The European Parliament,

–  having regard to Article 314 of the Treaty on the Functioning of the European Union,

–  having regard to Article 106a of the Treaty establishing the European Atomic Energy Community,

–  having regard to Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020(1),

–  having regard to the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management(2),

–  having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002(3),

–  having regard to its legislative resolution of 25 November 2015 on the joint text on the draft general budget of the European Union for the financial year 2016 approved by the Conciliation Committee under the budgetary procedure(4),

–  having regard to the general budget of the European Union for the financial year 2016(5) and to the two related joint statements agreed between Parliament, the Council and the Commission(6),

–  having regard to the joint statement for a payment plan 2015-2016(7) agreed on 19 May 2015,

–  having regard to the Commission’s European Economic Forecast (Autumn 2015)(8),

–  having regard to the Commission’s Annual Growth Survey for 2016(9),

–  having regard to Title II, Chapter 8 of its Rules of Procedure,

–  having regard to the report of the Committee on Budgets (A8-0036/2016),

A.  whereas the 2017 budget should lay down the path towards economic growth and job creation, in the context of a fragile economic recovery jeopardised by the situation in emerging global markets and ongoing geopolitical tensions;

B.  whereas the 2017 budget will be affected by the evolving migration and refugee crisis;

C.  whereas the 2017 budget will coincide with the mid-term revision of the multiannual financial framework (MFF);

D.  whereas the balance between internal demand and external trade makes the EU to a certain extent economically dependent on global developments;

General remarks

1.  Notes that the Union budget has proven to be a crucial resource in tackling recent crises and responding to needs that had not been necessarily anticipated during the negotiation of the MFF 2014-2020, such as the European Fund for Strategic Investments (EFSI), the migration and refugee crisis or geopolitical tensions in Europe’s neighbourhood causing a number of serious challenges and emergencies, while within the EU the pace of economic recovery and investment is below potential and an investment gap still persists;

2.  Underlines that the limited capacity of the Union budget to tackle these crises is at this stage primarily the result of the use of all means available agreed on in the MFF negotiations, and particularly of the use of special instruments such as the flexibility instrument; recalls Parliament’s decisive role in shaping those instruments during the MFF negotiations; highlights, however, that if the crises continue to worsen even the full activation of the existing flexibility provisions will be insufficient to address the problem; urges the Council, in this context, to reconsider its position on the question of budgeting the MFF special instruments so as to alleviate the constraints weighing on the Union budget; reiterates in this connection its longstanding position that the payment appropriations for the special instruments (the flexibility instrument, the EU Solidarity Fund, the European Globalisation Adjustment Fund and the Emergency Aid Reserve) should be calculated over and above the MFF ceilings, as is the case for commitments; expects this issue to be resolved in the context of the mid-term revision of the MFF;

Budgeting taking into account economic forecasts and consistent with the European Semester for economic policy coordination

3.  Notes the Commission’s European Economic Forecast (Autumn 2015), which indicates a modest recovery, although one still below the EU’s growth potential; stresses, however, that this recovery has to be built upon by enhancing the growth fundamentals in order to boost job creation and return to full employment, notes that long-term and very long-term unemployment, notably in the Union's poorest regions and among young people, are still at worrying levels, and the EU is having difficulties with industrial restructuring; notes that disparities in terms of economic development between European regions and Member States persist, and points to the gap between the poorest and the richest of Europeans; notes, furthermore, the appearance of new challenges, such as the risk of slowdown in emerging market economies and global trade, with particular pressure arising from volatility on Chinese markets, the need to tackle the migrant and refugee crisis, and persisting geopolitical tensions;

4.  Notes, additionally, the Commission’s Annual Growth Survey for 2016; strongly believes that boosting investment, including through a better coordinated increase in public and private investment with a focus on the Europe 2020 targets, is a proper policy response with a view to a more balanced economic policy; believes that those two elements should be taken into consideration in the preparation of the draft budget for 2017 insofar as this should help identify priorities within an economic context; calls, consequently, for more synergies between the Union dimension of the European Semester for economic policy coordination and the Union budget, which is also the cornerstone for a stable euro area;

