The European Parliament,

–  having regard to Articles 311, 312 and 323 of the Treaty on the Functioning of the European Union (TFEU),

–  having regard to Council Regulation (EU, Euratom) 2022/2496 of 15 December 2022 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027(1),

–  having regard to Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027(2) and to the joint declarations agreed between Parliament, the Council and the Commission in this context(3) and the related unilateral declarations(4),

–  having regard to the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources(5) (‘the IIA’),

–  having regard to the Commission proposal of 20 June 2023 for a Council regulation amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027 (COM(2023)0337),

–  having regard to the Commission communication of 20 June 2023 entitled ‘Mid-term revision of the multiannual financial framework 2021-2027’ (COM(2023)0336) and the accompanying staff working document (SWD(2023)0336),

–  having regard to the proposal of 20 June 2023 for a regulation of the European Parliament and of the Council on establishing the Ukraine Facility (COM(2023)0338),

–  having regard to the proposal of 20 June 2023 for a regulation of the European Parliament and of the Council establishing the Strategic Technologies for Europe Platform (‘STEP’) and amending Directive 2003/87/EC, Regulations (EU) 2021/1058, (EU) 2021/1056, (EU) 2021/1057, (EU) No 1303/2013, (EU) No 223/2014, (EU) 2021/1060, (EU) 2021/523, (EU) 2021/695, (EU) 2021/697 and (EU) 2021/241 (COM(2023)0335),

–  having regard to the draft general budget of the European Union for the financial year 2024, which the Commission adopted on 5 July 2023 (COM(2023)0300),

–  having regard to Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget(6),

–  having regard to Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 crisis(7),

–  having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012(8) (‘the Financial Regulation’),

–  having regard to the proposal of 16 May 2022 for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (COM(2022)0223),

–  having regard to its resolution of 10 May 2023 on the impact on the 2024 EU budget of increasing European Union Recovery Instrument borrowing costs(9),

–  having regard to its resolution of 15 December 2022 on upscaling the 2021-2027 multiannual financial framework: a resilient EU budget fit for new challenges(10),

–  having regard to the opinion of the European Economic and Social Committee(11),

–  having regard to Rule 105(5) of its Rules of Procedure,

–  having regard to the letters from the Committee on Development, the Committee on Employment and Social Affairs, the Committee on Transport and Tourism, the Committee on Regional Development, the Committee on Agriculture and Rural Development, the Committee on Culture and Education, the Committee on Civil Liberties, Justice and Home Affairs, the Committee on Constitutional Affairs and the Committee on Women’s Rights and Gender Equality,

–  having regard to the report of the Committee on Budgets (A9-0273/2023),

Overall assessment of the Commission proposal

1.  Welcomes the fact that, following its review of the 2021-2027 multiannual financial framework (MFF), the Commission has drawn the same conclusion as Parliament did in December 2022, namely that the MFF has been overtaken by events in a world that has changed beyond recognition since it was agreed in 2020, that budgetary flexibility has been depleted by multiple crises and more is necessary in order to respond to unforeseen circumstances, that the MFF contains structural problems laid bare by economic and social developments and that, as a result, an urgent revision of the MFF regulation and its annex is essential;

2.  Underlines the fact that the revision must focus on addressing the manifold consequences of Russia’s war of aggression against Ukraine, on strengthening the Union’s open strategic autonomy and sovereignty and on endowing the Union with adequate flexibility to respond to crises; welcomes, therefore, the Commission’s proposal for a targeted revision as a first step in the right direction, considers, however, that a higher but realistic level of ambition is necessary to ensure the MFF can better address the structural challenges in the budget and become more future-proof;

3.  Considers that the proposed revision targets only some of the most pressing areas of concern in the existing framework and does not fully address all needs and challenges identified by Parliament;

4.  Expects the Commission to continue to evaluate thoroughly all current and future needs, including when it comes to social and economic convergence, the impact on regions most affected by the war and the necessary response to the climate and biodiversity crisis; underlines the pressure of inflation across the EU and notably on EU beneficiaries such as farmers, students and children; regrets that the proposed revision does not reflect the fact that the current crises have exacerbated and will further exacerbate the current deteriorating socio-economic situation for the most vulnerable people in the Union, especially children in poverty or at risk of poverty, and will have long-lasting consequences; stresses, further, that the proposed revision does not reflect the Union’s ambition to step up its efforts to fight alarming child poverty rates and to contribute to the eradication of child poverty by means of the recently created European Child Guarantee; insists therefore that the Council and the Commission take into account Parliament’s call for the Union’s efforts towards the eradication of child poverty to be urgently stepped up during the 2024-2027 period and calls for an upscaled European Child Guarantee as part of the post-2027 MFF;

