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BackThe 2nd of May had been eagerly awaited by many in Brussels, as for months the Commission had named this day to present its proposal for the Multiannual Financial Framework from 2021 until 2027. Finally on Wednesday the day had arrived: Commission President Jean-Claude Juncker and the Commissioner for Budget and Human Resources, Günther Oettinger, presented the ideas of the Commission on the Budget from 2021 in the European Parliament. Based on EUR 1.28 billion, the EU Budget shall account for 1.11 % of the Gross National Income and shall thereby be higher than the current EUR 1.11 billion and 1.08 % respectively.
Over the last weeks and months, the Commissioner for Budget and Human Resources, Günther Oettinger, has announced the amount of Multiannual Financial Framework to be between 1.1 and 1.2 % of the Gross National Income. On 2nd May 2018, the Commission finally proposed 1.11 % and in doing so settled for a value at the lower end of the range. This may be rated as a first concession to the Member States, as in its Initiative Report the European Parliament had demanded an amount of 1.3 %.
In order to be less dependent on the direct payments of the Member States, the Commission acts on its announcement to increase own resources and proposes several relevant measures. Thus, parts of the income through the trading system of emission certificates as well as the Common Consolidated Corporate Tax Base shall directly flow into the EU Budget. Also the Plastic Tax , which has already been announced several times, shall be introduced, by making Member States contribute a national amount based on the weight of non recycled plastic packaging waste.
Major controversies are also to be expected in respect of rebates: not only Great Britain, whose gap in contributions due to Brexit has to be closed, but also other Member States are currently benefiting from a complex rebate system, which, in the opinion of the Commission should gradually be ended by 2026.
There are still two major expenditure areas on the side of expenses: on the one hand the Common Agricultural Policy and the Cohesion Policy on the other. The funds for agriculture shall be reduced by ca. 5 %; those of the Cohesion Policy even by 7 %. Compared to that, the funds for Erasmus+ shall be doubled and those for research programmes such as Horizon Europe shall be significantly increased. New is the emphasis on neighbourhood assistance, migration and border control, security and defence. In his speech before the European Parliament, the Commissioner for Budget and Human Resources Günther Oettinger, made a point of announcing his intention to spend 2 billion Euro on the defence industry in future. The number of people employed by Frontex shall be increased from 1,200 today to 10,000 by 2026.
The reaction of many MEPs to the Commission proposal was generally positive. However, the governments of several Member States, among them Austria, lodged a number of criticisms. Accordingly, one can expect extremely intensive and controversial negotiations. Whether Günther Oettinger's wish to finalise negations by Easter 2019 will be fulfilled remains to be seen.
From the point of view of the Chamber of Labour, the now upcoming negotiations have to ensure that it will be a key responsibility of the EU Budget to realise a social Europe. To achieve this, the share of the European Social Fund ESF has to be raised to at least 30 % instead of the current 24 %. Apart from that, the criteria for the subsidies has to be reformed, as the Gross Domestic Product per capita is not sufficient as a sole criterion. One should also not forget that the major part of the EU Budget is financed by contributions from employees and consumers and that this circumstance has to be reflected on the side of expenses.
Further information:
European Commission: Documents on the Multiannual Financial Framework
European Commission: Questions and Answers on the Multiannual Financial Framework