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The battle for the EU's long-term budget

EU budget: Parliament accepts negotiated MFF 2014-2020 package

 
Three EP negotiators of the MMF (R-L) Lamassoure, Kalfin and Dehaene - © European Union 2013 - European Parliament   Three EP negotiators (from right to left): Lamassoure, Kalfin and Dehaene

Parliament endorsed the outcome of its negotiations with the Council on the EU's long-run budget, the Multiannual Financial Framework (MFF) for 2014-2020 on Wednesday 3 July.


Negotiations had led to an outcome on 19 June that Parliament deemed insufficient, but they resumed last week in the run-up to the European Council. EP president Martin Schulz, lead EP negotiator Alain Lamassoure (EPP, FR), Irish prime minister Enda Kenny, Irish foreign minister Eamon Gilmore and European Commission president Jose Manuel Barroso struck an agreement that won the backing of the main political groups in Parliament and the member states.


Making the best use of every euro


Parliament secured the key priorities set out in its negotiating mandate. These include close to full flexibility to move unpaid funds (payment appropriations) between years and large flexibility for commitments, both between years and categories of expenditure, to make it easier to finance youth employment and research policies, the Erasmus for all programme and support for small and medium-sized firms. This flexibility is needed to ensure that every EU budget euro is used where it is most needed, especially now that annual budgets will decrease.


Revision starting in 2016


A key achievement for Parliament was to insert a "revision clause" in order to give the next Parliament and Commission a say on a budget that they would otherwise be stuck with until the end of their terms.


The Commission will present a review of the functioning of the MFF, taking full account of the economic situation at the time. Particular emphasis will be given to aligning the future duration of the MFF - currently seven years - with the 5-year political cycles of the EU institutions. The review will be accompanied by a legislative proposal for revision.


Closing 2013 payments gap


The Council stated that it would deliver on its promise to settle the outstanding payments for 2013, estimated at €11.2 billion. Member states' economy and finance ministers will take a formal decision on the first tranche of €7.3 billion by 9 July at the latest and will decide in early autumn on a second tranche. This was an important issue for Parliament as it wants to ensure that the 2014 budget - the first under the new MFF - is not eroded by old unpaid bills. Parliament will not give its consent to the MFF Regulation or will not adopt next year's budget until this new amending budget, covering the remaining deficit as identified by the Commission, has been adopted by the Council.


A billion extra for "aid for the most deprived"


In the final talks it was agreed that the Fund for European Aid to the Most Deprived would be increased from €2.5 billion to €3.5 billion. The additional €1 billion can be used by member states on a voluntary basis for the food distribution scheme.


High-level Group on own resources


A high-level group of members of the three institutions will review the current EU "own resources" system, guided by the overall objectives of simplicity, transparency, equity and democratic accountability. National parliaments will be invited to an inter-institutional conference in 2016 to assess the outcome of this work on the basis of which the Commission will assess whether new own resources for the next MFF are appropriate.


What's next?


The outcome of the negotiations will be enshrined in a regulation and an accompanying inter-institutional agreement to which Parliament will have to give its consent by a majority of half of its constituent members plus one. Parliament is ready to put the MFF Regulation and the new Inter-institutional Agreement to the vote in the early autumn, as soon as the necessary technical and legal conditions for the finalisation of the relevant texts are fulfilled, so that the latter reflect the overall agreement reached between the Council and Parliament.


Press release originally published on 3 July 2013