5.  Welcomes the fact that, in line with Parliament’s position, the proposal for revision does not lead to any downward revision of the pre-allocated national envelopes; underlines the pivotal role and added value of cohesion policy as an essential Union investment policy and convergence instrument;

6.  Recalls that, unlike in national budgets, where inflation affects the nominal value of both revenue and expenditure, the MFF spending ceilings are adjusted on the basis of a 2 % deflator applied to 2018 prices, whereas the own resources ceiling adjusts to inflation; is deeply concerned that, according to the Commission, inflation may reduce the real-terms value of the MFF by EUR 74 billion over the seven-year period with a direct impact on the beneficiaries of EU funding;

7.  Underlines, however, that, as a result of unexpectedly high inflation, revenue called from Member States for MFF spending has decreased as a percentage of gross national income (GNI); notes, furthermore, that rebates for the five beneficiary Member States are inflation-linked and have therefore increased at a higher rate than the MFF ceilings, thereby increasing the burden on the other Member States that have to cover the shortfall; calls for the rebates to be adjusted on the basis of the 2 % deflator as an immediate measure; recalls, furthermore, its long-standing position that rebates and other correction mechanisms should be abolished;

8.  Stresses that, in addition to reducing the real-terms value of the MFF, inflation has also triggered a substantial increase in interest rates, driving up EU borrowing costs, in particular in relation to the repayment of the European Union Recovery Instrument (EURI) debt, and therefore further squeezing the budget;

9.  Highlights that, even taking account of the Commission’s proposal to revise the MFF, total commitment appropriations would amount to only 1,03 % of GNI and total payment appropriations would amount to only 1,02 % of GNI; recalls that, originally, payment appropriations in the current MFF were planned to amount to 1,10 % of GNI; stresses that the reinforcements proposed by the Commission are not projected to cover the impact of inflation;

10.  Notes the Commission’s assessment that the proposed revision will require an increase in the ceiling for payment appropriations in 2026 and 2027; stresses that the Union’s credibility depends on ensuring that there are adequate payment appropriations to cover commitment appropriations; emphasises the delays in the implementation of some programmes due to their late adoption and the disruption to projects because of the COVID-19 crisis; underlines, in this context, the risk of a payments backlog in the later years of the MFF period and for the subsequent MFF; insists, therefore, on the need to scrap the annual cap in payment appropriations for recourse to the Single Margin Instrument in order to mitigate this risk;

11.  Reaffirms the importance of the horizontal principles concerning climate, biodiversity and gender equality that underpin the MFF and all related EU policies; recalls that targets related to climate and biodiversity, as well as the obligation to respect the ‘do no significant harm’ principle and to promote gender equality are laid down in the IIA and insists that these provisions must also underpin the updated MFF; calls on the Commission to fulfil its obligation under the IIA to take concrete action to ensure that the agreed targets and policy objectives are fully met;

12.  Recalls that spending under Heading 7 should be set at a level that guarantees that the EU has an effective and efficient administration, as proposed by the Commission;

13.  Reiterates its view that a revised MFF must be in place by 1 January 2024 and provide a framework for the 2024 budget; insists, therefore, on the need for swift adoption of the amended regulation; welcomes, in that connection, the fact that the Commission heeded Parliament’s call to bring forward its MFF review and revision;

14.  Reiterates its long-standing demand that all budgetary instruments covering spending at Union level be fully incorporated into the budget, thereby ensuring transparency, accountability, full democratic control and protection of the Union’s financial interests; insists that the integration of such instruments into the EU budget must not result in a reduction of financing for other EU policies and programmes;

15.  Underlines that there is a clear link between respect for the rule of law and efficient implementation of the EU budget; welcomes the positive impact of the Regulation on a general regime of conditionality for the protection of the EU budget and believes that it has already acted as an effective deterrent against breaches of the rule of law; reminds the Commission of its obligation under the Regulation to ensure that the final recipients or beneficiaries of EU funds are not deprived of the funds they are due, in particular when measures are adopted in the event of breaches of the principles of the rule of law in line with the Regulation;

