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Budgetary control of the Sustainable Development Goals in the EU budget

27-07-2021

As of July 2021, only very limited conclusions can be drawn about the performance of EU policies and programmes towards the Sustainable Development Goals. With only nine years left until 2030, this raises the question as to whether the EU budget is used efficiently via the many spending programmes. This briefing explores what kind of measures are in place to ensure that the implementation of the EU budget contributes effectively to the SDGs at both the EU- and Member States level.

As of July 2021, only very limited conclusions can be drawn about the performance of EU policies and programmes towards the Sustainable Development Goals. With only nine years left until 2030, this raises the question as to whether the EU budget is used efficiently via the many spending programmes. This briefing explores what kind of measures are in place to ensure that the implementation of the EU budget contributes effectively to the SDGs at both the EU- and Member States level.

National budgets and the European Union budget since 2007

16-07-2021

National budgets are a competence of the national governments of the Member States. However, EU countries adopting the euro have to meet specific conditions designed to ensure economic convergence, known as the convergence criteria or Maastricht criteria (agreed by the Member States in the Maastricht Treaty of 1992). They include conditions on sound and sustainable public finances, along with the macroeconomic indicators - price stability, durability of convergence, and exchange rate stability.

National budgets are a competence of the national governments of the Member States. However, EU countries adopting the euro have to meet specific conditions designed to ensure economic convergence, known as the convergence criteria or Maastricht criteria (agreed by the Member States in the Maastricht Treaty of 1992). They include conditions on sound and sustainable public finances, along with the macroeconomic indicators - price stability, durability of convergence, and exchange rate stability.

Brexit Adjustment Reserve

15-07-2021

As part of the preparations for the United Kingdom's withdrawal from the European Union, the European Council agreed in July 2020 to create a Brexit adjustment reserve within the special instruments outside the budget ceilings of the European Union's multiannual financial framework, with a budget of €5 billion to counter unforeseen and adverse consequences in Member States and sectors that are most affected. The Commission adopted a proposal for a regulation on the Brexit adjustment reserve on 25 ...

As part of the preparations for the United Kingdom's withdrawal from the European Union, the European Council agreed in July 2020 to create a Brexit adjustment reserve within the special instruments outside the budget ceilings of the European Union's multiannual financial framework, with a budget of €5 billion to counter unforeseen and adverse consequences in Member States and sectors that are most affected. The Commission adopted a proposal for a regulation on the Brexit adjustment reserve on 25 December 2020. The reserve will support public expenditure incurred by Member States from 1 January 2020 to 31 December 2023 for eligible measures, which include support for affected sectors, training, and new border facilities. Funding will be available for all Member States, distributed in several allocation tranches, with 80 % of the resources due to be allocated to Member States in the form of pre-financing, to be disbursed in 2021, 2022 and 2023, and the remainder to be made available in 2025, where applicable. Each country's allocation is calculated based on the importance of its trade with the UK and, where applicable, its dependence on fisheries in UK waters and the size of the population of maritime border regions with the UK. In the European Parliament, the file was assigned to the Committee on Regional Development, which adopted its report on 25 May 2021. A final political trilogue meeting took place on 17 June 2021, confirming the political agreement reached between the Council and Parliament. That agreement now needs to be formally adopted in plenary, expected in September 2021, and then by the Council. Second edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.

The Sustainable Development Goals in the EU budget

15-07-2021

This briefing will present an overview of the implementation of the SDGs in the EU long-term budget.

This briefing will present an overview of the implementation of the SDGs in the EU long-term budget.

The integration of the European Development Funds into the MFF 2021 - 2027

18-06-2021

This briefing presents detail on the current Multiannual Financial Framework (MFF) 2021-2027 that marks a turning point, in that it brings together all the EU’s different funds for development cooperation in a single instrument, in order to ensure consistency between different fields of external action.

This briefing presents detail on the current Multiannual Financial Framework (MFF) 2021-2027 that marks a turning point, in that it brings together all the EU’s different funds for development cooperation in a single instrument, in order to ensure consistency between different fields of external action.

External author

Alexandra POUWELS

Financing for Africa – The EU budget and beyond

15-06-2021

Africa, a continent of strategic importance for the EU, has been in the spotlight of EU attention in recent years for a variety of reasons. In 2020, the Cotonou Agreement, which had governed EU-sub-Saharan Africa relations since 2000, was set to expire. The European Commission and EU High Representative adopted a joint communication in 2020, charting the way towards a new strategy for Africa. However, the sixth EU African Union Summit, planned for the end of 2020, was postponed due to the global ...

