Wednesday 8. April 2020
#162 - July-August 2013


At last the Multiannual Financial Framework for 2014 – 2020 has been adopted.


Form counts as much as content. A new version of this adage was provided at the end of June during the final negotiations on the future Multiannual Financial Framework (MFF).

The chief representatives of the European Institutions have reached in extremis an agreement that meets the demands of the Members of the European Parliament who were powerless to influence either the sum total or the general direction of the European budgets for the period 2014-2020.


Decision-taking on the funds

The global sum of the multiannual financial framework (MFF) was fixed by the Heads of State and Government during the February Summit. With a commitment appropriation of €960 billion and a payment appropriation of €908 billion for the period 2014-2020, the European Council had opted for reducing the budget which is shared among the Member States, now numbering 28.  If budget cuts at national level are called for, this rules out – according to one accountancy argument – any rise in the amounts spent at European level. Given that it was non-negotiable, this item had to be purely and simply voted through by the European Parliament.


Nor was the general orientation of the budget up for negotiation. A real issue has emerged over the need for transfer mechanisms within the EU to provide solutions to cyclical economic imbalances, but that question will find no answer in the budgetary framework for the whole European Union. It is of concern to the seventeen Member States grouped together in the Eurozone; and a proposal in this direction was made by the German Chancellor just before the 27-28 June Summit.  Angela Merkel has put forward to the Bundestag the idea of creating a solidarity fund for the mid-term to support Eurozone members that find themselves in financial difficulties against a firm commitment on their part to adopt measures in favour of growth and competitiveness.


Discussions around the agreement

As it was powerless to challenge either the sum total or the general orientation of the MFF, the European Parliament  had already last March drawn up a list of demands regarding the manner of executing the European budget,  on which topic it intended to negotiate with the Commission and above all with the Council of Ministers using the ‘trialogue’ format. After several hours of discussion between EP President Martin Schulz, EC President José Manuel Barroso and Irish Prime Minister Enda Kenny - heading the current Irish Presidency of the Council - agreement was finally reached on the morning of 27 June, just a few hours before the European Council met.


This agreement provides first of all for much greater flexibility in relation to annual budgeting. Money that has not been spent by the end of the budget period will not be returned completely to the treasuries of the Member States. Up to a total of €26 million of the MFF can be carried over from one year to the next. The agreement also provides for a clause to review the MFF after the European elections, which would constitute for EP President Martin Schulz “one of the major advances” of the last-minute negotiations, even though an effective review would require unanimity from the Member States.


Other features of the agreement: The period of the next MFF is to be reduced to five years to coincide with the Commission and Parliamentary terms. Finally, a working group will explore the creation of a European tax (like the tax on financial transactions) so that the European budget will no longer depend only on national contributions. Its conclusions will be submitted to the EP in 2016.


… and it’s not over yet

Translation of the political drama of these past few months over the MFF into legal terms is not expected to be ready before autumn. Preparation for printing of the texts on the Common Agricultural Policy, the Cohesion Funds, research, education etc which will be transposing the political agreement into legislative documents will obviously take several weeks. These texts will only be put to the final vote in the European Parliament towards mid-October. Discussions could be started up again at that moment, but devotees of budgetary negotiations are few and far between in the European Parliament. Given its initial demands and the results obtained, the latter could not pride itself on any great success achieved before now, and its chances of doing better later are almost zero.


Stefan Lunte




Translated from the original text in French

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