The next Multiannual Financial Framework: Much ado about nothing?
The current long-term budget of the EU, the Multiannual Financial Framework (MFF), runs out at the end of 2027. Given the difficult negotiations involved and the ability of all member states to wield a veto, it is high time to negotiate the fundamental principles and priorities. There are great hopes that this time will be different; that the mega-challenges and transformational pressures that the EU is facing will result in the recognition that a better and bigger budget is needed, focused on priorities such as security and defence.
Alas, these hopes are likely to be dashed on the rocks of MFF realities. While all member states profess that they want to see improvements, they have very different views on what that entails. Inevitably, much of the discussion will also this time around revolve around ‘juste retour’, the balance between what each country pays in and what it receives. Given the strained fiscal situation in all member states, there is a slim chance that there will be any noticeable increase in the future EU budget.
Rather than focusing on what we do with about 1% of the EU’s GDP—the likely continued limit for EU spending—we should instead focus on how else we can finance EU-wide priorities, including through common borrowing. Given the limitations of the MFF, particularly its vulnerability to national vetoes, this is best done outside the usual framework. If the end result is a static or potentially smaller MFF, but increased funding for issues such as security and defence by coalitions of the willing, the MFF negotiations should be seen as a success.
Fabian Zuleeg is Chief Executive and Chief Economist at the European Policy Centre.
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