Parliament wins key battle for next long-term budget

Its negotiating team managed to obtain €16bn more for key programmes on top of the €1.8tn package

Photo: EP Van Overtveldt.

After 10 weeks of hard grinding negotiations, Parliament’s budget negotiators and the Council came out of the impasse and on Tuesday reached a preliminary political agreement on the EU’s long-term budget for 2021-2027.

During the last round of the talks on the next multiannual financial framework and reform of own resources, the Parliament's negotiating team managed to obtain €16bn more for key programmes on top of the €1.8tn package agreed upon by the heads of state and prime ministers in July.

The extra money will come mostly from competition fines which companies have to pay when they do not comply with EU rules, corresponding to Parliament’s long-standing request that funds generated by the EU should stay in the EU budget.

With the additional finances, EP practically triples the envelope of the health programme and also secured equivalent to an additional year of financing for Erasmus+ to support the young generation.

The EP's negotiating team envisaged more resources guaranteeing that the research funding keeps increasing in areas like the digital, climate and health. Out of the €16bn, €15bn will reinforce flagship programmes to protect citizens from the Covid-19 pandemic, provide opportunities to the next generation, and preserve European values and €1bn will increase flexibility to address future needs and crises.

Parliament’s main task was to secure an increase for flagship programmes that were at risk of being underfinanced especially the Green Deal and the Digital Agenda.

Johan Van Overtveldt (ECR, BE), Chair of the Committee on Budgets stated after the round that the shift towards more research and innovation, with a focus on entrepreneurship, which began with the redesigned 2020 European budget, will now also be continued in the MFF. This shift is imperative for our growth, job creation and competitiveness, he underlined.

He specified that the conclusion of these negotiations means the European Recovery Plan can finally be activated. This fund is very important to get through the crisis, but it stands or falls with its use. The resources need to get to where they are actually needed. Here too the European Union must prove its credibility.

On the front of the new own resources, the both sides agreed to the principle that the medium- to long-term costs of repaying the debt from the recovery fund should neither come at the expense of well-established investment programmes in the MFF, nor result in much higher GNI-based contributions from Member States.

The EP side made up a roadmap to introduce new own resources during the next seven years. This plan is incorporated into a legally binding text, namely the ‘Interinstitutional Agreement’. Along with the plastics-based contribution as of 2021, the roadmap lists an Emissions Trading System-based own resources from 2023, possibly linked with a carbon border adjustment mechanism, a digital levy, from 2023, and an FTT-based own resource as well as a financial contribution linked to the corporate sector or a new common corporate tax base from 2026.



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