Africa, a continent of strategic importance for the EU, has been in the spotlight of EU attention in recent years for a variety of reasons. In 2020, the Cotonou Agreement, which had governed EU-sub-Saharan Africa relations since 2000, was set to expire. The European Commission and EU High Representative adopted a joint communication in 2020, charting the way towards a new strategy for Africa. However, the sixth EU African Union Summit, planned for the end of 2020, was postponed due to the global pandemic. Thus, 2021 appears to be the next key year for EU-Africa relations, in light of the planned summit and the prospective adoption of both a new EU strategy for Africa and the post-Cotonou agreement, expected to transform these relations into a 'partnership of equals'. The EU's long-term budget – the multiannual financial framework (MFF) – has also featured high on the EU's agenda. The expiry of the previous MFF (2014-2020) in December 2020 and the entry into force of the new, restructured MFF for the 2021-2027 period in January 2021 coincided with efforts to reinvigorate and relaunch relations with Africa. Financial support is one of the key tools in the EU's external action, and, as before, it will also underpin future relations with Africa. This briefing aims to map the main EU financing instruments of relevance to Africa, including the funds that are outside the EU budget. It also points out the main novelties in the new MFF that have an impact on financing for Africa, such as the inclusion of the European Development Fund in the EU budget and the merging of most previous instruments into a single one, the NDICI (Global Europe Instrument). In the next seven years, the EU aims to spend its funds in a more flexible and streamlined way. This would enable it to respond quickly to crises and urgent needs in Africa and the rest of the world, to better coordinate its spending with its partners following a 'Team Europe' approach, and to leverage additional investment, including from the private sector, to boost growth and reduce the gap in official development assistance needed to achieve the sustainable development goals by 2030.

Background note on “Simplification” for the CONT hearing: “Will simplification suggested for the new MFF period bring the necessary balance between more efficient, effective and correct spending of EU funds?”

15-06-2021

This note intends to provide general information about simplification as well as to look a bit more in detail on this issue in the framework of Cohesion Policy, Common Agricultural Policy and Research. These three EU policies represent sectors that largely benefit from the financing of the EU budget and have experienced simplification due to the response of the Commission, the European Parliament and the Council to the requests of final beneficiaries. At the same time, there have been repeated ...

This note intends to provide general information about simplification as well as to look a bit more in detail on this issue in the framework of Cohesion Policy, Common Agricultural Policy and Research. These three EU policies represent sectors that largely benefit from the financing of the EU budget and have experienced simplification due to the response of the Commission, the European Parliament and the Council to the requests of final beneficiaries. At the same time, there have been repeated calls from the European Court of Auditors regarding these policies to reduce their complexity and further apply simplification measures, without compromising their functioning and the sound financial management of the EU budget.

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.

Recovery plan for Europe: State of play

07-06-2021

In December 2020, the adoption of the legislative package on the 2021-2027 multiannual financial framework (MFF) and the Next Generation EU (NGEU) recovery instrument marked the end of an important stage in the process of launching a unique financial stimulus package – the recovery plan for Europe. However, in order to make the plan fully operational, additional conditions need to be met and preparatory steps completed. First, there is the financing of NGEU, based on borrowing operations carried ...

In December 2020, the adoption of the legislative package on the 2021-2027 multiannual financial framework (MFF) and the Next Generation EU (NGEU) recovery instrument marked the end of an important stage in the process of launching a unique financial stimulus package – the recovery plan for Europe. However, in order to make the plan fully operational, additional conditions need to be met and preparatory steps completed. First, there is the financing of NGEU, based on borrowing operations carried out by the European Commission on behalf of the European Union. These operations could start only once the Member States had ratified the Own Resources Decision (ORD). This procedure was completed before the end of May 2021. In the meantime, the Commission started preparing for its role as a borrower on an unprecedented scale and published its diversified funding strategy for the financing of NGEU. The Commission has ensured that the preparations are advanced and that it would be ready to begin the borrowing operations as soon as ratification of the ORD was finalised and the act in force. In parallel, preparations are ongoing for the spending of the biggest part of NGEU (90 %) under the Recovery and Resilience Facility (RRF). This process includes the drawing up of national recovery and resilience plans by the Member States, their evaluation by the European Commission, and approval by the Council of the EU. Only then will the Commission conclude an agreement with each Member State on a legal commitment authorising the financial contribution to be made, and begin pre-financing. An indicative timeline of the whole process shows that the first payments for Member States could be made between July and September 2021.

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.

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