16.  Stands ready to engage actively and constructively with the Council and the Commission to ensure that the revised framework, addressing the entire Commission proposal, is adopted in good time and is in place by 1 January 2024; recalls that, in the IIA, the institutions undertake to determine specific arrangements for cooperation and dialogue throughout the procedure leading to the adoption of a substantial revision of the MFF;

Long-term support for Ukraine

17.  Recalls that the Union and its people have been at the forefront in supporting Ukraine from the very beginning of the war, showing solidarity with Ukrainians in their fight to defend democracy against authoritarianism; stresses that the EU budget has provided financial assistance in excess of EUR 30 billion to date; reiterates its view that the Union must be at the heart of continued efforts to support Ukraine financially and help it on its path to EU membership;

18.  Welcomes, therefore, the Commission’s proposal for a longer-term structural solution to Ukraine’s funding needs anchored in the EU budget, which covers support for macro-financial stability, an investment framework and funds for short- and medium-term recovery and reconstruction, for accession-related reforms and for building administrative capacity; considers that such a longer-term instrument is the only viable way to engage other donors and to ensure effective and targeted spending that meets the needs of Ukraine and its people; insists that the Ukraine Facility should be agreed as soon as possible, following adoption of the revised MFF Regulation, given that financing under the MFA+ Regulation(12) is provided for 2023 only;

19.  Considers it sensible to build a certain degree of flexibility into the Facility, given the uncertainties surrounding Ukraine’s situation; welcomes the fact that, as per the Commission proposal, the Ukraine Reserve is to be mobilised by the budgetary authority in the annual budgetary procedure and is determined to ensure that Parliament, as one arm of the budgetary authority, plays its full role in the process; invites the Commission to provide, in good time, all the necessary information to enable the budgetary authority to fulfil its duties;

20.  Stresses the need to protect the rule of law and the financial interests of the Union and to prevent, detect and correct fraud, corruption, conflicts of interest and irregularities in the use of Union funds in Ukraine, which should be based on the principles of transparency and accountability; considers that the Facility should contain stringent provisions and safeguards to attain those objectives;

Migration and external challenges

21.  Deplores the fact that, even prior to Russia’s war of aggression against Ukraine, funds available under Heading 6 (neighbourhood and the world) were woefully inadequate and that the MFF did not factor in continued funding for the needs of refugees from Syria, Iraq and other countries, leaving almost no scope to cope with additional challenges;

22.  Stresses that, in particular following Russia’s war of aggression against Ukraine, the international context has deteriorated rapidly as a result of the food, energy, climate and economic crises, which have dramatically increased pressure on Heading 6; notes that, in addition to repeated recourse to the Flexibility Instrument, the Neighbourhood, Development and International Cooperation Instrument (NDICI)-Global Europe cushion has been depleted very quickly and used beyond its core purpose of responding to emerging challenges and priorities, while the humanitarian aid budget has relied heavily on mobilisation of the severely stretched Solidarity and Emergency Aid Reserve (SEAR), the scope of which extends beyond humanitarian aid;

23.  Welcomes, therefore, the Commission’s proposal to increase the ceiling for Heading 6 in line with Parliament’s call, though regrets the fact that the extra resources do not fully cover real needs or account for unforeseen developments; underlines that a further reinforcement of EUR 1 billion in current prices over and above the Commission proposal is vital to replenish the NDICI-Global Europe cushion and thereby create capacity to respond to crises and emerging needs; stresses that the increase would ensure continued humanitarian aid to Ukraine in addition to the support under the Facility, as well as to neighbouring countries, such as Moldova which is heavily impacted by the war against Ukraine, and worldwide; stresses that the internal balance and distribution between the budget lines as provided for in the NDICI Regulation must be respected; calls on the Commission to ensure third-country compliance with stringent human rights standards at all stages of the implementation of the Union’s external policy, including with respect to migration;

24.  Underlines that Russia’s war of aggression against Ukraine, together with increased global hunger and poverty, the proliferation of armed conflicts and more intense and frequent natural disasters, are forcing millions of people to flee their homes and seek protection in the EU; stresses the need for the Union to continue to provide support to the host Member States for the reception, settlement and integration of refugees;

