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Payments shortfalls remedied
Firstly, Parliament wanted the recurring shortfalls in payments, which have made it almost impossible for the European Commission to fulfil its legal, financial obligations in recent years, to be remedied so as to avoid starting 2014 in the red. Member states agreed to add another €3.9 billion to 2013.
Legal bases for all EU programmes agreed
Secondly, Parliament also insisted all legal bases for the various EU programmes be finalised on the basis of co-decision between the Council and Parliament. This is now the case and as a result many programmes are being voted during this plenary session.
High-level group on own resources
Thirdly, Parliament insisted on the setting up of a high-level working group on “own resources” to work on reforming the EU’s income arrangements, as the current system, with all its exceptions, rebates, different sources of funding and dependence on national budgets, has become inexplicable. Member states agreed to the setting up of this group, which will start its work shortly.
Making best use of every euro
In the June 2013 agreement Parliament already secured the key priorities set out in its negotiating mandate. These included close to full flexibility to move unpaid funds (payment appropriations) between years and wide flexibility for commitments, both between years and between categories of expenditure. 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.
Mid-term revision
Another key achievement for Parliament was to insert a "revision clause", which will require the European Commission to present a review of the functioning of the EU’s long-run budget (Multi-annual Financial Framework -MFF) in 2016, 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 5-year political cycles of the EU institutions. The review will be accompanied by a legislative proposal for revision.
Next steps
The Council of Ministers is set to approve the MFF as an A point at the Competitiveness Council on 2 December.
Video: Budget battle ends as 2014-2020 deal is passed
Lithuanian Presidency
Vytautas Leškevičius, Vice-Minister of Foreign Affairs of the Republic of Lithuania, welcomed the successful completion of inter-institutional negotiations regarding the EU multiannual financial framework 2014–2020.
"It’s the culmination of a long negotiation process and good news to the citizens of Europe. Funding provided in the budget for innovation, research, education, cohesion or agriculture will definitely provide a major boost to our economies. The EU multiannual financial framework is the foundation which will help to consolidate funds for growth and job creation", the Vice-Minister said.
"The negotiations of unprecedented intensity and difficulty with the EP were one of the biggest challenges of the Lithuanian and previous Presidencies. Today we can rejoice – the result properly reflects our efforts and the expectations of EU citizens and businesses", Mr Leškevičius said.
EP President Schulz
“Today’s approval by the European Parliament of the Multiannual Financial Framework 2014-2020 is an extremely important vote. Thanks to the European Parliament’s approval today EU funds can flow, on time, starting from 1 January 2014.
It means much needed EU funds can be invested into programmes ranging from combatting youth unemployment, support for less-well off regions in the EU via the structural funds, to much needed funding in research and development and support for agriculture.
However, the amounts available from the MFF are far from perfect. The European Parliament would have preferred a much more ambitious MFF targeted more towards the key challenges facing the EU today. A more ambitious MFF would have seen higher amounts available in the EU budgets and would have boosted a job-rich recovery.
Nevertheless, the European Parliament has secured important improvements from the 8 February 2013 unsatisfactory proposal from Heads of State and government.
MEPs have secured greater flexibility in the MFF. Flexibility is needed to ensure that all EU budget euros can be used where they are most needed. For example, this new flexibility should allow the EU to increase funding of priorities such as bosting investment for job creation and allocating more money for the Youth Guarantee to combat youth unemployment in future years of the MFF period.
Our negotiators have also secured an important revision clause in the MFF which will give the next Parliament and Commission a say on how to change the MFF. Otherwise the new European Parliament and Commission would have been forced to stick with it until the end of their terms.
Finally, on the revenue side or “own resources”, the European Parliament has insisted that work is stepped up and a High Level Group will report back by the end of 2014 with new proposals which ultimately could lead to a reduction in Member State contributions to the EU Budget.”
See also: Only With Fresh Budget Ideas Can the EU Meet the Challenges It Faces, op-ed in The Huffington Post, 19.11.13
President Barroso
"This is a great day for Europe. The European Parliament has given its final blessing to the European budget from 2014 until 2020, thus bringing successfully an end to long negotiations. Now, the Council can seal the deal shortly. The European Union will invest almost 1 trillion euros in growth and jobs between 2014 and 2020. The EU's budget is modest in size compared to national wealth. But one single year's budget represents more money - in today's prices - than the whole Marshall plan in its time! Our modern, future-oriented budget can make a real difference to people's lives. It will help to strengthen and sustain the recovery underway across the European Union. There is funding so we can build our way out of the crisis, financial support for those below the poverty line or looking for a job, investment opportunities for small companies, and assistance for local communities, farmers, researchers and students. This is a deal which helps every family across Europe. Europe is part of the solution."
Press release with video