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Matching priorities and resources in the EU budget: Climate action, migration and borders

03-05-2021

Over the past two decades, the European Union (EU) has been entrusted with a growing number of objectives and responsibilities. However, ensuring financing of related activities through the EU budget has often proven problematic, as this has long been capped at around 1 % of the Union's gross national income (GNI). During the preparation of the post-2020 EU multiannual financial framework (MFF), climate action, migration and border management were identified among the emerging priorities that required ...

Over the past two decades, the European Union (EU) has been entrusted with a growing number of objectives and responsibilities. However, ensuring financing of related activities through the EU budget has often proven problematic, as this has long been capped at around 1 % of the Union's gross national income (GNI). During the preparation of the post-2020 EU multiannual financial framework (MFF), climate action, migration and border management were identified among the emerging priorities that required increased joint action and funding. The agreement on EU finances for 2021 to 2027 provides for a significant relative increase in the financial resources devoted to these policy areas. In absolute figures, the reinforcements are stronger for climate action than for migration and borders. Underpinned by the European Green Deal strategy, climate action will receive the bulk of its resources through the incorporation of climate considerations and objectives across all relevant EU funding instruments (climate mainstreaming). Next Generation EU (NGEU), the temporary instrument to aid recovery from the coronavirus pandemic, will play a major role in the boost to climate-relevant resources. In total, these could amount to some €550 billion (in 2018 prices, corresponding to 30 % of total MFF and NGEU resources). For the first time, migration and border management have a dedicated heading, accounting for 2.1 % of MFF resources. Among other activities, additional allocations will contribute to the agreed reinforcement of the European Border and Coast Guard Agency. Opinion surveys show that respondents see climate change and migration among the main global challenges for the EU, but there are gaps between perceptions and expectations of the role of the EU budget in these two domains. The European Parliament, which is a strong advocate of a robust EU budget commensurate with the Union's responsibilities, managed to secure additional resources for instruments relevant to both groups of policies, as well as the enhancement of the climate mainstreaming methodology. The Parliament plays a key role in shaping and scrutinising how the funding allocated to the policy areas is implemented. Other measures to reinforce the EU budget's capacity to deliver in the areas of climate action, migration and borders seek to improve synergies between budgetary instruments.

Communicating and perceiving the EU budget: Challenges and outcomes

03-05-2021

This analysis presents the EU budget as a subject of communication, while also outlining its importance for the perception of the EU's democratic legitimacy and the challenges involved in presenting it to the citizens. Currently, there are more Europeans supporting a bigger EU budget than ever before (48 %), and the distribution of opinions cannot be explained simply by identifying them as belonging to the group of the net beneficiaries or that of the net contributors. Citizens' perceptions and desires ...

This analysis presents the EU budget as a subject of communication, while also outlining its importance for the perception of the EU's democratic legitimacy and the challenges involved in presenting it to the citizens. Currently, there are more Europeans supporting a bigger EU budget than ever before (48 %), and the distribution of opinions cannot be explained simply by identifying them as belonging to the group of the net beneficiaries or that of the net contributors. Citizens' perceptions and desires regarding EU budget spending priorities are very different. Moreover, their perceptions are rather different from the actual EU spending priorities as well. The size and scope of the EU budget, budgetary cycles and timelines, revenue and expenditure structures, performance, different EU and national, institutional and political actors – these are all factors influencing the way citizens understand and relate to the EU budget. Some recent changes, such as the increased focus on results in budgetary reporting and the reform of the system of own resources, have the potential to contribute positively to the EU budget communication and to make it more comprehensible to citizens.

Policy Departments’ Monthly Highlights - April 2021

21-04-2021

The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

The Monthly Highlights publication provides an overview, at a glance, of the on-going work of the policy departments, including a selection of the latest and forthcoming publications, and a list of future events.

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.