25.  Stresses that effective and fair management and protection of the EU’s external borders, ensuring the security of the Union, together with the smooth and efficient implementation of the Union’s migration and asylum policy, are key priorities and essential to preserve the free movement of people within the Union and the proper functioning of the Schengen area; stresses the need to implement a migration and asylum policy that is based on solidarity, shared responsibility and respect for human rights, providing certainty, clarity and decent and dignified conditions for people arriving in the EU, in line with Union values and international commitments;

26.  Notes the Commission’s assessment that implementation of the New Pact on Migration and Asylum will require an additional EUR 2 billion between 2025 and 2027 under Heading 4 (migration and border management); considers that the additional demands on the Asylum, Migration and Integration Fund, the Border Management and Visa Instrument and the decentralised agencies in Heading 4 require a further reinforcement over and above the Commission proposal of EUR 1 billion in current prices and that the additional resources should be available from 2024;

27.  Recalls that the precise breakdown of additional funds across programmes and budget lines under Headings 4 and 6 is to be determined by the budgetary authority in the annual budgetary procedure;

The Strategic Technologies for Europe Platform (STEP)

28.  Reaffirms the need to secure the open strategic autonomy of the Union, reduce dependence on non-EU countries and boost investments across the Union in key strategic sectors, including, among others, health, raw materials and space, while driving forward the green and digital transitions; regrets that the Commission did not respect its commitment under the work programme for 2023 to ‘push to create a new European Sovereignty Fund’; believes that the Union’s industrial strategy should ensure the correct functioning of the single market, avoid market distortions, create a level playing field inside and outside the EU and ensure people have the necessary skills;

29.  Acknowledges that, despite its limited size and scope, the STEP proposal has the potential to deliver results more quickly by using existing programme structures and seeking to create synergies; considers that the STEP proposal should act as a testbed for a fully-fledged Sovereignty Fund in the next MFF period;

30.  Notes that the STEP proposal combines the re-prioritisation of funds under existing programmes, including the cohesion policy funds, with targeted reinforcements for specific programmes under Headings 1 (single market, innovation and digital), 3 (natural resources and environment) and 5 (security and defence);

31.  Underlines that, in order to deliver on the strategic objectives for STEP, to strengthen and shape the Union’s industrial policy, to boost support for the defence sector, which is more crucial than ever to protect the sovereignty and integrity of the EU Member States in a dramatically changed and far more challenging defence policy landscape, and to build the open strategic autonomy of the Union while ensuring a level playing field in the single market, financing for STEP should be increased, with further reinforcements of EUR 2 billion in current prices over and above the Commission proposal in Heading 1 and of EUR 1 billion in current prices over and above the Commission proposal in Heading 5;

32.  Underlines that significant redeployments have been implemented since 2021 across headings, thereby putting programmes under huge pressure and at risk of disruption; recalls its long-standing position that new priorities must be financed with fresh money, rather than through recurrent redeployments, and therefore insists on the need for additional fresh money to ensure effective delivery of other programmes under Heading 1;

33.  Reiterates its view that decommitted appropriations should remain in the budget and be committed by the budgetary authority through the annual budgetary procedure and recalls its position on the revision of the Financial Regulation in that regard; welcomes, therefore, the fact that the STEP proposal assumes the re-use of EUR 1.2 billion in research decommitments under Article 15(3) of the Financial Regulation and that the Commission thus implicitly acknowledges the inaccuracy of its estimate for research decommitments underpinning the 2020 MFF agreement;

34.  Recalls its long-standing demand that all EU spending instruments should be incorporated in the budget, in full respect of the principle of budgetary unity; considers, in that connection, that the proposed allocation for the Innovation Fund under Heading 3 marks important progress towards its full budgetisation;

European Union Recovery Instrument (EURI) borrowing costs

35.  Is concerned that the amount programmed in the MFF to repay the borrowing costs associated with EURI is far below requirements, with the Commission estimating the shortfall to be between EUR 17 and 27 billion over the MFF period; highlights that, already in the draft budget, increased EURI costs are expected to consume all resources under the Flexibility Instrument and around one third of resources under compartment (a) of the Single Margin Instrument in 2024;

36.  Underscores that steeply rising interest rates since Russia’s war of aggression against Ukraine have laid bare the inherent structural flaws in the EU budget’s debt repayment architecture; recalls that interest costs and debt repayment depend on market developments, are not discretionary spending and therefore cannot be subject to a spending cap under an MFF ceiling without posing a direct risk to investment programmes and their beneficiaries and the budget’s capacity to respond to emerging needs;

