Negotiations over the EU’s Multi-Annual Financial Framework: “European Added-Value” and Compliance with Rule of Law Principles: Restructuring the EU Budget

Negotiations over the EU’s next Multi-Annual Financial Framework (MFF) for the period of 2021 and 2027 have already begun. The political priorities, as well as the funds available, will shift compared to the last MFF. Britain’s exit from the EU as of 2021 is not the only challenge facing the EU. The EU’s growing responsibilities for controlling Europe’s external borders, ensuring internal security and financing migration-related tasks all need to be considered. The principle of “European added value” should also be taken into account for tasks financed using EU funding. In view of these challenges, how should the EU budget be adapted? Does it make sense to restructure EU budgetary policy by coupling EU funds with conditions such as compliance with principles of the rule of law or fighting corruption? Friedrich Heinemann, ZEW Mannheim and University of Heidelberg, complains that shifting the budget structure in the direction of higher European added value can primarily only be achieved by providing more money, but not by making notable cuts in problematic policy fields. Overall, argues Heinemann, the “decision on MFF 2021–2027 is rapidly on its way to becoming another missed opportunity in integration history”. Berthold Busch and Jürgen Matthes, IW Cologne, see revisions of the main areas of spending to date featured in the EU Commission’s MFF proposals for 2021 to 2027 as a step in the right direction. However, they believe that this step towards financing genuine public goods at a European level could have been more marked. Stefan Lehner, European Commission, presents the proposals by the European Commission for the MFF for 2021–2027. In his opinion, these proposals constitute a crucial breakthrough in the structure of the EU budget. Towards the end of the period EU wide administered programmes exclusively oriented towards EU added value would be greater than the funds for the Common Agricultural Policy (CAP) or for cohesion for the first time. Markus Ferber, European Parliament, is more sceptical. In his view, the European Commission’s proposals for the MFF lay the foundation for discussions at best. The first basic decision to be taken is which tasks the EU should perform in the future, and which can be independently implemented at a national level by member states. Decisions on spending and programmes can only be taken in a second step. However, if the second step is taken before the first, the new MFF will primarily generate expenses and no European added value. According to Peter Becker, Stiftung Wissenschaft und Politik, the MFF negotiations will also involve restructuring European cohesion policy more effectively – including strengthening conditionality– to create as much European added value as possible, generate additional growth and create new jobs. Pola Schneemelcher, Jacques Delors Institut, Berlin, sees the proposal as a “post-crisis budget that doesn’t hurt anybody.” According to her, neither the volume of the MFF nor the rebalancing of expenditure is radical, representing a missed opportunity to reform the revenue system. Michael Thöne, University of Cologne, stresses that the discussion over the MFF and other reform ideas are effectively based on a “multi-speed Europe.”