Single market, innovation and digital: Heading 1 of the 2021-2027 MFF

14-04-2021

The European Union's long-term budget, the multiannual financial framework (MFF) sets out the maximum annual amounts of spending for a seven-year period. The 2021 2027 MFF is structured around the EU's spending priorities, reflected in broad categories of expenditure or 'headings'. Following the Covid 19 outbreak, the EU's recovery instrument, Next Generation EU (NGEU), will reinforce the EU long-term budget. Heading 1 – Single market, innovation and digital – covers spending in four policy areas ...

The European Union's long-term budget, the multiannual financial framework (MFF) sets out the maximum annual amounts of spending for a seven-year period. The 2021 2027 MFF is structured around the EU's spending priorities, reflected in broad categories of expenditure or 'headings'. Following the Covid 19 outbreak, the EU's recovery instrument, Next Generation EU (NGEU), will reinforce the EU long-term budget. Heading 1 – Single market, innovation and digital – covers spending in four policy areas: research and innovation, European strategic investments, single market, and space. With an allocation of €132.8 billion (in 2018 prices), it represents 12.4 % of the MFF. It is complemented by additional funds of €10.6 billion from the recovery instrument allocated under two flagship programmes, Horizon Europe and InvestEU for the duration of NGEU. This heading is key for the mobilisation of private investment and EU growth, issues that have been the centre of focus throughout the discussions on the future financing of the EU. This briefing presents the structure and budget allocation under Heading 1. It describes the evolution of the budgetary positions in the different steps of the negotiations and presents the policy clusters. It then details some considerations that could influence forthcoming budgetary discussions. This is an update of a briefing from January 2020.

Natural resources and environment: Heading 3 of the 2021-2027 MFF

14-04-2021

Dedicated to programmes and funds supporting agriculture and maritime policy, and environment and climate change, Heading 3 is the second biggest in terms of funding in the new multiannual financial framework (MFF) for 2021 2027. The two agricultural funds – the European Agricultural Guarantee Fund (EAGF) and the Agricultural Fund for Rural Development (EAFRD) – continue to absorb the greater part of the financial resources under this heading. However, the European Commission had proposed an amount ...

Dedicated to programmes and funds supporting agriculture and maritime policy, and environment and climate change, Heading 3 is the second biggest in terms of funding in the new multiannual financial framework (MFF) for 2021 2027. The two agricultural funds – the European Agricultural Guarantee Fund (EAGF) and the Agricultural Fund for Rural Development (EAFRD) – continue to absorb the greater part of the financial resources under this heading. However, the European Commission had proposed an amount of €324 284 million (2018 prices) to cover both funds, which is a decrease of around €60 000 million (or 15 %) compared to the previous MFF (2014 2020) after deducting United Kingdom (UK) spending. In its November 2018 resolution on the European Commission proposal for the new MFF, the European Parliament raised the budget for agricultural and maritime policy back to the level of the 2014 2020 MFF, to €391 198 million (2018 prices). Parliament also asked for a new Energy Transition Fund, with a budget of €4 800 million (2018 prices) for 2021 2027, to address the negative socio-economic impact on workers and communities affected by the transition from a coal and carbon dependent economy to a low-carbon economy. According to the final agreement reached between the Council and the European Parliament on 10 November 2020, the commitment appropriations for natural resources and environment will total €356 374 million under the 2021 2027 MFF, plus €17 500 million under the recovery instrument Next Generation EU (NGEU), which represents a total amount of €373.874 million for 2021 to 2027 (2018 prices). This means the cuts in the overall budget for Heading 3 (plus NGEU) represent a reduction of 6.4 % in spending, compared to the 2014 2020 MFF. The share of Heading 3 within the overall 2021 2027 MFF will be 32.2 % or 20.5 % of the 2021 2027 MFF, plus NGEU. This is an update of a briefing from January 2020.