37.  Recalls that Parliament has consistently called for a solution to this problem and insisted that the EURI repayment costs be placed over and above the MFF ceilings;

38.  Welcomes the creation of the EURI Instrument as a special instrument over and above the MFF ceilings to be mobilised as required based on the actual repayment needs; insists, however, that the Instrument cover all EURI repayment costs, not only those above the programmed amount under Heading 2b (resilience and values); underlines that a EURI Instrument designed in this way should be the model for managing all EURI repayment costs in the next MFF;

39.  Insists on the need for the Commission to provide the budgetary authority with timely and detailed information on the calculations underpinning the forecasts for EURI borrowing costs, including the assumptions and parameters used, in order to enable responsible management of repayment costs;

40.  Points out the need for a more diverse and resilient set of revenue sources for the EU budget in order to provide robust and sustainable financing for a reinforced and scaled-up MFF; urges the Council, therefore, to swiftly approve the existing proposals on new own resources and underlines that progress on new own resources beyond these proposals is needed;

Enhancing the budget’s capacity to respond to crises and emerging needs

41.  Points out that the proposed model for managing EURI repayment costs would have the effect of restoring the budgetary space in the Flexibility and Single Margin Instruments from 2024 to 2027 as per the initial MFF financial programming;

42.  Underlines, however, that the MFF contains very little flexibility, with the Flexibility Instrument and unallocated margins amounting to only 1,05 % of the commitments ceiling; stresses that the current MFF has relied heavily on that limited flexibility and has regrettably resorted to reorienting cohesion policy, which is not a crisis response tool but has been repeatedly called on to make up for shortcomings in budgetary flexibility or crisis response mechanisms in the MFF to the detriment of its long-term policy objectives;

43.  Points, furthermore, to the increased needs since the beginning of the MFF for humanitarian aid and emergency response inside and outside the Union and for support in relation to natural disasters, which are becoming more frequent and intense in particular owing to climate change, and considers that these needs are likely to grow; stresses that the annual allocation for the SEAR was exhausted in 2021 and 2022 and is expected to be fully used in 2023; deplores the fact that beneficiaries of aid under the EU Solidarity Fund have, in some instances, received less than 50 % of the aid they would ordinarily have received and have had to wait a long time for disbursement owing to the limitations of the SEAR;

44.  Considers, in this respect, that the Commission’s proposal to increase the Flexibility Instrument and the SEAR is a step in the right direction; insists, however, that the EU budget must be equipped with the necessary flexibility and budgetary space to be able to respond to crises and adapt to emerging and growing needs;

45.  Recalls its demands for an increase in the Flexibility Instrument and the SEAR and for an additional permanent special instrument over and above the MFF ceilings to allow the EU budget to better adapt and quickly react to crises and their social and economic effects; understands that, in the absence of such an instrument, it will remain difficult for the Union to ensure its preparedness for unforeseen events, especially since, currently, 99,6 % of the Union’s budget is pre-allocated; stands ready to work to find pragmatic solutions in the short term, while reflecting on a more structural, streamlined solution in the next MFF;

46.  Underlines that budgetary flexibility has proven that it enables resources to be targeted where they are needed and the Union to respond to unforeseen events and to adjust its spending priorities in light of evolving political, economic or social needs; insists, therefore, that the Flexibility Instrument be increased by EUR 3 billion in current prices over and above the Commission proposal for the MFF period; considers, furthermore, that lapsed amounts under the European Globalisation Adjustment Fund should be made available again under the Flexibility Instrument in order to further bolster flexibility in the budget;

47.  Notes that demands on the SEAR are unlikely to lessen; considers, therefore, that reinforcing the SEAR is crucial to enable the Union to act in emergency situations caused by major natural disasters or public health crises in Member States and accession countries and also to support non-EU countries suffering from conflicts, refugee crises or natural disasters; insists, therefore, that the SEAR be increased by EUR 2 billion in current prices over and above the Commission proposal for the MFF period; regrets the decision to merge the Emergency Aid Reserve (EAR) and the European Union Solidarity Fund (EUSF) in the current MFF, which has led to serious shortcomings in implementation and recalls its position that the SEAR should be split back into two strands – the EAR and the EUSF;

