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One of the key issues, which will keep Brussels very much occupied over the coming months, is the budget of the European Union. It is the sixth time that a Multiannual Financial Framework (MFF) has to be negotiated between the European institutions, based on which the EU’s budgetary guidelines will be laid down for a period of seven years. The current Multiannual Financial Framework is still in place until 2020, which is the reason why a new MFF has to be adopted. Whilst the Commission announces its proposal for May 29, the Budget Committee of the European Parliament is already working on two Initiative Reports, based on which the European Parliament voices its thoughts on MFF in advance.

 

On January 24, 2018, MEPs of the Budget Committee (BUDG) of the European Parliament discussed with Commissioner Günther Oettinger, who is responsible for Finance, for the first time the MFF from 2021. In doing so, Parliament formulates within the framework of two Initiative Reports its ideas with regard to the EU Budget for the coming years: A Report on the MFF in General and a second Report on the Reform of the Systems of Own Resources. It clearly transpired that the European Parliament wants a stable budget, on the one hand to be able to fulfil existing tasks and to master new challenges of the future on the other.

 

The rapporteurs of the European Parliament on the MFF in General, Jan Olbrycht and Isabelle Thomas, made it clear that from their point of view, existing political areas of activity had to be sustained. These include first and foremost expenses for cohesion policy and agriculture. They demand that funds for these areas are not reduced; apart from the automatic cut in expenditure due to Brexit. Apart from that, in their opinion, the Budget has to provide additional funds for new challenges, such as fighting terrorism and dealing with migration. Overall, they hope that funds will not be earmarked in order to ensure a flexible budget. External funds shall be reintegrated in the budget. Finally, they demand a budget amounting to 1.3 % of the European Gross National Product.

 

MEPs Janusz Lewandowski and Gerard Deprez, rapporteurs on the Reform of the Systems of Own Resources, point out that the European Parliament would take a sympathetic view of increasing own resources in the budget. They appeal to the Member States to provide the EU with a budget, which will enable it to take the measures, which the EU's population expects. Hence, they see opportunities for own resources in the digital area or with regard to environmental taxation. An example for this is the Plastic tax, which the Commission brought into play in the previous week. At the same time, they voice their hopes that such new levies have to be meaningful and targeted to avoid loopholes and any shifting of companies to third countries.

 

Günther Oettinger, Commissioner for Budget and Human Resources shared similar views regarding many points the rapporteurs had made. In respect of the reduced income of ca. 12 billion Euro, which is due to Brexit, he aims at saving half of these funds and to balance the other half by new funds provided by the 27 remaining Member States. However, he sees the necessity to basically make “measured” cuts to all current programmes, in particular with regard to cohesion and agricultural policies. Only successful programmes with “excellent added value” shall retain or have their funds increased, such as Erasmus+ or its satellite programme Galileo. Added to this are new challenges for border protection, fighting terrorism, migration, defence and foreign aid, which have to be reflected in the new MRF. He regards an increase of the European Budget to 1.3 % of the Gross National Product as not being realistic. He assumes that the institutions will agree a figure between 1.1 % and 1.2 %.

 

The discussion surrounding the MFF from 2021 shows that it does not only deal with the budget in itself but with the entire orientation of the EU after Brexit and the issue of which tasks and focus areas the EU should take over. The Chamber of Labour will monitor any further process and raise awareness for the interests of employees and consumers to ensure that all groups of the population will enjoy an added value and that not only individual groups of society benefit from the measures and programmes.

Further information:

European Parliament: Draft Report on the next MFF

European Parliament: Draft Report of the European Union’s system of own resources

European Commission: Multiannual Financial Framework