5.  Welcomes, in this context, the Commission’s efforts to enhance the use of the European Structural and Investment Funds in support of key priorities highlighted in the country-specific recommendations; takes note of the Commission’s proposal on the establishment of the Structural Reform Support Programme, and urges the Commission to guarantee that funding will be deployed with a view to strengthening economic, social and territorial cohesion in line with Article 174 TFEU;

6.  Regrets that the Union budget has in recent years been a collateral victim of Member States’ duplicitous behaviour, which has led them to consider their contribution to the Union budget as a burden and to treat it as an adjustment variable; underlines that the EU budget, as an investment budget, can bring particularly strong added value by boosting growth, competitiveness and job creation in the Member States; draws attention to the need for Member States’ contributions to the Union budget not to be treated as an adjustment variable subject to macroeconomic conditions; reiterates also the added value of the Union budget in terms of synergies and economies of scale; emphasises the special situation of isolated and peripheral regions;

7.  Notes and regrets the fact that corporate tax avoidance has caused huge losses of tax income for Member States, and therefore a reduction in their contributions to the EU budget; considers moreover that such unfair tax competition in some cases means GDP transfer from one Member State to another and GNI transfer to non-EU tax havens, thus reducing aggregate Member State contributions to the EU budget;

Overcoming crises

8.  Highlights the fact that the Union has had to face numerous crises in recent years to which a holistic solution should be found; points out that the refugee crisis, in the Union as well as in neighbouring countries, arising from the Syrian conflict has not been solved yet; notes that this crisis escalated in 2015 and has continued in 2016, with a sudden and massive increase in the numbers of refugees and migrants fleeing to the Union to seek asylum; stresses that this has further impacted on the internal crisis; underlines that the Union budget provided immediate response to the crisis and should be strongly revised upwards in order to effectively finance the implementation of EU policies to deal with this crisis, and should serve as part of a European solution to overcome this emergency in the future;

9.  Underlines that the 2017 budget will be impacted by internal and external security challenges, which may also take the form of terrorist threats or extremism, and by the implementation of the shared agenda between the Union and the Member States aimed at securing an EU area of freedom, security and justice; stresses in this context the importance of the EU budgetary instruments, such as the Internal Security Fund (ISF), in order to address the most crucial challenges, including through the strengthening of preventive measures as well as cross-border operational cooperation;

10.  Welcomes the adoption of the EFSI, which will serve as one of the main tools for enhancing investments at EU level and will contribute to stimulating the creation of jobs; notes with satisfaction that a significant number of projects and EIF operations have already been approved and synergies between the EFSI and Horizon 2020 could be detected; calls on the Commission to actively facilitate synergies between different EU funds and set up a tracking system to identify cases of combination of EU funding; insists on the need to properly apply the scoreboard; encourages Member States and private entities to make full use of the financial resources available through the EFSI; recalls that the Union budget provides the backbone of the investment plan by making available the EUR 8 billion required in commitment and payment appropriations for the provisioning of the EFSI guarantee fund, out of which a total of EUR 3,38 billion has already been mobilised in the 2015 and 2016 budgets; recalls that the Global Margin for Commitments was fully utilised for this purpose in 2016, and notes that, according to the EFSI legislative financial statement, the Commission foresees a similar scenario for the draft budget for 2017; reiterates its commitment to reinforce Horizon 2020 and the Connecting Europe Facility through the annual budgetary procedure, in order to compensate the cuts agreed during the EFSI negotiations as much as possible;

11.  Stresses the importance of Horizon 2020, COSME, programmes funding SMEs, Erasmus+, and programmes and policies that support the development of an innovation-friendly environment and contribute to the success of Europe 2020; notes with satisfaction the high absorption rates of Horizon 2020 programmes, but is concerned at the worryingly low average success rate of project financing, which leaves many excellent projects unfinanced; calls on the Member States to explore possibilities of taking over those Horizon 2020 projects that received a positive evaluation but cannot be cofinanced owing to unavailability of budget funds; recalls the important role of small and medium-sized enterprises as the backbone of the European economy; underlines that the EU budget should further facilitate SMEs’ access to markets and funding through existing programmes such as COSME; reiterates that the Union's future is connected to its power to innovate in key strategic sectors in order to achieve European competitiveness in the global economy;

