157th CoR Plenary Session (10-11 Oct 2023)

The current EU long-term budget (MFF) and the instrument NextGenerationEU support the recovery plan for Europe. On this website there are information on the new EU budget structure, funding programmes, allocations per Member State, and data on spending and revenue.

New financing needs, not foreseen when the EU's long-term budget for 2021 to 2027 was finalised, have arisen in recent months, reflecting multiple crises. From the very outset, in 2021, implementation of the EU's 2021-2027 budget faced challenging circumstances, with the pandemic and its consequences. In response, the EU and its Member States mobilised €3.7 trillion overall, with the EU budget providing direct support of €70 billion to help EU citizens and enterprises, and countries outside the EU, cope with the COVID-19 crisis. Financial pressure amplified in 2022 with Russia's war of aggression against Ukraine. The EU and its Member States have so far provided €72 billion in financial, military and humanitarian aid for Ukraine. The war has, in addition, led to inflationary pressure, diminishing the real-terms value of financial resources. The EU's budgetary resources for the current financial period from 2021 to 2027 were originally set at €1.8 trillion from the multiannual financial framework (MFF) and from the EU's temporary recovery instrument, Next Generation EU (NGEU). These resources have been consumed much faster than anticipated. The funds set aside for responding to unforeseeable events, the special instruments, earmarked €10.5 billion for the years 2021 to 2024 and are almost entirely depleted. This briefing presents the state of the EU's finances as initially set for 2021 to 2027, as updated in June 2023, and provides an overview of how the EU's financial means have been impacted by two major unexpected crises.

The tentative agenda for the forthcoming European Commission meeting of 20 June 2023 includes a proposal on a second basket of new own resources, with the title 'An adjusted package for the next generation of own resources'. The proposal would be adopted together with the revision of the 2021-2027 multiannual financial framework (MFF). In the roadmap for new own resources annexed to the interinstitutional agreement (IIA) of 16 December 2020, the decision on the second basket was initially envisaged for 2024. The European Parliament approved the first basket back in November 2022. In a resolution of 10 May 2023, it called for the swift adoption of the second basket. The Council has yet to start debating the first basket of new own resources.

As part of the mid-term revision of the Multiannual-Financial Framework (MFF), the European Commission asked Member States to increase their budget contributions by about 65,8 billion euros. This is an unprecedented request for additional money to the Member States. By way of comparison, a previous revision in 2016 only required an internal reshuffling of EU resources (for about 6 billion euros), without touching the overall ceiling. Once approved, about half of the new resources will be used to support the reconstruction of Ukraine and to top up both internal and external migration priorities, while the remaining amounts will be used to cover increased costs of the Next Generation EU and to boost EU competitiveness [...]

This edited volume on the EU Multiannual Financial Framework 2021- 2027 is the outcome of an initiative by the Robert Schuman Centre for Advanced Studies at the European University Institute of Florence. In mid-October 2019, academics, think tankers, practitioners and experts in European finance and politics discussed how to improve the Multiannual Financial Framework for the next decade. The discussion was both conceptual and policy-relevant. It was therefore not limited to the MFF but also reflected on the objectives and needs of major EU policies. This discussion was timed to coincide with the renewal of the 2021-2027 MFF, which was being negotiated by the EU institutions. Subsequently, events changed the timeline. The arrival of the Von der Leyen Commission added a new dimension to the initial proposal by adding the Green Deal, and later, following the pandemic crisis, another new layer: Next Generation EU, which created the exceptional opportunity for the Commission to borrow capital on the financial market and offer it to the Member States partly in grants and partly in loans.