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Multiannual Financial Framework vote

20 November 2013
Europolitics
 

Concluding nine months of fierce debates, the European Parliament endorsed, on 19 November, the EU's long-term budget (2014-2020), the so-called multiannual financial framework (MFF). The vote was an overwhelming 537 in favour, 126 against and 19 abstentions. The Council is expected to adopt the MFF as an A point' during its next meeting.

Parliament finally gave its green light after postponing the vote twice. The legislators considered that the conditions they set have finally been met. However, a closer look reveals that the compromise has not quite lived up to MEPs' expectations, as several Parliament sources recognised off the record. A source from a major political group acknowledged that “all the noise” was needed to reach the small concessions the legislators got from the Council. Other sources lamented that, since it was not co-decision, the only option was to endorse or reject the whole package, and the “nuclear weapon” of rejecting the MFF would have caused a “budget crisis”. Another observer noted the importance of the member states' decision to top up the 2013 budget with an additional €11.2 billion to avoid rolling over pending bills to the next financial perspective.

“We have been as combative as possible,” the leader of the EPP group, Joseph Daul (France) said at a press conference.

Against the backdrop of budget cuts across Europe, the institutions settled for the first time in the Union's history on a budget smaller that the previous financial perspective: €960 billion in commitments and €908 billion in payments. The Union's long-term budget was slashed by €40 billion compared to the previous MFF, affecting mainly the two largest spending chapters: the Common Agricultural Policy (CAP) and Cohesion Funds. “We will have to finance more Europe with less money,” commented Budget Commissioner Janusz Lewandowski.

Parliament was ready to swallow this bitter pill only if the capitals accepted a compulsory and comprehensive revision of the MFF in 2016; a maximum overall flexibility to ensure the best use of funds; and an agreement on own resources to reduce the share of GNI-based contributions to the EU budget by the member states, apart from ensuring the unity of the EU budget to increase its transparency. However, the outcome was not to the satisfaction on many in Parliament. “This is what could be achieved,” commented tersely one of the rapporteurs, Ivailo Kalfin (S&D, Bulgaria).

FLEXIBILITY

The final agreement limits the payments that could be transferred between headings and financial years. Compared to the original payment ceilings of the relevant years, the annual adjustments will not exceed (in 2011 prices) €7 billion in 2018, €9 billion in 2019 and €10 billion in 2020.

In commitments, the margins left available below the MFF ceilings between 2014-2017 will create the Global MFF margin for commitments', available above the ceilings for the years 2016 to 2020. This moneybox will aim to finance policy objectives related to growth and employment, in particular youth employment.

Parliament regretted this limitation in its July resolution, and said that the flexibility clause should also be revised during the post-electoral revision of the MFF.

OWN RESOURCES

The last outstanding issue was own resources. MEPs asked for a reform to reduce the share of GNI-based contributions by member states to the EU budget to a maximum of 40%. On 14 November, the Lithuanian Presidency sent a letter to MEPs in order to clarify the role of the high-level working group on own resources and fulfill the terms of the compromise. However, the Liberal group considered this commitment too weak, and demanded a stronger wording. Last-minute changes were made minutes before the vote, enabling most ALDE members to join the Socialists and the EPP in endorsing the MFF. The Mouvement Democrate, a group within ALDE, as well as the Greens and the GUE-NGL group voted against.

The Presidency's letter, seen by Europolitics, states that the group may be composed of nine high-level persons in addition to its chair. Each institution will appoint three members. The chair will be a neutral “wise man,” ideally a former prime minister. The first meeting will take place on 18 or 19 December.

REVISION CLAUSE

Both sides agreed to a revision of the next MFF by the end of 2016 “to adapt the MFF to new challenges and needs and to take full account of the latest macroeconomic projections,” said the agreement. MEPs have high hopes about this review, but some observers close to the negotiations commented that it would be “hard” to consider it a meaningful revision, since the EU is expected to continue growing at a very slow pace and the Eurosceptics are expected to increase their presence after the May 2014 European elections. “It doesn't make a lot of sense to wonder what would happen in 2016,” commented the Chair of the Committee on Budgets (BUDG), Alain Lamassoure (EPP, France) when asked about his expectations for that review. “Our responsibility was to make this review possible,” he added.