Recommendations and modifications

48.  Asks the Council and the Commission to take into account the following recommendations and modifications:

	(i)	increase the ceiling of Heading 1 by EUR 2 billion in current prices over and above the Commission proposal;
	(ii)	increase the ceiling of Heading 4 by EUR 1 billion in current prices over and above the Commission proposal and apply the increase to the heading from 2024;
	(iii)	increase the ceiling of Heading 5 by EUR 1 billion in current prices over and above the Commission proposal;
	(iv)	increase the ceiling of Heading 6 by EUR 1 billion in current prices over and above the Commission proposal;
	(v)	increase the Flexibility Instrument by EUR 3 billion in current prices over and above the Commission proposal, and make the lapsed amounts under the European Globalisation Fund available again under the Flexibility Instrument;
	(vi)	increase the Solidarity and Emergency Aid Reserve by EUR 2 billion in current prices over and above the Commission proposal;
	(vii)	provide that the EURI Instrument, established as a special instrument over and above the MFF ceilings, cover all EURI repayment costs;
	(viii)	delete the annual cap in payment appropriations for recourse to the Single Margin Instrument;
	(ix)	The proposal for a Council regulation should be modified as follows: ANNEX I MULTIANNUAL FINANCIAL FRAMEWORK (EU-27) (EUR million - 2018 prices) ° ° ° Text proposed by the Commission   Modification Modification 1 Proposal for a regulation Recital 4 (4)  The EU budget should enable the Union to provide the necessary policy responses to emerging challenges and to meet legal obligations which cannot be accommodated within existing ceilings nor by exhausted flexibility. The expenditure ceilings in commitment appropriations for Headings 1, 3, 5, 6, and 7 including the sub-ceiling for administrative expenditure of the institutions for the years 2024, 2025, 2026 and 2027, and the ceiling for Heading 4 for the years 2025, 2026 and 2027 should therefore be increased. As a result, the expenditure ceilings in payment appropriations for the years 2026 and 2027 should be increased; (4)  The EU budget should enable the Union to provide the necessary policy responses to emerging challenges and to meet legal obligations which cannot be accommodated within existing ceilings nor by exhausted flexibility. The expenditure ceilings in commitment appropriations for Headings 1, 3, 4, 5, 6, and 7 including the sub-ceiling for administrative expenditure of the institutions for the years 2024, 2025, 2026 and 2027 should therefore be increased. As a result, the expenditure ceilings in payment appropriations for the years 2026 and 2027 should be increased; Modification 2 Proposal for a regulation Recital 11 (11)  Given the uncertainty surrounding the future evolution of interest rates and in order to avoid undue pressures on Union programmes, it is appropriate to establish a new thematic special instrument to cover all funding costs for NextGenerationEU borrowing which exceed the amounts initially programmed. The necessary commitment appropriations and corresponding payment appropriations in the Union budget should be made available over and above the ceilings of the MFF; (11)  Given the uncertainty surrounding the future evolution of interest rates and in order to avoid undue pressures on Union programmes, it is appropriate to establish a new thematic special instrument to cover all funding costs for NextGenerationEU borrowing. The necessary commitment appropriations and corresponding payment appropriations in the Union budget should be made available over and above the ceilings of the MFF; Modification 3 Proposal for a regulation Recital 12 (12)  The Solidarity and Emergency Aid Reserve and the Flexibility Instrument should be reinforced in order to maintain a sufficient capacity for the Union to react to unforeseen circumstances until 2027; (12)  The Solidarity and Emergency Aid Reserve and the Flexibility Instrument should be reinforced in order to maintain a sufficient capacity for the Union to react to unforeseen circumstances until 2027. In order to further bolster flexibility in the budget, it is appropriate to make the lapsed amounts under the European Globalisation Fund available again under the Flexibility Instrument; Modification 4 Proposal for a regulation Recital 12 a (new) (12a)   Owing to the delays in implementation of certain programmes in the early years of the 2021-2027 MFF, including of major programmes, there