EU Executive paves the way for the next multiannual budget calling for more flexibility

The European Commission kicked off the preparatory work on the next Multiannual financial framework by launching seven public consultations on the future EU budget and the policies it should support.

The invitation will last twelve weeks and focus on relevant aspects that have emerged recently as essential to make the EU budget more efficient. They are about implementing EU funds with Member States and regions, the funding the EU should set for competitiveness; the funding for external action, the funding for cross-border education, training, youth, and creative sector; the funding for civil protection, preparedness and response to crises, the funding for the single market and cooperation between national authorities, and the performance of the EU budget.

The European Commission will also gather 150 Europeans to join a panel and make concrete recommendations for the next EU budget. The event will be accompanied by an online platform offering everyone the opportunity to participate in the debate. The European Commissioner for Budget, Piotr Serafin, is also engaging in a “Tour d’Europe” to consult Member State authorities, regional stakeholders, and beneficiaries of the EU budget.

In a non-binding communication adopted on Tuesday, the 11th of February, the European Commission stated that the rise of new needs and emergencies and the increased calls for action at the EU level stretched the EU budget to its limits, requiring a mid-term revision in 2024.

The EU executive mentioned the strong and predictable support for Ukraine, the reinforcement of migration and border management programs, the support for EU neighboring partners, and the enlargement of countries as “geopolitical necessities.” Volatile interest rates and rising financing costs “required ad hoc solutions and increased flexibilities.” “Increasing expectations for EU action reflect the need to rethink the EU budget,” the text reads.

All those necessities require “a reformed and reinforced EU budget” and the repayment of NextGenerationEU borrowing starting in 2028 – which will need 25-30 billion per year over the next multiannual financial framework, the 20% of the current annual budget.

“Europe needs to square the circle: there cannot be an EU budget fit for our ambitions and notably ensuring the reimbursement of NextGenerationEU, and, at the same time, stable national financial contributions without introducing new own resources,” the EU Commission stated.

The document then lists the lines of action needed to maximize results with public spending, defining the characteristics with which the European budget should be designed and allocated. The EU Executive calls for a budget defined in a “policy-oriented” manner. “The future EU budget should focus on common challenges where spending at the European level brings the highest added value,” the text reads.

The proposal for the next budget will aim to simplify funding, facilitate access to funding, and reduce the number of spending programs and administrative complexity for the applicant. “This is not possible if EU funds are nearly all pre-programmed from the start more than 90% of the 2021-2027 multiannual financial framework and NextGenerationEU are pre-allocated for specific purposes, programs, or national envelopes”, the EU Commission further states.

Improving the conditions for unlocking private investment, with greater attention to the different levels of risk in the various sectors, especially with a view to ecological, digital, and social transition, is key to creating an EU budget with a greater impact.

The EU Commission is also recommending that the two co-legislator institutions back a more flexible EU budget that balances long-term investment and capacity to respond to crises, with increased flexibility in terms of both percentage and utilization. “Expenditures are bound within annual overall limits as well as limits per main area of activity (headings and sub-headings) which are set at the beginning of the period and constrain the transfer of resources,” the Commission highlights.

The text also specifies that the next multiannual funding should be aligned with EU priorities and ensures that the budget is used to finance projects and contexts in line with EU values and objectives. The Commission will present its formal proposal for the next Multiannual Financial Framework in July 2025.