EP wants greater control over the European budget
On Wednesday, the European Parliament's Budgets Committee voted on its own-initiative report on the next Multiannual Financial Framework (MFF), which was adopted with 23 votes in favour, 9 against and 2 abstentions.
The MFF amounted to €1,270 billion for the 2021-2027 cycle, of which around 93% will be spent on local projects, including support for environment, cohesion and innovation activities.
The main point of the proposal is that
the MFF, which has been financed by 1% of gross national income (GNI), will no longer be enough to deal with the crises Europe is facing,
especially given the new geopolitical profile of the US, and that it is therefore essential to consider increasing it. While it is debatable to what extent the Council of national governments would be open to increasing contributions, the EP has sought to correct von der Leyen's objectives in a number of other ways.
While the European Commission looks to reform the budget along the lines of the Recovery and Resilience Facility (RRF), with less designation of development areas and more country-by-country assessment of the use of resources, the EP calls for transparency to be maintained and for cohesion policy to continue to focus on the integration and catching-up of regions.
The Commission is trying to redirect cohesion funds towards competitiveness and the development of the defence industry, among other things, but Parliament says this is the wrong way to go and should not be at the expense of social and environmental improvements. Instead, it should be more along the lines of the InvestEU and the Innovation Fund, pooling investment from the public and private sectors.
At the same time, the EP's Committee on Budgets (BUDG) also believes that a relaxation of bureaucratic constraints would be helpful, but they do not believe that this can be achieved by leaving the EC's assessment to its own discretion. This may be particularly justified given that the Commission has given virtually flawless ratings to all countries on how RRF funds have been spent so far.
They also want simpler accounts in the EP, but they would maintain their control over the accounts issued by the Commission. They also demand that
access to EU funds be more consistently linked to the rule of law.
In addition, however, they also call for a "smart conditionality mechanism" to ensure that funds reach EU citizens even if a government refuses to align its operations with European principles.
Another important factor is that
the repayment of NextGenerationEU loans will have to start from the beginning of the new budget cycle in 2028, which will mean extra spending for the EU for decades to come.
Although the EP believes that joint borrowing could be an adequate tool for crisis management, the EC would have to find new sources of revenue to cover the repayment of the loans, and thus should not be financed from funds set aside for development.
In addition, flexibility of response is also important, but this should not be achieved through rapid changes of direction, but by creating two specific instruments: one specifically for disaster response and another for the rapid response to other unexpected challenges.
Around 2000 amendments were made to the report before it was finalised to ensure that it was a budget that truly reflected the interests of the majority. After the Committee on Budgets, a vote will take place in Parliament's plenary session, probably between 5 and 8 May. For the moment, it looks as if they may get an answer from the EC by June, which may be too late, as Ursula von der Leyen's team plans to present the new MFF plans in July.
Cover photo (for illustration purposes only): EU
With funding from the European Union. The opinions and statements expressed herein are those of the author(s) and do not necessarily reflect the official position of the European Union or the European Commission. Neither the European Union nor the European Commission can be held responsible for them.
