A multiannual EU Budget that puts the money where it is most needed

Next week, on Tuesday 19 November, the European Parliament plenary will give its green light to the Council regulation laying down the 2014-2020 Multiannual Financial Framework. With the EPP Group in a leading role the European Parliament managed to secure important improvements to the functioning of the seven-year budget, so as to make the most of every euro that is spent.

What is the MFF?

The Multiannual Financial Framework (MFF) is a spending plan that translates the EU priorities into financial terms. It is the basis for the annual budgetary exercise and sets the maximum annual amounts that the EU can spend in different fields.

It determines the maximum amount of money that can be committed to each different expenditure category within a given timeframe, known as "commitments" to reimburse when a project is completed. It also sets out the maximum amount to be actually paid out, the "payments". Today's commitments are tomorrow's payments.

The MFF therefore provides a political as well as budgetary framework for the benefit of 500 million Europeans.

For the 2014-2020 timeframe, payments are fixed at €908.4 billion and commitments at €960 billion.

Further delay of MFF would be irresponsible

While it is true that many would liked to have seen more money going to the MFF, the political conditions defined by the Parliament in negotiations with the Council have now been met and the payments shortfall for 2013 - an estimated €11.2 billion – has been fully made up, a key demand of the European Parliament.

It would be irresponsible political behaviour to further delay the MFF at this point as EU grant programmes need to be able to start as of 1 January 2014. This is of great importance in many European regions where the lack of an agreement would be strongly felt on the ground.

More flexibility to move money between budget years and expenditure categories

The key improvements made under the impetus of the EPP Group include greater flexibility, to allow for the transfer of EU money to where and when it is most needed.

The 2014-2020 MFF is a real forward-looking ‘investment budget’ with enough flexibility to move money from one budget year to the next to ensure outstanding payments are covered and from one category to the other as regards commitments.

Importantly, specific flexibility was given to tackle youth unemployment and strengthen research by frontloading 2 billion euro in 2014 and 2015 for policy objectives relating to youth employment, Horizon 2020, Erasmus and SME programmes.

Mid-term review to reassess EU’s budgetary priorities

A mid-term review of the MFF (at the latest in 2016) will enable the next Parliament to reassess the budgetary priorities of the EU, should the economy pick up in the meantime.

One billion extra for aid to the most deprived

The MFF doesn’t lose sight of those most hit by the economic crisis. The Fund for European Aid to the Most Deprived increased by €1 billion to €3.5 billion for the national food distribution schemes.

Reform of the current own resources system to guarantee the EU’s long-term financing

The European Parliament also looks beyond 2020. With a view to financing the EU in the longer term, it was a key demand of Parliament to reform the current system of own resources. A high level group will be created to this end.

This should solve the paradoxical situation whereby Member States want to reduce their contributions to the EU budgets while at the same time heavily relying upon the EU budget for many programmes that have a strong local and regional impact.

A system of direct own resources will allow the EU to steer a truly European course.