The Multiannual Financial Framework for the period from 2021 to 2027 is about 1,279 billion Euro - this is equivalent to 1.11 % of the Gross Domestic Product. However, a significant imbalance can already be observed with regard to financing this budget: based on their tax payments, employees and consumers are already contributing disproportionately to financing the EU Budget. Hence, what is urgently needed within the meaning of a fair volume of funds is a fundamental new structure on the revenue side of the EU Budget. Companies have to act more responsibly: for example by contributing to an EU-wide regulated corporate profits tax and a separate profits tax for digital companies respectively and/or by the introduction of an EU-wide Financial Transaction Tax.

The richest 10 % of Europeans own about half of the net equity, whilst 90 % of the population shares the other half. Hence, the level of unequal distribution that exists in the European Union is massive, not only between Member States, but also in society. The decision-makers in the EU overall have to make a much greater effort to address this issue. In addition, the financial and economic crisis has resulted in an exacerbation of the social situation. Therefore, from the point of view of the Chamber of Labour, the budget of the European Social Fund must be increased significantly. In any case, a share of 10 % of the entire EU Budget is required to adequately meet the social, integration and labour market policy challenges of the EU, in particular in respect of combating youth unemployment and the integration of migrants. The currently planned minimum increase is by no means adequate - also in view of the consolidation of five funds (the European Social Fund, the Youth Employment Initiative, the Aid Fund for Disadvantaged People, the Programme for Employment and Social Innovation as well as the Health Programme).

The subsidies from the EU Budget must have a clear added value for the European population and the European Union respectively. From the BAK's point of view, especially measures, which result in creating jobs or which strengthen social cohesion, represent a particularly high added value. However, the European funds for combating climate change and for achieving the targets of the Paris Agreement on climate change also fulfil the principle of the European Added Value. Due to the extremely severe reduction in the number of agricultural enterprises and the environmental problems caused, the BAK demands an appropriate cut of the European Agricultural Guarantee Fund (EAGF) an a significant increase (reallocation) the funds of the European Agricultural Fund for Rural Development (EAFRD). At least 50 % of the funds for rural development should be reserved for cross-sector measures such as health centres, care and kindergartens.

If the Commission has its way, the negotiations on the MFF should be complete before the EU elections in May 2019. However, whether it will be possible to adhere to this ambition timeframe is still wide open, as the current positions of the Member States are still far apart. Concerning budget issues, the European Parliament only has a limited opportunity of giving input; however, its work should be largely completed before the end of the year. The Chamber of Labour will continue to intensively monitor the negotiations to achieve a more social Europe in the next decade.

Further information:

AK Position Paper: EU Multiannual Financial Framework 2021 – 2027: A budget that unites Europe

AK EUROPA: Commission proposes increase of the EU Budget from 2021

AK EUROPA: EU must take greater account of gender budgeting

A&W Blog: The new EU Budget: a budget for the future?