The EU’s long-term budget — efficiently delivering on priorities post-2020

 

SUMMARY OF:

Article 312 of the Treaty on the Functioning of the European Union (TFEU)

Communication (COM(2018) 98 final) on the EU’s new multiannual financial framework (MFF)

WHAT IS THE AIM OF ARTICLE 312 TFEU AND THE COMMUNICATION?

Article 312 TFEU requires that the multiannual financial framework (MFF) should ensure that the EU’s expenditure develops in an orderly manner and within the limits of its own resources. It also sets out the procedure by which the MFF is agreed.

This European Commission communication, presented prior to an Informal EU Leaders’ meeting in February 2018, sets out various options for a new long-term budget designed to deliver efficiently on the EU’s post-2020 priorities and looks at the financial consequences of these options.

KEY POINTS

The EU budget is very different to EU countries’ national budgets — it is primarily an investment budget, has a long-term planning horizon and must always be in balance.

The Commission’s MFF proposals, to be presented by May 2018, are shaped by the principle of European added value, i.e. the value resulting from EU spending which is additional to the value that would have been otherwise created by EU countries if they had acted alone.

The communication points out that the Informal Leaders’ meeting is both timely and essential. The first step is to define what Europe wants to do together and agree on priorities. The next step will be for them to equip the EU with the appropriate financial means to achieve these priorities.

The communication lists a series of policy choices and seeks to quantify their financial impact.

2 examples:

• If EU countries commit to a pledge that they have often made to improve the protection of the EU’s external borders, this would cost between €20 and €25 billion over 7 years, and up to €150 billion for a full EU border management system.
• Looking at supporting the mobility of young people, there is also strong support for the need to step up mobility and exchanges, including through a substantially extended Erasmus+ programme. Depending on the level of ambition, several scenarios could be envisaged. Doubling the number of young people in the EU participating in Erasmus+ would require an investment of €30 billion over 7 years. Providing an ERASMUS+ opportunity for 1 in 3 young people would require a budget for the 2021-2027 period in the order of €90 billion.

The communication also discusses:

• doing more with less through more efficient financial instruments and the importance of guarantees;
• increasing flexibility to adapt the long-term budget to new needs and react swiftly to unforeseen events, for example by making the most of decommitted funds* and the possibility of creating a reserve;
• modernising the EU budget, including by making the link between the goals of the EU budget and the way it is funded stronger, making use of possible new own resources;
• the possibilities to strengthen the link — often referred to as ‘conditionality’ –— between EU funding and respect for the EU’s fundamental values.

The communication recalls that the final decisions on the MFF will be for the European Council to take, with the consent of the European Parliament.

The communication also underlines the importance of the right timing: agreement on the next MFF in 2019 would send a signal of a strong and united Europe of 27 that is able to deliver convincingly and would also ensure predictability and continuity of funding to the benefit of all.

BACKGROUND

The Commission’s communication follows on from:

• the Bratislava declaration and roadmap of September 2016 and the Rome Declaration of March 2017 when the 27 EU leaders agreed on a positive agenda for the EU countries and
• the Commission’s White Paper on the Future of Europe and its Reflection Paper on the Future of EU Finances, both published in 2017.

For more information, see:

• MFF post 2020 (European Commission).

KEY TERMS

MAIN DOCUMENTS

Consolidated version of the Treaty on the Functioning of the European Union — Part Six — Institutional and financial provisions — Title II — Financial provisions — Chapter 2 — The multiannual financial framework — Article 312 (OJ C 202, 7.6.2016, pp. 182-183)

Communication from the Commission to the European Parliament, the European Council and the Council — A new, modern Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020 — The European Commission’s contribution to the Informal Leaders’ meeting on 23 February 2018 (COM(2018) 98 final, 14.2.2018)

RELATED DOCUMENTS

Reflection paper on the future of EU finances (COM(2017) 358 final, 28.6.2017)

White Paper on the future of Europe — Reflections and scenarios for the EU27 by 2025 (COM(2017) 2025 final, 1.3.2017)

last update 09.04.2018