Almost two months after the European Parliament's Committee on Budgets has adopted the two initiative reports on the Position on the Multiannual Financial Framework (MFF) and the Reform of the European Union’s System of own resources, the plenum too has adopted both reports with a large majority on March 14. In doing so, Parliament has underpinned its perspective as to how it imagines the Multiannual Financial Framework post 2021: the EU shall be provided with sufficient funds to enable it to meet future challenges. By increasing its own resources, the EU Budget shall be less strongly bound to national budgets.

During the final debate on the initiative report by Jan Olbrycht (EPP) and Isabelle Thomas (S&D) on the Position of Parliament on the Multiannual Financial Framework (MFF) as well as on the report by Gerard Deprez (ALDE) and Janusz Lewandowski (EPP) on the Reform of the European Union's System of own resources, the representatives of the two largest factions in the EU Parliament, EPP and S&D, agreed: the EU needs a solid budget for the challenges, which it will have to meet over the coming years.

An important indicator in the discussion on the MFF is the total amount of the MFF in relation to the Gross National Income (GNI) of the Member States: whilst the EU Budget in the current Financial Framework is almost exactly 1 % of GNI, a majority in Parliament demands an increase to 1.3 %. The rapporteurs justified the demand for this significant increase by arguing that in order to continue the Common Agricultural Policy and the Cohesion Policy, which so far accounted for more than 70 % of expenditure, one would also require funds in future. In addition there are important policy areas such as Erasmus+, COSME as well as the research policy, whose funds shall be increased. Apart from that, the rapporteurs emphasise the new challenges of the EU in respect of security and defence, which, from Parliament’s point of view would result in a necessary increase to 1.3 % of the Gross National Income.

With regard to income, the issue of own resources will present the EU with intensive discussions. Parliament here too has taken a clear stance: currently, the EU Budget consists of about 70 % contributions by the national states. According to Parliament’s point of view, this share shall be reduced by providing options for new own resources, which are directly related to the European Added Value. Rapporteur Deprez for example pointed out that Parliament would not agree to a Multiannual Financial Framework, if no opportunities for new own resources would be provided for. The currently granted rebates for Member States shall also be cancelled.

Commissioner Günther Oettinger, who is in charge of the EU Budget, pointed out in Parliament that Commission and Parliament would largely agree on many aspects. He could imagine a budget cap of 1.3 %. However, the Commission will probably suggest a figure between 1.1 and 1.2 %. He emphasised the importance of the cohesion programmes to reduce the economic differences with the Union: whilst the Gross Domestic Product in the EU 28 is on average 28,000 Euro per capita, it is just a tenth in Bulgaria. Commissioner Oettinger regards it as unacceptable for this gap to continue, a reason why cohesion programmes were needed.

From employee point of view, measures to reduce economic and social differences have to be welcomed. In particular direct investments in people and their living conditions, above all education, healthcare, equality and social inclusion, have to be supported and expanded. Further priorities have to be the continuation of the Youth Guarantee and targeted measures to integrate refugees – in particular in the labour market.

In its Position on the European Structural policy post 2021 and the Multiannual Financial Framework, the German Trade Union Confederation (DGB) also declares that the EU Budget had not to be weakened but strengthened. He is opposed to cuts in respect of current social and structural policy responsibilities and the cohesion policy respectively. In doing so, he criticises that until now Europe’s industrial and structural policy challenges had been given insufficient consideration. From the point of view of the DGB, financing through Public-Private-Partnership projects (PPP) should also be rejected because tax payers would be liable in form of loss compensation and loan loss guarantees respectively.

The Commission’s concrete proposal on the structure of the MFF will be presented on 2 May 2018.

Further information:

AK EUROPA: Commission presents contribution to the future budget of the Union of 27

AK EUROPA: EU Parliament voices its initial thoughts on the Multiannual Financial Framework

A&W Blog: EU Budget after 2020: first markers on European cohesion and structural policy set out

DGB: Statement of the German Trade Union Confederation on the European structural policy post 2021 within the context of the Multiannual Financial Framework debate

European Parliament: Position on the Multiannual Financial Framework after 2020

European Parliament: Report on the Reform of the European Union’s System of own resources