12.  Considers the Youth Employment Initiative (YEI), in particular, to be a fundamental contribution to the Union’s priority objective for jobs and growth; reiterates its commitment to continued funding for this programme with a view to scaling it up and thereby offering a greater number of young people, including young migrants entering the EU, the prospect of effectively entering the labour market by receiving a good quality offer of employment, continued education or apprenticeship; regrets that during the negotiations on the EU budget for 2016 no new commitments were allocated to further finance the YEI, while youth unemployment remains at its highest rates in the EU; recalls that this objective must be considered together with the need to promote mobility among young people, as supported by the Erasmus+ programme; highlights the importance of the joint statement of the three institutions (Parliament, the Council and the Commission) on the budget for 2016 that states that 'reducing youth unemployment remains a high and shared political priority’, and that to this end the three institutions ‘reaffirm their determination to make the best possible use of budgetary resources available to tackle it, and in particular the Youth Employment Initiative’; notes that despite the initial delays in the implementation of this initiative and the continuing procrastination in designating authorities for YEI operational programmes in many Member States, the current implementation figures indicate a full absorption capacity; calls on the Commission to present its evaluation of the YEI at the latest by the end of April 2016, and at all events in time for the inclusion of a prolongation of the programme in the EU budget for 2017; stresses that a permanent solution for the funding of YEI through new commitment appropriations up to 2020 will be part of the mid-term revision of the MFF; underlines, in this context, the importance of the provision of the European Global Adjustment Fund (EGF) concerning support for young people aged up to 25 who are not in employment, education or training (NEETs), in equal numbers to workers receiving support in regions with high youth unemployment;

13.  Highlights that according to the recent report by Save the Children, 27 million children are currently at risk of poverty in the EU; recalls Parliament’s resolution of 24 November 2015(10) advocating the establishment of a child guarantee in order to lift children out of poverty, provide for an environment suitable for their personal development, and avoid their being exploited and socially excluded; welcomes the efforts of those Member States which have recently adopted child poverty reduction strategies with a view to reducing overall poverty levels, including for children and young people; calls on the Commission to ensure that Member States respect the UN Convention on the Rights of the Child and the principles of the Charter of Fundamental Rights of the European Union; considers education, childcare, health services, housing and security to be basic needs to which every European child has the right, including those travelling to Europe among refugees and migrants;

14.  Recalls the importance of European agencies in ensuring the implementation of European legislation and thereby accomplishing EU policy objectives related to competitiveness, growth and employment on the one hand, and in managing the current migration and refugee crisis on the other; insists, therefore, that adequate financial and human resources will be provided for both administrative and operational expenditure to allow the agencies to fulfil their assigned tasks and deliver the best possible results; recalls, with regard to the migration and refugee crisis, the increases in staff and appropriations for the Justice and Home Affairs Agencies in the 2015 and 2016 budgets; underlines, however, that further increases will be necessary in the 2017 budget to enable those agencies to cope with their increased workload and additional tasks; calls, furthermore, on the Commission to provide updated and consolidated information and a medium and long-term strategy regarding those agencies;

15.  Is concerned at the persistence of socio-economic inequalities and the difficulties in reaching the EU's goal of socio-economic convergence; highlights that the Union budget should promote policies of convergence, integration and cohesion, based on safeguarding and promoting entrepreneurship, the creation of decent, quality and stable jobs, sustainable use of natural resources and the protection of the environment by pursuing its objectives under the Europe 2020 strategy for smart, sustainable and inclusive growth; is particularly concerned at the lower than expected implementation of payment appropriations for the Fund for European Aid for the Most Deprived (FEAD);

16.  Recognises the importance of the school milk and school fruit programmes, and suggests analysing to what extent an increase in their funding would be possible; recalls the numerous crises in recent years, among them the agricultural crisis in particular due to the effects of the Russian embargo; urges further work to make EU agriculture climate-proof while overall reducing agricultural GHG emissions and ensuring the economic viability of the sector;