Migration and border management: Heading 4 of the 2021-2027 MFF

14-04-2021

The Treaty of Lisbon makes explicit reference to pooling financial resources to support common policies on asylum, immigration and external borders. Given the increasing salience of the policy areas in recent years, the European Union (EU) has for the first time established a specific heading devoted to migration and border management in its new multiannual financial framework (MFF). Endowed with €22.7 billion (2018 prices) for the years 2021 to 2027, the heading finances the activities of specific ...

The Treaty of Lisbon makes explicit reference to pooling financial resources to support common policies on asylum, immigration and external borders. Given the increasing salience of the policy areas in recent years, the European Union (EU) has for the first time established a specific heading devoted to migration and border management in its new multiannual financial framework (MFF). Endowed with €22.7 billion (2018 prices) for the years 2021 to 2027, the heading finances the activities of specific EU decentralised agencies, such as the European Border and Coast Guard Agency (Frontex) and the European Asylum Support Office (EASO), as well as two funding instruments, likely to be named the Asylum, Migration and Integration Fund (AMIF) and Integrated Border Management Fund (IBMF). The regulations governing the two funds are being finalised by the co-legislators. When designing the proposals for them, the European Commission aimed to improve synergies with other EU funding instruments and increase capacity to react to evolving needs. Expenditure for these policy areas is still a minor share of the EU budget (2.1 %, excluding the resources from the Next Generation EU recovery instrument), but these allocations represent a significant increase in relative terms, as compared with the 2014-2020 period. The reinforcement seeks to address weaknesses of the previous MFF that the 2015-2016 refugee crisis exposed, obliging EU institutions to use the flexibility provisions of the framework extensively. However, the Commission had proposed larger increases that the European Council cut. In the MFF negotiations with the Council, the European Parliament managed to strengthen the 'border management' policy cluster, which will gradually bring the overall resources of the heading to €23.7 billion by 2027. This is an update of briefing published in January 2020.

Security and defence: Heading 5 of the 2021-2027 MFF

14-04-2021

In the 2021-2027 multiannual financial framework (MFF), a separate Heading 5 is dedicated to security and defence. Although the European Union (EU) has already financed action linked to security and defence, this is the first time that this policy area has been so visibly underlined in the EU budget structure. With an allocation of €13 185 million (in 2018 prices), Heading 5 is the smallest of the seven MFF headings and represents 1.2 % of the total MFF. Under the new 2021 2027 MFF, Heading 5: Security ...

In the 2021-2027 multiannual financial framework (MFF), a separate Heading 5 is dedicated to security and defence. Although the European Union (EU) has already financed action linked to security and defence, this is the first time that this policy area has been so visibly underlined in the EU budget structure. With an allocation of €13 185 million (in 2018 prices), Heading 5 is the smallest of the seven MFF headings and represents 1.2 % of the total MFF. Under the new 2021 2027 MFF, Heading 5: Security and Defence consists of two 'policy clusters': security and defence, containing new and old initiatives. The security policy cluster includes the continuation of the Internal Security Fund – Police instrument, funding for nuclear decommissioning and funding for three EU decentralised agencies in the area of security. The defence policy cluster includes some novelties: a European Defence Fund and the military mobility programme, which is a part of the Connecting Europe Facility (TEN-Ts). This briefing presents the structure and budget allocations under Heading 5. It describes the policy clusters and programmes, including references to their new legal bases. Moreover the briefing sketches the evolution of Heading 5 in the context of MFF negotiations. This is an update of a briefing of January 2020.

Neighbourhood and the world: Heading 6 of the 2021-2027 MFF

14-04-2021

In May 2018, the European Commission published its first proposal for the multiannual financial framework (MFF) for the 2021-2027 period, and a set of individual sectoral proposals. After months of negotiations and given the significantly changed context following the outbreak of the Covid-19 pandemic, the Commission updated its proposals in May 2020. In the new MFF, external action is covered by Heading 6: Neighbourhood and the World, replacing the previous Heading 4: Global Europe. Taking into ...

