the attention (see EUROPE 13891/3), the ‘green’ scope of spending under this future Multiannual Financial Framework (MFF) is another divisive issue. In this regard, the Council of the EU adopted, on Friday 26 June, a partial position on the ‘Performance’ regulation, which is to set the indicators and horizontal principles governing the whole of the 2028-2034 MFF (see EUROPE 13897/25).
This EU27 version was able to satisfy defenders of the planet on one major point: it maintained the principle of ‘do no significant harm’ (or DNSH), according to which budget spending must not ‘significantly harm’ the Union’s environmental objectives. Yet this principle is sharply criticised by several countries in the east of the Union, by Italy, as well as by most of the right-wing groups in the European Parliament.
Thus, the EU Council’s mandate was positively welcomed as “a pleasant surprise that will help us wage the battle to preserve this principle in the rest of the negotiations”, by MEP Jean-Marc Germain (S&D, French), rapporteur on the file within the European Parliament’s Committee on Budgets, whose position is not expected to be adopted before autumn 2026.
However, the robustness of the ‘DNSH’ principle is far from guaranteed in the EU Council’s position. It does indeed confirm that the Commission would have to provide guidelines on how this principle operates in an implementing act by 1 November. On the one hand, the Commission is called on to stick to “general criteria, in accordance with the principles of subsidiarity and proportionality”. On the other hand, the EU Council compromise considers from the outset that it is “not possible or appropriate to apply the principle [...] to the areas of migration and border management, as well as defence [...] and security”.
Furthermore, recital 5 of the mandate insists that the [Commission] guidelines should “specify in which cases Union environmental legislation is sufficient and [...] no additional assessment under the DNSH principle is required”.
This last point is one of the final additions that enabled the Cyprus Presidency of the Council to secure an agreement on 26 June, after an initial failure two days earlier, while Giorgia Meloni is in particular fiercely opposed to the ‘do no significant harm’ principle. However, the practical implications remain difficult to assess.
The same recital also asks the Commission to take account of “territorial specificities and the challenges faced by regions located on the eastern borders, in order to ensure proportionate application...”
The fate of this key principle of EU environmental policy is all the more uncertain in Parliament, where an agreement between the EPP and the far-right groups remains a possibility, as is the concern of socialist Jean-Marc Germain.
In fact, it was precisely such a united right-wing majority that made it possible to adopt the position of the Committee on Economic and Monetary Affairs (ECON), which was asked for an opinion on this regulation. Adopted on 24 June, ECON’s version suggests simply abandoning the ‘do no significant harm’ principle altogether.
However, the second rapporteur of the Committee on Budgets (BUDG), which is responsible for the substance, German Christian Democrat Niclas Herbst, appears for the time being to favour the option of an agreement with the pro-European political groups.
According to a source close to the discussions, the kind of concessions likely eventually to make the EPP group accept the DNSH principle would also include excluding research spending from it.
Meanwhile, on Thursday 2 July, it will be the turn of the Committee on the Environment (ENVI) to adopt its own opinion: this text should be based on a ‘von der Leyen’-type coalition and be far more ambitious in environmental terms.
Lastly, the question of the percentage of budget spending devoted to environmental policy will still have to be settled. The overall 35% target for both climate and the environment is placed in square brackets in the EU Council’s partial mandate, because this point will have to be decided in the broader negotiations on the figures.
While the EU Council provides in its mandate for the addition of an indicator to measure funding directed towards biodiversity, a separate spending target in this area does not appear in the text, despite requests from France to that effect.
Conversely, the mandate states that spending devoted to defence and security - which will make up a major part of the next European budget - is excluded from the calculation basis for the climate and environment spending target.
See the mandate: https://aeur.eu/f/mlm (Original version in French by Clément Solal)