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Parliament wants higher EU Budget from 2021

The discussion on the Multiannual Financial Framework is one of the topics, which currently concerns Brussels the most. In May 2018 the Commission had presented its budgetary proposal for period 2021 to 2027, which is supposed to have an overall volume of Euro 1,279 billion. This equals 1.11 % of the Gross National Income. However, Parliament regards this percentage as too low: they insist on their demand of a budget of 1.3 %. Even if budget issues are first and foremost within the competence of the Council, Parliament nevertheless has a potential influence, which it intends to use. This is what one may conclude from the debate by Parliament’s Committee on Budgets.

On 8 October 2018, the European Parliament's Committee on Budgets debated the Draft Interim Report on the Multiannual Financial Framework (MFF) for 2021-2027. No fewer than four co-rapporteurs from three groups (EPP, S&D, ALDE) are working on this paper to ensure a broad consensus across group boundaries right from the start. These four rapporteurs had already prepared two initiative reports on the MFF prior to the publication of the Commission proposal, in which they demanded a budget equivalent to 1.3 % of the gross national income.

Whilst therefore the Commission proposal of 1.11 % comes close to the demand of many Member States, not to provide for any increase of the current budget of 1.13 % (taking Great Britain’s EU exit into account), the majority of the EU Parliament is in favour of a financially stronger EU. And they reinforce their position in the Interim Report, in which they demand the general level of 1.3 % and add detailed figures: the rapporteurs are preparing a concrete list of programmes within the MFF, which in their opinion should be increased by what extent, to ensure on the one hand that the EU will be able to continue to fulfil its responsibilities in future and that it can meet any new challenges on the other. For example, they demand to triple the Erasmus education programme and to double the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME).

Whilst with regard to the expenditure side, the EU Parliament has to agree to the MFF, it is able to provide a non-binding statement concerning the revenue side. Nevertheless, it also wants to have an influence on this half of the MFF: the Interim Report also provides for Parliament to regard the revenue and expenditure side as a package, thereby evaluating both in a package. In doing so, they want to apply pressure to make the approval of the expenditure side independent on whether Parliament’s points of views are also taken into account on the revenue side. In contrast to many Member States, Parliament welcomes the proposal by the Commission, to develop the EU’s capital resources, for example in form of direct funds from the emission trading system or a tax on single use plastic.

From the Chamber of Labour’s point of view, the main emphasis should be on a balanced MFF, which results in a more social Europe. Hence, employees and consumers are making up the group, which, based on their tax payments, significantly contribute to funding the MFF; therefore, they should adequately benefit from it. Thus, a strong European Social Fund is therefore of key importance and must as a result amount to 10 % of the EU budget. Due to the considerable decrease of agricultural enterprises, cuts of budget funds in agricultural direct payments and shifting these funds to rural areas are appropriate.

Further information:

AK Position Paper: EU Multiannual Financial Framework 2021 – 2027: A budget that unites Europe

AK EUROPE: EU needs a Multiannual Financial Framework that unites Europe

A&W Blog: The new EU Budget: a budget for the future?

European Parliament: Draft Interim Report on the Multiannual Financial Framework 2021-2027

European Commission: EU Budget -Commission proposes a modern budget for a Union that protects, empowers and defends

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