17.  Acknowledges that in spite of the mobilisation of significant budgetary means spread over 2015 and 2016 to address the migration and refugee crisis, a solution has still not been found, be it internally within the Union or externally in refugees’ countries of origin; stresses, however, that the budgetary means are insufficient and that substantial additional financial means are required to address this crisis, as the increase in numbers of refugees and migrants cannot be considered a temporary phenomenon; highlights that longer-term solutions should be sought, not only in the annual budgetary procedure, but also in the upcoming interim revision of the MFF; urges the Commission to present a medium- and long-term political and financial plan to deal with the migration crisis and its impact on the 2017 budget; notes that all EU-funded measures should be regarded as investments to tackle the refugee and migration challenges; highlights the need to address the root causes of the migration phenomenon by improving living conditions, particularly through better education and medical services as well as enhanced support for investments in infrastructure in migrants’ countries of origin or countries where they first seek shelter; stresses that the financing of the migration and refugee crisis should not undermine or hinder the implementation of other important EU policies; underlines in this light that solidarity is an underlying principle of the EU budget; is concerned that in the refugee crisis solidarity is being manifested unevenly across the Member States; reiterates the call for the Commission to come up with a proposal as to how the EU budget can prompt Member States towards a more balanced approach to solidarity;

18.  Expresses its deep concern at the lack of adequate protection for unaccompanied minors all along the route to a safe place and calls for a thorough investigation into the case of the 10 000 missing children reported by EUROPOL;

19.  Stresses the importance of enhanced financing for resettlement schemes, relocation procedures and return operations, notably under the Asylum, Migration and Immigration Fund (AMIF), in order to achieve an effective European asylum and migration policy while preventing and reducing irregular migration; underlines the need to create possibilities within the EU budget in order to develop resettlement areas and safe zones on the African continent and in the Middle East, in cooperation with the African Union, the Arab League and UNHCR;

20.  Notes the setting-up of the Union Regional Trust Fund in Response to the Syrian Crisis and of the Emergency Trust Fund for stability and addressing the root causes of irregular migration and displacement of people in Africa; urges the Member States to stand by their promises and match the EU contribution to these funds, which amounts to EUR 2,3 billion; is deeply concerned at the low level of financial contributions from Member States; stresses that further financial efforts will be needed to provide humanitarian assistance along the transit routes and to manage the challenges posed by increasing numbers of refugees; points out that lack of adequate funding for humanitarian aid, including for health and education measures in camps, has promoted more refugees to embark on the risky journey to the EU; recalls that the above funds were created in response to the lack of flexibility and funding in the EU budget; insists that the actions undertaken to tackle the migration and refugee problem should not come at the cost of the EU’s development policies in other areas, and that the accountability rules for all EU actions in this field have to be followed;

21.  Underlines that the Member States have reconfirmed their commitment, at the informal meeting of EU Heads of State and Government held to discuss migration on 23 September 2015, the European Council of 15 October 2015, and the Valletta summit of 11-12 November 2015; attaches utmost importance to the Council's public statements concerning the response to the unprecedented migration and refugee crisis; expects the Council to fulfil the expectations raised by its own statements and decisions, particularly related to Member States’ contributions matching the EU budget support to the Madad and the Africa Trust Funds, as well as fully implementing the Commission's proposal on the Refugee Facility for Turkey; acknowledges that some Member States additionally contribute via other humanitarian aid schemes, such as the World Food Programme and UNHCR;

22.  Welcomes the principle and objectives of the envisaged EUR 3 billion Facility for Refugees in Turkey, and urges each Member State to fulfil its political pledges and provide adequate financial support in the package of the Facility for Refugees in Turkey; is strongly determined to apply all political and institutional means of pressure in order to ensure that Member States deliver on their commitment regarding their contributions to the Regional Trust Fund for Syria, the Emergency Trust Fund for Africa and the Refugee Facility for Turkey; expects the Commission to explain how the Union contribution should be made available within the respective ceilings of the Union budget for 2016 and 2017; criticises the fact that the Council and Commission excluded Parliament from the deliberations on the setting-up of the facility and the mobilisation of the Union’s contribution, as shown by the Commission’s announcement of its intention to finance the Union contribution by redeployment from the recently adopted Union budget for 2016 and by pre-empting the margins of the 2017 budget; underlines, in addition, the need to increase the impact of EU external spending; calls on the Commission to draw up proposals as to how the synergies between the EU external funding instruments can be enhanced and their strategic approach made more coherent; considers those trust funds, as well as the Facility for Refugees, to be neither inside nor outside the EU budget, therefore lacking the necessary accountability and democratic process prescribed by the Community method, and intends therefore to closely monitor the setting up of the funds and facility and their implementation; underlines that the above actions are a clear infringement of Parliament’s rights as an arm of the budgetary authority;