is a risk of a payments backlog in the latter years of the MFF when implementation picks up speed. In order to mitigate this risk and to respect the EU’s commitments, the annual cap in payment appropriations for recourse to the Single Margin Instrument should be removed; Modification 5 Proposal for a regulation Article 1 – paragraph 2 (2)  In Article 9, paragraph 2 is replaced by the following: ‘2. The Solidarity and Emergency Aid Reserve shall not exceed a maximum annual amount of EUR 1 739 million (in 2018 prices). Any portion of the annual amount not used in year n may be used up to year n+1. The portion of the annual amount stemming from the previous year shall be drawn on first. Any portion of the annual amount from year n which is not used in year n+1 shall lapse.’; (2)  In Article 9, paragraph 2 is replaced by the following: ‘2. The Solidarity and Emergency Aid Reserve shall not exceed a maximum annual amount of EUR 2 170 million (in 2018 prices). Any portion of the annual amount not used in year n may be used up to year n+1. The portion of the annual amount stemming from the previous year shall be drawn on first. Any portion of the annual amount from year n which is not used in year n+1 shall lapse.’; Modification 6 Proposal for a regulation Article 1 – paragraph 3 (3)  The following Articles are inserted: ‘Article 10a EURI Instrument 1.  The EURI Instrument may be used to finance the additional costs where, in a given year, the costs of the interest and coupon payments due in respect of the funds borrowed on the capital markets in accordance with Article 5(2) of Decision (EU, Euratom) 2020/2053 exceed the following amounts (in 2018 prices): –  2024 – EUR 1 840 million, –  2025 – EUR 2 332 million, –  2026 – EUR 3 196 million, –  2027 – EUR 4 168 million, 2.  The EURI Instrument may be mobilised by the European Parliament and the Council in the framework of the budgetary procedure provided for in Article 314 TFEU.’; ‘Article 10b Ukraine Reserve 1.  The Ukraine Reserve may be mobilised for the sole purpose of financing expenditure under [the Ukraine Facility Regulation] and shall aim at providing at least EUR 2 500 million in current prices as an annual indicative amount. 2.  The Ukraine Reserve shall not exceed an amount of EUR 50 000 million in current prices for the period 2024 to 2027. The annual amount mobilised under the Ukraine Reserve in a given year shall not exceed EUR 16 700 million in current prices. 3.  The Ukraine Reserve may be mobilised by the European Parliament and the Council in the framework of the budgetary procedure provided for in Article 314 TFEU.’; (3)  The following Articles are inserted: ‘Article 10a EURI Instrument 1.  The EURI Instrument shall be mobilised by the European Parliament and the Council in the framework of the budgetary procedure provided for in Article 314 TFEU to finance the costs of the interest and coupon payments due in respect of the funds borrowed on the capital markets in accordance with Article 5(2) of Decision (EU, Euratom) 2020/2053.’; ‘Article 10b Ukraine Reserve 1.  The Ukraine Reserve may be mobilised for the sole purpose of financing expenditure under [the Ukraine Facility Regulation] and shall aim at providing at least EUR 2 500 million in current prices as an annual indicative amount. 2.  The Ukraine Reserve shall not exceed an amount of EUR 50 000 million in current prices for the period 2024 to 2027. The annual amount mobilised under the Ukraine Reserve in a given year shall not exceed EUR 16 700 million in current prices. 3.  The Ukraine Reserve shall be mobilised by the European Parliament and the Council in the framework of the budgetary procedure provided for in Article 314 TFEU.’; Modification 7 Proposal for a regulation Article 1 – paragraph 3 a (new) (3a)   Article 11 is amended as follows: (a)  paragraph 1 is replaced by the following: ‘1. The Single Margin Instrument shall comprise: (a)  as of 2022, amounts corresponding to margins left available below the MFF ceilings for commitment appropriations of year n-1 to be made available over and above the MFF ceilings for commitment appropriations for the years 2022 to 2027; (b)  as of 2022, amounts equivalent to the difference between the executed payments and the MFF payment ceiling of year n-1 to adjust upwards the payment ceiling for the years 2022 to 2027; and (c)  additional amounts which may be made available over and above the MFF ceilings in a given year for commitment or payment appropriations, or both, as the case