 

Accord final du parlement européen sur le budget 2014-2020
 

STRASBOURG, 19 novembre (Reuters) – Le Parlement européen a donné son accord définitif mardi au nouveau cadre budgétaire qui fixe les plafonds des dépenses de l'Union européenne pour les sept années à venir.

Le vote a été acquis par 537 voix contre 126 et 19 abstentions.

Les eurodéputés avaient déjà approuvé, le 3 juillet dernier, le compromis trouvé avec les Etats sur le « Cadre financier pluriannuel » (CFP), tout en conditionnant leur vote final au règlement des 11,2 milliards d'euros manquant pour boucler le budget 2013.

Ayant obtenu gain de cause sur ce dernier point, le président de la commission des Budgets, le Français Alain Lamassoure (UMP), a invité ses collègues à accepter l'accord tout en lançant un avertissement.

« Je recommande aussi à tous, et d'abord au Conseil, de réaliser que ce cadre budgétaire ne règle rien. Ce n'était pas le meilleur possible, ni le moins mauvais possible. C'était le seul possible. Il ne tiendra pas sept ans. Ni même trois », a-t-il ajouté.

A l'exception des eurosceptiques, les eurodéputés de tous les bords politiques avaient d'abord menacé de leur veto cette programmation budgétaire, en baisse pour la première fois dans l'histoire de l'Union européenne.

Ils avaient finalement renoncé à se battre sur les chiffres – 960 milliards d'euros en crédits d'engagement (les autorisations de programmes) et 908,4 milliards en crédits de paiement (ce qui est effectivement déboursé) soit environ 1% du PIB de l'UE – contre une garantie de plus grande flexibilité dans la mise en ÷uvre des budgets annuels.

Les crédits non dépensés dans une rubrique pourront, dans certaines limites, être reportés dans une autre. Il en ira de même pour les reliquats annuels qui pourront être transférés d'un exercice à l'autre.

Le Parlement avait également exigé une « révision à mi-parcours » du CFP pour tenir compte d'un éventuel retour de la croissance en Europe, et le développement des ressources propres, indépendantes du budget des Etats, pour financer celui de l'Union européenne.

Sur le premier point, la Commission européenne procédera à un réexamen du CFP avant fin 2016. Quant au second, un groupe de travail « de haut niveau » fera une proposition susceptible d'être examinée par une conférence interinstitutionnelle la même année.

Estimant que le compte n'y était pas, le groupe des Verts et celui de la Gauche unitaire européenne (communistes) ont voté contre le compromis. (Gilbert Reilhac, édité par Sophie Louet)

 

BUDGET: EP finally approves EU's 2014-20 multiannual framework
 

Brussels, 19/11/2013 (Agence Europe) – The European Parliament finally approved (by 537 votes to 126, with 19 abstentions) the regulation on the multiannual financial framework (MFF) for the 2014-2020 period, comprising €960 billion in commitment appropriations and €908 billion in payment appropriations (see EUROPE 10876). The Council is due to formally approve the MFF on 2 December.

Many MEPs regretted the lack of ambition contained in this compromise on some points, particularly with regard to the total budget provided. The 2014-2020 MFF will have €40 billion less than the current MFF (2007-2013). The Greens/EFA voted against the text, as did the GUE/NGL.

In July, the European Parliament agreed to the compromise reached on the 2014-2020 MFF but introduced three conditions for its final approval. These conditions have now been met. Additional payments (€3.9 billion, after a previous envelope of €7.3 billion) needed for implementing a balanced 2013 budget have been secured, the regulations defining the contents of Community policies funded by the budget no longer provoke any major differences and the launch of the EU budget resources reform procedure will be ensured over the next few days.