23.  Draws attention to the fact that the geopolitical situation in the Eastern Neighbourhood is fragile, and calls on the EU to provide enhanced support to countries that are currently implementing Association Agreements, in order to advance reforms and ensure the deepening of the relations between the EU and the respective countries;

Payments

24.  Recalls that in the budgets for 2015 and 2016 the Commission has in many cases refrained from asking for additional payment appropriations for a number of its crisis responses (frontloading of EUR 2 billion for Greece, first initiatives in the area of migration), instead reverting to the redeployment of already existing resources; stresses that this has increased the burden on payment appropriations in 2016 and beyond, potentially re-creating a situation where appropriations may not be sufficient to meet the actual needs of financial programmes across headings, impacting project leaders and citizens directly; is concerned that this situation, added to the delay in starting the implementation of programmes under shared management, could re-create the conditions which led, at the end of the last MFF, to an unprecedented level of RALs and an unsustainable backlog of outstanding payment claims; recalls its longstanding position that unforeseen payment needs should be financed with fresh appropriations;

25.  Calls for the full implementation of the joint statements on payments agreed between Parliament, the Council and the Commission in 2015 and 2016; recalls the commitment to hold in the course of this year at least three interinstitutional meetings on payments in order to take stock of payment implementation and revised forecasts; notes that the Commission has announced a 2015 end-of-year backlog of EUR 8,2 billion, which is almost half of what it had originally anticipated; intends to raise this issue at the first interinstitutional meeting on payments in March 2016, in order to determine the causes of this divergence and the possible long-term impact on payment forecasts; expects that in its reading of the 2017 Union budget the Council will take on board and fully respect the amounts confirmed at the April 2016 meeting; urges the Commission to provide Parliament and the Council, as agreed in the joint statement adopted in the framework of the budgetary procedure for 2016, with longer-term forecasts for the expected evolution of payments up to the end of the MFF 2014-2020, in order to avoid a payment backlog in the second half of the MFF;

26.  Highlights that the implementation of the European Structural and Investment Funds is expected to reach cruising speed in 2017, and warns against an underbudgeting of payment appropriations to match this increased absorption level; encourages the Commission to set the payments at the necessary levels in its draft budget; expresses its concern at the late adoption of the operational programmes and at the risk of build-up of a new backlog of unpaid bills over the second half of the MFF; encourages the Commission to work actively with the Member States, and urges the latter to make every effort to ensure the swift designation of programme authorities, the absence of which has been the main cause of the current delays; welcomes the Commission's availability to collaborate closely with Member States upon request, in particular regarding the adjustment, as appropriate, of the operational programmes to allow for a stronger synergy between the European Structural and Investment Funds and the domestic challenges linked to the refugee crisis;

Further issues of particular relevance

27.  Recalls the importance of gender mainstreaming, which should underpin Union policies as a horizontal principle; calls on the Commission to put the principle of gender mainstreaming into practice when preparing the draft budget for 2017, as appropriate;

28.  Welcomes the agreement reached on 12 December 2015 in Paris by the 196 parties to the UN Framework Convention on Climate Change on a universal, binding, dynamic and differentiated agreement to face the challenge of climate change; regrets, however, the fact that there is no clarity on how donor countries will meet the yearly USD 100 billion goal to support developing countries, or in particular on how they will agree on a common methodology to account for climate finance; notes that this issue is to be resolved before COP 22 in Marrakesh, and expects the Commission to deliver a consolidated EU regulatory framework which fully complies with all the commitments made in Paris and anticipates such financing in its draft budget for 2017; recalls that the EU has agreed that at least 20 % of its budget for 2014-2020, in other words as much as EUR 180 billion, should be spent on climate-related actions and that a ‘climate fine‑tuning’ of the EU budget is needed; asks the Commission to continue supporting EU spending on sustainable efficient infrastructure and sustainable modes of transport; encourages the Commission to swiftly implement the Council conclusions of 17 November 2015 with regard to climate and cohesion policy funds;