may be, provided that they are fully offset against the margins in one or more MFF headings for the current or future financial years as regards commitment appropriations and are fully offset against the margins under the payment ceiling for future financial years as regards payment appropriations. Any upward adjustment under point (b) of the first subparagraph shall be fully offset by a corresponding reduction of the payment ceiling for year n-1. Amounts may only be mobilised under point (c) of the first subparagraph if the amounts available pursuant to points (a) and (b) of that subparagraph, as applicable, are insufficient, and in any case as a last resort to react to unforeseen circumstances. Recourse to point (c) of the first subparagraph shall not result in exceeding the total amounts of the MFF ceilings for commitment and payment appropriations for the current financial year and future financial years. Any amounts offset in accordance with that point shall therefore not be further mobilised in the context of the MFF.’; (b)  paragraph 3 is deleted; Modification 8 Proposal for a regulation Article 1 – paragraph 4 (4)  In Article 12, paragraph 1 is replaced by the following: ‘1. The Flexibility Instrument may be used for the financing, for a given financial year, of specific unforeseen expenditure in commitment appropriations and corresponding payment appropriations that cannot be financed within the limits of the ceilings available for one or more other headings. The ceiling for the annual amount available for the Flexibility Instrument shall be EUR 1 562 million (in 2018 prices).’; (4)  In Article 12, paragraph 1 is replaced by the following: ‘1. The Flexibility Instrument may be used for the financing, for a given financial year, of specific unforeseen expenditure in commitment appropriations and corresponding payment appropriations that cannot be financed within the limits of the ceilings available for one or more other headings. The ceiling for the annual amount available for the Flexibility Instrument shall be EUR 2 170 million (in 2018 prices). Each year the annual amount available for the Flexibility Instrument shall be increased by an amount equivalent to the portion of the annual amount for the European Globalisation Adjustment Fund which has lapsed in the previous year.’; Modification 9 Proposal for a regulation Article 1 – paragraph 5 (5)  Annex I is replaced by the text in the Annex to this Regulation. (5)  Annex I is replaced by the following: COMMITMENT APPROPRIATIONS 2021 2022 2023 2024 2025 2026 2027 Total 2021-2027 1.  Single Market, Innovation and Digital 19 712 20 211 19 678 20 399 19 715 19 821 19 624 139 160 2.  Cohesion, Resilience and Values 5 996 62 642 63 525 65 079 65 286 56 787 58 809 378 124 2a.  Economic, social and territorial cohesion 1 666 56 673 57 005 57 436 57 874 48 414 49 066 328 134 2b.  Resilience and Values 4 330 5 969 6 520 7 643 7 412 8 373 9 743 49 990 3.  Natural Resources and Environment 53 562 52 626 51 893 52 123 51 195 49 999 49 207 360 605 Of which: Market related expenditure and direct payments 38 040 37 544 36 857 36 054 35 401 34 729 34 015 252 640 4.  Migration and Border Management 1 687 3 104 3 454 3 791 4 302 4 359 4 910 25 607 5.  Security and Defence 1 598 1 750 1 762 2 334 2 497 2 611 2 785 15 337 6.  Neighbourhood and the World 15 309 15 522 14 789 16 609 15 827 15 046 15 235 108 337 7.  European Public Administration 10 021 10 215 10 342 10 586 10 887 11 229 11 443 74 723 Of which: Administrative expenditure of the institutions 7 742 7 878 7 945 8 107 8 310 8 541 8 660 57 183 TOTAL COMMITMENT APPROPRIATIONS 107 885 166 070 165 443 170 921 169 709 159 852 162 014 1 101 894 TOTAL PAYMENT APPROPRIATIONS 154 065 153 850 152 682 151 436 151 175 159 978 155 025 1 078 211’

49.  Instructs its President to forward this resolution to the Council and the Commission.

(1) OJ L 325, 20.12.2022, p. 11. (2) OJ L 433 I, 22.12.2020, p. 11. (3) OJ C 444 I, 22.12.2020, p. 4. (4) OJ C 445, 29.10.2021, p. 240. (5) OJ L 433 I, 22.12.2020, p. 28. (6) OJ L 433 I, 22.12.2020, p. 1. (7) OJ L 433 I, 22.12.2020, p. 23. (8) OJ L 193, 30.7.2018, p. 1. (9) Texts adopted, P9_TA(2023)0194. (10) OJ C 177, 17.5.2023, p. 115. (11) [Reference to be added: adoption in plenary on 20-21 September] (12) Regulation (EU) 2022/2463 of the European Parliament and of the Council of 14 December 2022 establishing an instrument for providing support to Ukraine for 2023 (macro-financial assistance +) (OJ L 322, 16.12.2022, p. 1).