Revision of EU long-term budget: why Parliament wants improvements | News | European Parliament

What is the EU long-term budget?

The EU long-term budget, also known as the Multiannual Financial Framework (MFF.), is the seven-year financial plan that determines how much money the EU can invest in different priorities, such as supporting farmers, regions, businesses, students or researchers.

The long-term budget sets limits for the EU’s annual spending. The current framework covers the period 2021-2027. As it spans so many years, it is subject to a mid-term review in 2023 to see if changes are needed.

Find out more about the EU long-term budget.

Why changes in the EU long-term budget are needed

Many unforeseen developments have taken place since the EU adopted its current long-term budget at the end of 2020.

The war in Ukraine has dramatically changed the geopolitical situation on the continent. The EU has committed to supporting Kyiv in its fight against the unprovoked aggression from the Kremlin.

The EU has sent financial and humanitarian aid and agreed to increase production of ammunition and missiles for Ukraine. Millions of Ukrainian refugees have sought protection in EU countries.

The rise of interest rates, initiated by central banks to stem inflation, has led to a substantial increase in the EU’s borrowing costs linked to the post-Covid recovery plan and is also weighing on the EU budget.

Other challenges facing the EU include the persistent migration inflows and the need to secure the EU’s autonomy in critical industries.

Mid-term revision of the EU long-term budget

The European Commission came up with a proposal for a revision of the long-term budget in June 2023. It includes:

• Setting up a new Ukraine Facility, with an overall capacity of €50 billion, that should cover the country’s immediate needs as well as support its recovery and long-term modernisation
• Reinforcing the EU budget with €15 billion in relation to migration, responding to external challenges, such as the war in Ukraine, and building partnerships with non-EU countries
• Establishing a Strategic Technologies for Europe Platform (Step) to promote the EU’s long-term competitiveness in critical technologies, such as health, raw materials and space. The Commission proposal envisages the use of funds under existing programmes and a €10 billion top-up for specific programmes
• Setting up a new instrument above the current budgetary caps to cover higher borrowing costs under the EU’s recovery plan.

Parliament’s position

MEPs set out their position on the changes required in the long-term budget in a reported adopted on 3 October 2023.

In a previous resolution in December 2022, MEPs had already said that the political, economic and social context in the EU had changed beyond recognition since the adoption of the long-term budget in 2020 highlighting the war in Ukraine and inflation.

Now Parliament states that the revision should address the consequences of Russia’s war of aggression against Ukraine, support Kyiv, strengthen the EU’s strategic autonomy and sovereignty and give the EU more flexibility to deal with crises.

MEPs welcome the Commission’s proposal but argue more funding is necessary in specific areas:

• €1 billion more to provide humanitarian aid to Ukraine and support other countries affected by the war, such as Moldova
• €1 billion more to support border management and migration-related policies
• €3 billion more for the Strategic Technologies for Europe Platform to strengthen the competitiveness and strategic autonomy of the EU
• €5 billion more for two instruments that should provide the EU with more flexibility in responding to unforeseen events.

MEPs want all repayment costs related to the borrowing under the recovery plan to be moved outside of the budget limits and not only those that are above the already programmed costs, as the Commission suggests.

Next steps

Parliament wants to see quick progress with the revision of the EU-long-term budget, because it would also have an impact on the 2024 annual budget.

The final decision rests with the Council, which has yet to agree on a common position. The revised budget can only enter into force if Parliament consents to it as well. The report, adopted in the plenary on 3 October, aims to present Parliament’s views on the subject and is its negotiating mandate.