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Own resources of the European Union: Reforming the EU's financing system

09-06-2021

On 1 June 2021, the decision that reforms the financing system of the EU budget entered into force, following its ratification by all Member States. It introduces three significant innovations in the own resources system, applying retroactively from 1 January 2021. The maximum level of resources that can be called from Member States permanently rises from 1.20 % to 1.40 % of EU gross national income (GNI). A temporary increase in the own resources ceiling, worth a further 0.60 % of EU GNI, is devoted ...

On 1 June 2021, the decision that reforms the financing system of the EU budget entered into force, following its ratification by all Member States. It introduces three significant innovations in the own resources system, applying retroactively from 1 January 2021. The maximum level of resources that can be called from Member States permanently rises from 1.20 % to 1.40 % of EU gross national income (GNI). A temporary increase in the own resources ceiling, worth a further 0.60 % of EU GNI, is devoted exclusively to the financing of Next Generation (NGEU), enabling the Commission to borrow resources on an unprecedented scale on the capital markets, with a view to financing the recovery. A national contribution linked to non-recycled plastic packaging waste is introduced, the first new EU own resource to be created since 1988. In addition, Parliament pushed for a broader reform of the financing system underlining that the introduction of a basket of new own resources should cover at least the repayment costs of NGEU (for both principal and interest). Parliament managed to include a detailed roadmap for the introduction of various additional new own resources by 2026 in the interinstitutional agreement on budgetary matters with the Council and the European Commission. Envisaged resources are linked to EU policies on climate and the single market. Fourth edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.

National ratification of the Own Resources Decision: Procedure completed on 31 May 2021

02-06-2021

The Own Resources Decision (ORD) establishes how the EU budget is financed. Its entry into force requires approval by all EU Member States according to their constitutional requirements. In a majority of Member States, national parliaments are responsible for ratifying the decision. In the others, the government alone decides on the approval. Completion of the ratification procedure by all Member States has generally required more than two years. However, there was a greater sense of urgency for ...

The Own Resources Decision (ORD) establishes how the EU budget is financed. Its entry into force requires approval by all EU Member States according to their constitutional requirements. In a majority of Member States, national parliaments are responsible for ratifying the decision. In the others, the government alone decides on the approval. Completion of the ratification procedure by all Member States has generally required more than two years. However, there was a greater sense of urgency for the ORD adopted by the Council in December 2020, since its entry into force is a pre-condition for the launch of the Next Generation EU (NGEU) recovery instrument. The objective was to complete the ratification procedure before summer 2021, with a view to ensuring the timely launch of NGEU. All Member States have now ratified the ORD, and notified the Council accordingly before the end of May. Therefore, on 1 June 2021, the new ORD entered into force, enabling the Commission to start borrowing resources for the recovery instrument. This is a further update of a Briefing of which the previous edition was published on 20 May 2021.

Customs programme: Supporting cooperation to strengthen the customs union

22-04-2021

On 18 June 2018, the Commission put forward a proposal for a regulation establishing a Customs programme for cooperation in the field of customs over the 2021-2027 MFF period, a successor to Customs 2020. The programme's main objective is to fund actions aimed at strengthening the customs union. On 15 December 2020, the co-legislators reached agreement in trilogue. The Council adopted its first-reading position on 1 March 2021. On 8 March 2021, IMCO – the committee responsible for the file in the ...

On 18 June 2018, the Commission put forward a proposal for a regulation establishing a Customs programme for cooperation in the field of customs over the 2021-2027 MFF period, a successor to Customs 2020. The programme's main objective is to fund actions aimed at strengthening the customs union. On 15 December 2020, the co-legislators reached agreement in trilogue. The Council adopted its first-reading position on 1 March 2021. On 8 March 2021, IMCO – the committee responsible for the file in the European Parliament – adopted its recommendation for second reading of the Customs programme by the Parliament. The Parliament voted to adopt the first-reading position without amendments on 10 March 2021, and the final act was signed the following day. The regulation was published in the Official Journal on 15 March 2021 and entered into force immediately, and with retroactive application as of 1 January 2021. First edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.

