Sustainable Prosperity for Europe

The EU Budget

Deciding on the long-term financial resources is essential in order to make the policy objectives of the European Union a reality. The EU budget and the Multiannual Financial Framework (MFF), which facilitates financial programming and budgetary discipline, reflect the political priorities of the community as a whole. Thus, it is no surprise, they are subject to intense debate among Member States. The structures of the EU budget and MFF, as well as the factors influencing them, therefore require close attention.

Given the huge challenges facing the Union today, not only the EU budget, but also the current MFF need revising. The review of the MFF 2014-2020, announced on 14 September 2016, came at a time when the EU is dealing with an unprecedented migration crisis, Euroscepticism is on the rise and the prospect of Brexit is looming with considerable implications for the “own resources” system.

This exercise and accompanying discussions are likely to have a major impact on the shape of the reform agenda, as a formal proposal on the post-2020 MFF is expected from the European Commission in 2017. With Member States still focused on the net balance approach, comprehensive modernisation of the own resources system is necessary to end this trend. However, the process is likely to take several years of difficult and detailed, politically sensitive negotiations. This is why it is important to start the discussion on reforms that are attainable in the shorter run and thus could be proposed in the current framework.

The EPC aims to address these needs by analysing the different options for reform with a view to proposing relevant, feasible recommendations. Particular focus is being put on the impact of Brexit on the structure of the EU budget – revenue and expenditure – as well as the overall political context. The EPC also follows the emerging development of the EU post-2020 funding strategy, in the framework of the project commissioned by Fondazione Cariplo, Italy.

The EPC has been following multiple issues related to the future budgetary resources of the Union already for years. For example, between 2011 and 2012, EPC carried out a project commissioned by the Committee of the Regions on the topic, focusing in particular on the relationship between EU expenditure and the principles of territorial cohesion and multilevel governance. The publications and events considered the importance of territorial entities in effectively implementing EU resources and put forward recommendations for the MFF.

Fabian Zuleeg, Chief Executive supervises the EPC’s activities on EU budget, and is supported by Annika Hedberg, Senior Policy Analyst and Robin Huguenot-Noël, Policy Analyst.

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The EU Budget