Review/revision of the functioning of the multiannual financial framework (MFF) for 2021-2027

In “An Economy that Works for People”

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Resources and flexibilities of the EU budget have been considerably consumed since the start of the  multiannual financial framework (MFF) 2021-2027. The European Commission was due to carry out in 2023 a mid-term review, to assess if the current EU budget continues to provide the means for common responses to common challenges.

To that end, the Commission presented on 20 June 2023 its assessment, accompanied by a proposal for a revision of the current MFF.

The proposal for a revision included a €65.8 billion reinforcement of the EU budget in grants and budgetary guarantees, and €33 billion in loans, to meet the most urgent budgetary 
needs. In detail:

- a dedicated Facility to support Ukraine. This will come in the form of an integrated and flexible instrument with an overall capacity of €50 billion (€33 billion in loans, €17 billion in grants) over 2024-2027;

- an increase to the ceiling for heading 4 (Migration and Border Management) by €2 billion, in order to provide for sufficient funding to support Member States in managing urgent challenges related to migration and borders; 

- increase of the ceiling of Heading 6 (Neighbourhood and the World) by €10.5 billion, to reinforce the Union’s capacity to address crises and emergency situations. The Solidarity and Emergency Aid Reserve should also be increased by €2.5 billion;

- adjustments to headings 1, 3 and 5 to provide €10 billion for a Strategic 
Technologies for Europe Platform (STEP);

- a new special instrument, the EURI Instrument in view of repaying the grant component of the NextGenerationEU (NGEU) recovery instrument, taking into account the increasing interest rates and inflation. The Commission estimated the  overrun at €18.9 billion. It also proposed an increase of €1.9 billion of the ceiling for administrative expenditure, impacted by inflation.

- a reinforcement of the Flexibility instrument by €3 billion.

At the same time the European Commission presented a proposal for a second basket of new own resources to ensure more EU revenues and avoid undue cuts to Union programmes or excessive increases in Member State contributions.

The first discussions in the Council took place on 10 July 2023 during the General Affairs Council. The Commission presented the package to the Council, and ministers made their initial comments. A draft negotiating box was drawn up on 30 August, under the responsibility of the Presidency of the Council, to facilitate the discussions.

In the meantime the European Parliament defined its position on the revision of the MFF in October in an interim report. Members stressed the need for a swift adoption of the MFF revision, to enter into force on 1 January 2024.

On the Ukraine Facility, the report welcomed Commission's proposal. With regard to the expenditure, the EP report proposed an additional €5 billion to be added to the ceilings of the different headings proposed by the Commission (current prices):

- Heading 1: increase of the ceiling by €2 billion
- Heading 4: increase of the ceiling by €1 billion (to be applied from 2024)
- Heading 5: increase of the ceiling by €1 billion
- Heading 6: increase of the ceiling by €1 billion.

Concerning the special instruments, the EP proposed a further €5 billion in addition to the amounts proposed by the Commission: €3 billion for the Flexibility Instrument and €2 billion for the Solidarity and Emergency Aid Reserve (SEAR).

Regarding NGEU repayment costs, Parliament called for a structural solution and all EURI repayment costs to be placed over and above the MFF ceilings. They also insisted that the EURI Instrument must, as a general rule, be mobilised by Parliament and Council in the framework of the budgetary procedure.

After a period of deadlock, the European Council eventually agreed on a 
position supported by all Member States, at its special meeting on 1 February 2024. It endorsed the setting-up of the Ukraine Facility with € 50 billion (€17 billion in grants and € 33 billion in loans) and additional €14.6 billion to finance EU priorities (with € 10.6 billion from redeployments or cuts in other programmes). As requested by the European Parliament, it agreed on a new mechanism over and above the budget's ceilings to cover over-runs in the borrowing costs of the EU's recovery fund.

The Council and the Parliament reached a political agreement on 6 February. In the final negotiations with the Council, Parliament secured the smooth 
implementation of the EU4Health programme and by increasing the amount that will be re-used from decommitments under research for Horizon Europe. 

Parliament gave its consent, to the first ever revision of the MFF, during its plenary session, on 27 February 2024 and enabled the Council to conclude the legislative process on 28 February. The revised MFF regulation was published on 29 February but is applicable retroactively as from 1 January 2024.

Authors: K. Kowald and M. Pari, Members' Research Service, legislative-train@europarl.europa.eu

Commission Work Programme 2023, COM(2022) 548 final.

European Commission, Communication, Mid-term revision of the multiannual financial framework 2021-2027, COM(2023) 336 final

European Commission, staff working document, accompanying the Mid-term revision of the multiannual financial framework 2021-2027, SWD(2023) 336 final

Proposal for a Council Regulation amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027, COM(2023) 337 final.

Annex to the proposal to amend the Regulation laying down the multiannual financial framework for the years 2021 to 2027.

Interim Report on the proposal for a mid-term revision of the multiannual financial framework 2021-2027 (2023/0201R(APP).

European Council conclusions, 1 February 2024.

European Parliament press release, Deal on mid-term revision of EU’s long-term budget.

European Parliament's consent on the revision of the MFF 2021-2027 (2023/0201(APP).

European Parliament's Report on consent to the revision of the Multiannual Financial Framework 2021-2027 (2023/0201R(APP)

Council Regulation (EU, Euratom) 2024/765 of 29 February 2024 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027.

Further reading:

  • EPRS, K. Kowald and M. Pari, Long-term EU budget for 2021 to 2027: State of play, EPRS, European Parliament, Briefing, June 2023.
  • EPRS, K. Kowald and M. Pari, Revision of the EU's long-term budget for 2021 to 2027: Securing sufficient resources for the EU, EPRS, European Parliament, Briefing, September 2023.
  • EPRS, K. Kowald, M. Pari with R. Gallo, First-ever revision of the EU's long-term budget, Agreement between Parliament and Council, Briefing, February 2024.
  • EPRS, M. Pari, Parliament's consent to the revision of the 2021-2027 MFF, Plenary at a glance, February 2024.
As of 20/06/2024.