Establishing and implementing Horizon Europe

21-04-2021

In 2018, under the new Multiannual Financial Framework for 2021-2027, the Commission adopted a proposal for the next EU research and innovation programme, Horizon Europe. The programme will help the Union to become resilient to future crises, to address challenges such as climate change, and to foster digitalisation. Following an early second-reading agreement reached in December 2020, Parliament is expected to vote on adopting the text in April, thus finalising the legislative procedure. It will ...

In 2018, under the new Multiannual Financial Framework for 2021-2027, the Commission adopted a proposal for the next EU research and innovation programme, Horizon Europe. The programme will help the Union to become resilient to future crises, to address challenges such as climate change, and to foster digitalisation. Following an early second-reading agreement reached in December 2020, Parliament is expected to vote on adopting the text in April, thus finalising the legislative procedure. It will also vote on its opinion on the accompanying proposal for the specific implementing programme.

European Globalisation Adjustment Fund

21-04-2021

The 2018 European Commission's proposal to revise the European Globalisation Adjustment Fund, modified under the 2020 recovery plan for Europe, introduces changes to eligibility criteria, co-financing rules and the mobilisation procedure. Outside the 2021-2027 Multiannual Financial Framework (MFF) ceilings, it should continue to serve as a solidarity and emergency fund used on an ad hoc basis. Following an early second-reading agreement reached in January 2021, Parliament is expected to vote in April ...

The 2018 European Commission's proposal to revise the European Globalisation Adjustment Fund, modified under the 2020 recovery plan for Europe, introduces changes to eligibility criteria, co-financing rules and the mobilisation procedure. Outside the 2021-2027 Multiannual Financial Framework (MFF) ceilings, it should continue to serve as a solidarity and emergency fund used on an ad hoc basis. Following an early second-reading agreement reached in January 2021, Parliament is expected to vote in April to formally adopt the proposal.

Citizens, Equality, Rights and Values programme

21-04-2021

Given the extent of inequality and discrimination, challenges to fundamental rights and citizens' lack of awareness of the rights they enjoy, the EU institutions have recognised the importance of funding to protect core EU values and fundamental rights, support civil society organisations and sustain open, democratic and inclusive societies. In May 2018, the European Commission adopted a proposal for a regulation establishing a new Rights and Values programme as part of the new 2021-2027 Multiannual ...

Given the extent of inequality and discrimination, challenges to fundamental rights and citizens' lack of awareness of the rights they enjoy, the EU institutions have recognised the importance of funding to protect core EU values and fundamental rights, support civil society organisations and sustain open, democratic and inclusive societies. In May 2018, the European Commission adopted a proposal for a regulation establishing a new Rights and Values programme as part of the new 2021-2027 Multiannual Financial Framework (MFF). An early second-reading agreement was reached with the Council in trilogue negotiations, which is now expected to be voted by Parliament during the April 2021 session.

Single market, competitiveness of enterprises and European statistics 2021-2027

21-04-2021

In 2018, under the new Multiannual Financial Framework (MFF) for 2021-2027, the Commission put forward a proposal for a programme aimed at improving the functioning of the single market, at fostering the competitiveness of companies, particularly small and medium-sized enterprises (SMEs), and at ensuring the provision of high quality statistics in all EU policy areas. Following an early second-reading agreement reached on 8 December 2020, Parliament is expected to formally adopt the text at second ...

In 2018, under the new Multiannual Financial Framework (MFF) for 2021-2027, the Commission put forward a proposal for a programme aimed at improving the functioning of the single market, at fostering the competitiveness of companies, particularly small and medium-sized enterprises (SMEs), and at ensuring the provision of high quality statistics in all EU policy areas. Following an early second-reading agreement reached on 8 December 2020, Parliament is expected to formally adopt the text at second reading in April, finalising the legislative procedure.