29.  Welcomes the Commission’s efforts in developing the ‘EU Budget Focused on Results’ strategy; calls on the Commission to demonstrate progress in the field of simplification of EU funding, especially with regard to reducing the burden of implementation and management of EU-funded projects; stresses that particular attention should be paid to the performance of financial instruments which can reach out to important target groups, such as SMEs, innovative enterprises and microenterprises under the Union funding programmes; believes, furthermore, that, apart from the Union institutions, considerable responsibility also lies with the Member States, given the fact that 80 % of the budget is under ‘shared management’; calls on the Member States, therefore, to do their utmost to guarantee sound financial management and the reduction of errors, and to avoid any delays in the implementation of programmes under their responsibility; emphasises the need to focus more on developing suitable quantitative and qualitative output indicators in order to measure performance and evolve a concrete picture of the effect of EU spending in the real economy; calls on all Member States to promote and put in place concrete measures for actively fighting corruption in public procurements and tenders;

30.  Confirms its support for the international ITER research and engineering programme, and is committed to securing appropriate financing for it; is concerned, however, that further delays and additional costs may arise regarding this programme, as well as at the related potential repercussions for the Union budget; regrets, therefore, that it was unable to assess the level of the 2016 ITER appropriations against the updated payment plan and schedule; expects this revised plan to be included in the preparation of the draft budget for 2017; calls for a proper accountability mechanism that will offer a clear overview of the amount in financial resources provided for the international project and will evaluate the efficiency of their use;

31.  Recalls that the final agreement on the MFF 2014-2020, as enshrined in Article 2 of the MFF Regulation, includes a compulsory review of the MFF 2014-2020, to be accompanied by a legislative proposal for revision of the MFF by the end of 2016; stresses that the purpose of the review/revision is to assess the qualitative and quantitative functioning of the MFF and to address systemic shortcomings of the Union budget, as well as to ensure that the Union is granted sufficient resources to effectively address internal and external crises and finance evolving political priorities for the second half of the current MFF; stresses that the Council should live up to the expectations raised by the statements and decisions of the European Council; underlines in this respect that the Council should take on responsibility for ensuring that the necessary appropriations are made available to respond to the financing of new tasks and unforeseen circumstances, including through an upward revision of the MFF ceilings; intends to take a consistent approach in the negotiations on the 2017 budget and the revision of the MFF; expresses its strong doubts whether the crises in question can be funded within the constraints of the current MFF; highlights in addition that the revision of the MFF in 2016 is an opportunity to adapt its means and to extend flexibility within it;

32.  Reiterates its position in favour of the necessary in-depth reform of the system of Union own resources, and gives the highest political importance to the work of the High Level Group on Own Resources created as part of the MFF 2014-2020 agreement; expects the Commission and the Council to take on board the final outcome, which is expected by the end of 2016, including any new candidate for own resources; recalls that the leading idea behind the own resources reform is to make the revenue side of the Union budget more autonomous as well as more stable, simpler, fairer, more sustainable and more predictable, while also alleviating the burden of excessive spending from national budgets and improving transparency and visibility for the citizens without increasing the overall tax burden for citizens; believes that if there is to be a completely independent EU budget, genuine own resources have to be put in place;

o
o   o

33.  Instructs its President to forward this resolution to the Council, the Commission and the European Court of Auditors.

(1) OJ L 347, 20.12.2013, p. 884. (2) OJ C 373, 20.12.2013, p. 1. (3) OJ L 298, 26.10.2012, p. 1. (4) Texts adopted, P8_TA(2015)0407. (5) OJ L 48, 24.2.2016. (6) See Annex to Parliament’s legislative resolution of 25 November 2015 (Texts adopted, P8_TA(2015)0407). (7) See Annex II to Parliament’s resolution of 8 July 2015 (Texts adopted, P8_TA(2015)0263). (8) http://ec.europa.eu/economy_finance/publications/eeip/pdf/ip011_en.pdf (9) http://ec.europa.eu/europe2020/pdf/2016/ags2016_annual_growth_survey.pdf (10) Texts adopted, P8_TA(2015)0401.