In May 2018, the European Commission published its first proposal for the multiannual financial framework (MFF) for the 2021-2027 period, and a set of individual sectoral proposals. After months of negotiations and given the significantly changed context following the outbreak of the Covid-19 pandemic, the Commission updated its proposals in May 2020. In the new MFF, external action is covered by Heading 6: Neighbourhood and the World, replacing the previous Heading 4: Global Europe. Taking into account the evolving international and EU context and the conclusions of the previous MFF's mid-term review, the Commission has aimed to make the EU's external action budget simpler and more flexible, to enable the EU to engage more strategically with partner countries throughout the financing period starting in 2021. Heading 6 comes with a slightly increased budget and important structural changes. Most hitherto stand-alone external financing instruments have been merged in a single one, the Neighbourhood, Development and International Cooperation Instrument (NDICI), which also integrates the biggest EU external financing fund, the European Development Fund, previously an off-budget instrument. Another new element is the establishment of an off-budget instrument, the European Peace Facility, to fund security and defence-related actions. With these changes, the Commission aims in part to take into account the need for the EU to align its actions with its international commitments under the UN's 2030 Sustainable Development Agenda, the Paris Climate Agreement, the new EU Global Strategy, the European consensus on development, and European neighbourhood policy. It also aims to make EU added value, relevance and credibility more visible. Parliament and Council reached a compromise on the 2021-2027 MFF in November 2020. In December, Council adopted the MFF Regulation by unanimity, with Parliament's consent. Political agreement on the NDICI regulation, in particular, was reached in mid-December, and Parliament gave its provisional agreement to the instrument in mid-March 2021. Finalisation of the text and other legislative documents relating to the other external financing instruments continues in 2021. This is an update of a briefing from January 2020.

European public administration: Heading 7 of the 2021-2027 MFF

14-04-2021

In May 2018, the European Commission published its initial proposal for the EU's long-term budget for 2021-2027, the multiannual financial framework (MFF), followed by a subsequent proposal in May 2020. The 2021-2027 MFF was adopted in December 2020 and has been in force since 1 January 2021. It is structured around seven headings, with a total budget of €1 074.3 billion in 2018 prices. The greater part of these funds – over 93 % – is dedicated to a variety of EU programmes, and is invested primarily ...

In May 2018, the European Commission published its initial proposal for the EU's long-term budget for 2021-2027, the multiannual financial framework (MFF), followed by a subsequent proposal in May 2020. The 2021-2027 MFF was adopted in December 2020 and has been in force since 1 January 2021. It is structured around seven headings, with a total budget of €1 074.3 billion in 2018 prices. The greater part of these funds – over 93 % – is dedicated to a variety of EU programmes, and is invested primarily in Member States, and partially in partner countries as external spending. The administrative expenses of the EU account for approximately 6.8 % of the 2021-2027 MFF. In the preceding MFF, for the 2014-2020 period, administration came under Heading 5, while in the 2021-2027 MFF, administrative costs are to be funded under Heading 7, entitled 'European public administration', which includes a sub-heading for the administrative expenditure of the institutions. While in other policy areas there is more significant restructuring, the heading that covers EU administrative costs is comparable to that of the previous MFF in size and structure. In its initial proposals for Heading 7, the Commission maintained that to ensure the smooth functioning of the Union the EU budget must finance its administration adequately, particularly in view of the fact that the EU civil service underwent two successive and substantial reforms within a short time frame, in 2004 and 2014. The Commission has aimed to ensure that the EU can rely on a highly qualified administrative service that is balanced in terms of geography and gender. While the European Parliament backed the Commission's 2018 proposal, in its conclusions from the July 2020 summit, the Council proposed a €2 billion cut to allocations for this heading, which was eventually adopted. The total budget is €73 102 million (2018 prices) for the period covered by the next MFF. This is an update of a briefing from January 2020.

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