Cohesion, resilience and values: Heading 2 of the 2021-2027 MFF

14-04-2021

Heading 2 – Cohesion, resilience and values – is the biggest of the seven headings in the multiannual financial framework (MFF) for the 2021-2027 period in terms of budget. Since about 87 % of the heading falls under shared management and will be distributed to national envelopes, for the Member States it is a particularly important part of the MFF. It is also the most diverse heading in terms of the types of programme and fund included. It encompasses expenditure on cohesion, one of the EU's long-standing ...

Heading 2 – Cohesion, resilience and values – is the biggest of the seven headings in the multiannual financial framework (MFF) for the 2021-2027 period in terms of budget. Since about 87 % of the heading falls under shared management and will be distributed to national envelopes, for the Member States it is a particularly important part of the MFF. It is also the most diverse heading in terms of the types of programme and fund included. It encompasses expenditure on cohesion, one of the EU's long-standing policies, on an entirely new budgetary instrument supporting economic recovery and resilience, and on other increasingly important goals, including youth, the creative sector, values, equality and the rule of law. Moreover, the bulk of the Next Generation EU instrument will be channelled through programmes under Heading 2. This briefing presents Heading 2 in detail. It aims to provide some clarity on its structure and allocation, and is structured around three spending areas: cohesion; recovery; and citizens and values. In the 2021-2027 MFF, the allocation on economic, social and territorial cohesion (subheading 2a) – the budget for cohesion policy – is about 10 % lower than its equivalent, subheading 1b, in the 2014-2020 MFF. Additional resources from REACT-EU, a temporary instrument financed under the Next Generation EU instrument (NGEU), will lift the cohesion policy budget to a level comparable with the allocation under the previous MFF. This is an update of a briefing from January 2019.

The role of the European Council in negotiating the 2021-27 MFF

09-04-2021

To assess the role of the European Council in the process of the adoption of the multiannual financial framework and its evolution over time, this paper provides a comparative analysis of the similarities and differences between the European Council's involvement in the 2014‑2020 and 2021‑2027 MFF negotiations. An additional content analysis of EU leaders' Twitter communication on the MFF focuses in particular on key moments in the European Council's decision-making process.  The 2021‑2027 MFF negotiations ...

To assess the role of the European Council in the process of the adoption of the multiannual financial framework and its evolution over time, this paper provides a comparative analysis of the similarities and differences between the European Council's involvement in the 2014‑2020 and 2021‑2027 MFF negotiations. An additional content analysis of EU leaders' Twitter communication on the MFF focuses in particular on key moments in the European Council's decision-making process.  The 2021‑2027 MFF negotiations provide yet another example of the ways in which EU leaders not only intervene in the parts of the policy cycle envisaged for the European Council in the Treaties, but extend the scope of their involvement and influence, to areas where this is expressly prohibited by the Treaties, such as regarding legislation. The European Council's involvement in legislative matters against the letter of the Treaties can be considered both as 'déjà vu' and as a further evolution of its involvement.

EU4Health programme 2021-2027

03-03-2021

On 28 May 2020, the European Commission adopted a proposal for a regulation on the establishment of a programme for the Union's action in the field of health for the 2021-2027 period (EU4Health programme). Interinstitutional negotiations between the European Parliament and the Council were concluded on 14 December 2020 with a provisional agreement on the programme, including a budget of €5.1 billion. Parliament's Committee on the Environment, Public Health and Food Safety endorsed the final compromise ...

On 28 May 2020, the European Commission adopted a proposal for a regulation on the establishment of a programme for the Union's action in the field of health for the 2021-2027 period (EU4Health programme). Interinstitutional negotiations between the European Parliament and the Council were concluded on 14 December 2020 with a provisional agreement on the programme, including a budget of €5.1 billion. Parliament's Committee on the Environment, Public Health and Food Safety endorsed the final compromise on 15 January 2021. Parliament's first-reading vote is expected during the March I plenary session.

Upcoming events

21-06-2021
Ensuring effective protection of European consumers in the digital economy
Hearing -
IMCO
22-06-2021
AFCO ICM on the Reform of European Electoral Law & Parliament's Right of Inquiry
Other event -
AFCO
22-06-2021
The development of new tax practices:what new schemes should the EU pay attention to?
Hearing -
FISC

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