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Negotiations had led to an outcome on 19 June that Parliament deemed insufficient, but they resumed last week in the run-up to the European Council. EP President Martin Schulz, lead EP negotiator Alain Lamassoure (EPP, FR), Prime Minister Enda Kenny, Foreign Minister Eamon Gilmore and European Commission President Jose Manuel Barroso struck an agreement that won the backing of the main political groups in Parliament and the Member States.
Making the best use of every euro
Parliament secured the key priorities set out in its negotiating mandate. These include close to full flexibility to move unpaid funds (payment appropriations) between years and large flexibility for commitments, both between years and categories of expenditure, to make it easier to finance youth employment and research policies, the Erasmus for all programme and support for small and medium-sized firms. This flexibility is needed to ensure that every EU budget euro is used where it is most needed, especially now that annual budgets will decrease.
Revision starting in 2016
A key achievement for Parliament was to insert a "revision clause" in order to give the next Parliament and Commission a say on a budget that they would otherwise be stuck with until the end of their terms.
The Commission will present a review of the functioning of the MFF, taking full account of the economic situation at the time. Particular emphasis will be given to aligning the future duration of the MFF - currently seven years - with the five-year political cycles of the EU institutions. The review will be accompanied by a legislative proposal for revision.
Closing 2013 payments gap
The Council stated that it would deliver on its promise to settle the outstanding payments for 2013, estimated at €11.2 billion. Member States' economy and finance ministers will take a formal decision on the first tranche of €7.3 billion by 9 July at the latest and will decide in early autumn on a second tranche. This was an important issue for Parliament as it wants to ensure that the 2014 budget - the first under the new MFF - is not eroded by old unpaid bills. Parliament will not give its consent to the MFF Regulation or adopt the Budget 2014 until this new amending budget, covering the remaining deficit as identified by the Commission, has been adopted by the Council.
A billion extra for "aid for the most deprived"
In the final talks it was agreed that the Fund for European Aid to the Most Deprived would be increased from €2.5 billion to €3.5 billion. The additional €1 billion can be used by Member States on a voluntary basis for the food distribution scheme.
High-level Group on own resources
A high-level group of members of the three institutions will review the current EU "own resources" system, guided by the overall objectives of simplicity, transparency, equity and democratic accountability. National parliaments will be invited to an inter-institutional conference in 2016 to assess the outcome of this work on the basis of which the Commission will assess whether new own resources for the next MFF are appropriate.
What's next?
The outcome of the negotiations will be enshrined in a regulation and an accompanying inter-institutional agreement to which Parliament will have to give its consent by a majority of half of its constituent members plus one. Parliament is ready to put the MFF Regulation and the new Inter-institutional Agreement to the vote in the early autumn, as soon as the necessary technical and legal conditions for the finalisation of the relevant texts are fulfilled, so that the latter reflect the overall agreement reached between the Council and Parliament.
Commenting, EP President Schulz said: "The political agreement on the Multiannual Financial Framework is the best possible result in the given circumstances. The deal with the Council is far from perfect but the vote today indicates the wide support in the European Parliament and underlines that the European Parliament has obtained significant improvements. After all, it is better to have 50 per cent of something than 100 per cent of nothing.
The European Parliament has ensured much greater flexibility in the use of the EU budget. This increased flexibility enables better financing of youth employment and research policies, the Erasmus for all programme and support for small and medium-sized firms.
I recommend the political agreement on the MFF to the European Parliament not because it is ideal, far from it, but because the European Parliament has secured important improvements to the deal that was on the table from EU Heads of State and government."
Statement by Financial Programming and Budget Commissioner Janusz Lewandowski
"Today is a good day for Europe and I take great pride and happiness in it. Through its overwhelming vote in favour of the European budget for 2014-2020, the European Parliament has opened the way for putting in place a seven year growth and jobs fund worth almost €1,000 billion for the next seven years.
"We have spared no effort over the last two years to reach this point by helping the European Parliament and the Council find common ground on what is traditionally the most complex, the most sensitive and the toughest negotiations in the European Union.
"Over the last two years, the European Commission has worked hard on behalf of tens of millions of beneficiaries of EU funds for the 2014-2020 period. Now we can be confident that they will receive the crucial financial support they need from 1 January 2014."