Jean-Luc Dehaene (ALDE, Belgium), the rapporteur, stated that the EP had obtained important guarantees: a revision clause that avoids the next Parliament's hands being tied, additional flexibility, comprehensive application of co-decision, continuation of the debate on the EU's own resources (setting up a high-level workgroup that is expected to “find solutions”). The rapporteur said that the EP had got what it wanted. The EP is, however, disappointed: the European budget was supposed to be an investment budget that develops to counterbalance the cuts made but, unfortunately, this goal had not been achieved because the MFF has been reduced compared to the current MFF (2007-2013), explained Dehaene. He regretted that cohesion policy and agriculture continue to dominate this budget and pointed out that “we missed the boat when it came to achieving a rebalance in certain areas”. Dehaene thought that the opportunities provided by the Lisbon Treaty had not been used to the full, “due to the attitude displayed by the European Council”. An own initiative report will be drafted in an effort to learn the lessons from the way in which these negotiations were conducted. Dehaene regretted that the EP had been weakened and highlighted the fact that the Council had acted in national interests, “to the disadvantage of the European interest”. He recommended that in the long run they get rid of the required unanimity vote on MFF and stressed that “we need our own European resources”.

The Lithuanian Presidency intends to organise, on the 18th and 19th of December at the latest, an initial meeting of the high-level group on own resources, said Lithuanian Deputy Minister for Foreign Affairs Vytautas Leskevicius, speaking on behalf of the Council.

Janusz Lewandowski, Commissioner for the Budget said: “I really acknowledge the intelligent, pragmatic and finally successful approach of Parliament in the way it worked to improve the architecture of the financial framework for seven year periods” for the MFF. He also regretted that “we have €40 billion less for the future than we have now. This has never happened before in the history of the European Union”. Fortunately, according to the commissioner, the EP has managed to obtain instruments that will increase the flexibility of the budget if necessary (visibility instrument and margins). The commissioner also believes that there are clear innovations in the budget (Youth Initiative, Connecting Europe Facility, Erasmus, research etc.) and there is therefore a “decent modernisation of the budget”.

Alain Lamassoure (EPP, France), the chairman of the EP's budgets committee, said that this budgetary framework “does not settle anything. It was neither the best possible outcome nor the worst but the only one possible. It will not hold together for seven years, not even three”. According to Lamassoure, this framework will not help to ensure basic solidarity among EU countries. It will be even more difficult to fund the new competencies provided to the EU by the Lisbon Treaty. This framework “does not leave any room for manoeuvre for unexpected developments”. This is why the European Parliament believes it is very important to reform the way in which the budget is funded and why a high-level group on the reform of the EU's own resources should be set up. MLamassoure concluded: “Without any budgetary independence, the EU is condemned to slowly suffocate to death”.

Göran Färm (S&D, Sweden) pointed out that the EP had rejected the European Council's agreement last February. He asserted that “we were unable to change the budgetary ceilings but we were able to introduce a number of improvements, particularly on flexibility to use money that has not been spent”. There is also more funding for tackling youth unemployment and research. In a press release, the leader of the S&D Group, Hannes Swoboda, stated that “it is the best compromise we could get in these times of fiscal tightening across Europe”. The European Parliament, which will be elected next year, will have the chance in 2016 to reopen the discussions to adapt to the post-crisis needs of Europe. The S&D Group points out that it is “very unhappy” on the subject of macro-conditionality.

Jan Mulder (ALDE, Netherlands) called for a five-year MFF and was pessimistic about the possibility of the next EP's “shifting the focus on certain points” during the mid-term review, “given that unanimity will still be required”. He also regretted the very slim margins that remain and the absence of funding in the event of health crises affecting livestock.

You are all ridiculous!

Speaking on behalf of the Greens/EFA Group, Daniel Cohn-Bendit exclaimed that “you are all against this multiannual budget but you are all going to vote for it. You are all ridiculous!” He added that, “with the Lisbon Treaty, we had the chance of putting a stop to the nationalisation of the European budget. You didn't take this chance. You are masochists. I don't know what sadistic power the Commission and Council have but sadomasochism is indeed the current prevailing culture at the European Parliament”. The leader of the Greens said that President Schulz had not negotiated very well and had “led us into a brick wall”. Cohn-Bendit concluded that “we are indeed practising austerity and driving citizens into a brick wall”.

Martin Callanan (ECR, United Kingdom) stated that an agreement had been reached that was a lot like the one negotiated by EU leaders last February. He said that this was a step in the right direction because it demonstrated that costs could be cut in the EU and that taxpayers' money could be used better. Before appealing for a better Europe, not more Europe, he warned that there would be no own resources.

Jürgen Klute (GUE/NGL, Germany) said that the result was unacceptable and that the impact of the cuts was not yet known. He was particularly critical of the spending cuts to structural funds. (LC/transl.fl)