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08 February 2013

European Council Conclusions: Multiannual Financial Framework


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Looking to the future, the next MFF must ensure that the European Union's budget is geared to lifting Europe out of the crisis. (Includes link to statements from EP, Van Rompuy, Schulz et al.)


1. The European Union's budget must be a catalyst for growth and jobs across Europe, notably by leveraging productive and human capital investments. Within the future Multiannual Financial Framework, spending should be mobilised to support growth, employment, competitiveness and convergence, in line with the Europe 2020 Strategy. At the same time, as fiscal discipline is reinforced in Europe, it is essential that the future MFF reflects the consolidation efforts being made by Member States to bring deficit and debt onto a more sustainable path. The value of each euro spent must be carefully examined ensuring that the European Added Value and quality of spending under the future MFF are enhanced not least by pooling resources, acting as a catalyst and offering economies of scale, positive trans boundary and spill-over effects thus contributing to the achievement of agreed common policy targets more effectively or faster and reducing national expenditure.

Sustainable growth and employment will only resume if a consistent and broadbased approach is pursued, combining smart fiscal consolidation that preserves investment in future growth, sound macro-economic policies and an active employment strategy that preserves social cohesion. EU policies must be consistent with the principles of subsidiarity, proportionality and solidarity as well as provide real added value.

2. The future financial framework must not only ensure the appropriate level of expenditure, but also its quality. The quality of expenditure will allow for a better development of the policies, taking full advantage of the opportunities they provide in terms of European value added, in particular in times of heavy constraint on the national budgets. All funding instruments should, therefore, be spent as effectively as possible. Efforts towards improving the quality of spending of the Union's funds need to include, inter alia, the better governance of the policies including certain conditionalities, concentration and targeting of funding, wherever possible in all funding instruments and programmes under all Headings, on areas that contribute most to growth, jobs and competitiveness. Regular reporting for the appraisal of results on all policies and funding instruments at political level should be ensured. In addition, elements ensuring the appropriate quality of expenditure must include flexibility, positive incentives, concentration of funds on growth-enhancing measures, evaluation and review, emphasis on results, simplification in delivery, appropriate technical assistance, application of competition principle in selecting the projects, and an appropriate use of financial instruments. The conclusions include a number of elements that provide for the application of the above principles. Furthermore, every effort should be made by all institutions of the Union so that the sectoral legislation of relevant funding instruments includes provisions aiming at enhancing the quality of spending.

4. The new MFF will cover the seven years between 2014 and 2020 and be drawn up for a European Union comprising 28 Member States on the working assumption that Croatia will join the Union in 2013.

5. Expenditure will be grouped under six Headings designed to reflect the Union's political priorities and providing for the necessary flexibility in the interest of efficient allocation of resources.

The Multiannual Financial Framework for the period 2014 to 2020 will have the following structure:

  • Sub-Heading 1a “Competitiveness for growth and jobs” which will include the Connecting Europe Facility;
  • Sub-Heading 1b “Economic, social and territorial cohesion”;
  • Heading 2 “Sustainable growth: natural resources” which will include a sub-ceiling for market related expenditure and direct payments;
  • Heading 3 “Security and citizenship”;
  • Heading 4 “Global Europe”;
  • Heading 5 “Administration” which will include a sub-ceiling for administrative expenditure;
  • Heading 6 "Compensations".

6. The European Council has reached political agreement that the maximum total figure for expenditure for EU 28 for the period 2014-2020 is €959 988 million in appropriations for commitments, representing 1.00 per cent of EU GNI and €908 400 million in appropriations for payments representing 0.95 per cent of the EU GNI. The breakdown of appropriations for commitments is described below. The same figures are also set out in the table contained in Annex I which equally sets out the schedule of appropriations for payments. All figures are expressed using constant 2011 prices. There will be automatic annual technical adjustments for inflation. This is the basis on which the Council will now seek the consent of the European Parliament in accordance with Article 312(2) TFEU which stipulates that the Council shall adopt the MFF regulation after obtaining the consent of the European Parliament.

In order to ensure that the Union can fulfil all its financial obligations stemming from existing and future commitments in the period 2014-2020 in accordance with Article 323 TFEU, specific rules for the management of the yearly payments ceilings will be laid down.

The statistical data and forecasts used to establish the eligibility and envelopes for the CSF funds and also for the calculation of total GNI are those used for the Commission update of the proposal for the MFF Regulation in July 2012 (COM(2012) 388).

7. Having in mind the financial needs necessary to develop investment in Europe and the objective of maximising the leverage effect of actions supported by the EU budget, a more widespread use of financial instruments including project bonds will be made as part of the implementation of the next MFF. Financial instruments must address one or more specific policy objectives of the Union, operate in a non-discriminatory fashion, must have a clear end-date, respect the principles of sound financial management and be complementary to traditional instruments such as grants. The financial liability of the Union for such financial instruments in the next multiannual financial framework will be limited to the EU budget contribution and will not give rise to contingent liabilities for the Union budget.

Financial instruments can only be implemented when they meet strict conditions as laid down in the new Financial Regulation. Financing from the EU budget for the purpose of financial instruments should only happen on a reasonable scale and where there is an added value.

11. In order to allow the EU budget to play its crucial role in fostering growth, jobs and competitiveness, the following legislative texts now need to be adopted as soon as possible following the procedures enshrined in the Treaty and respecting the role of the different institutions. In particular:

  • the Regulation laying down the MFF for the years 2014-2020;
  • the Interinstitutional Agreement on cooperation in budgetary matters and on sound financial management;
  • the Decision on the system of own resources of the European Union as well as its implementing measures.

On the basis of the levels of commitments in this agreement, and noting the indicative figures proposed by the Commission for the objectives under all the Headings, the Council and the European Parliament are invited to come to a timely agreement on the appropriate funding of each of the proposed instruments, programmes and funds financed under the MFF, including the possibility of a review.

12. The European Council calls on the co-legislators to adopt swiftly the financing programmes implementing the 2014-2020 Multiannual Financial Framework so as to ensure their timely roll-out from 1 January 2014. It recalls the shared objective and responsibility of the Institutions and the Member States to simplify the funding rules and procedures. The European Council welcomes progress made in the on-going negotiations and urges the colegislators to agree on programmes that are simpler, that mark a clear reduction in administrative burden for public authorities and for beneficiaries. This would make the programmes more accessible, more flexible and strongly focused on the delivery of results in terms of growth and jobs, in line with our Europe 2020 strategy.

ECOFIN Council Conclusions, 12.2.13

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See also conclusions on Trade, External Relations and Mali



© European Council


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