After months of complex negotiations, the European Parliament finally approved the EU’s budget for 2014-2020 yesterday (19 November). The budget regulation was approved by 537 votes to 126, with 19 abstentions. The accompanying Inter-Institutional Agreement was approved by 557 votes to 118, with 11 abstentions.
The Parliament passed the legislative resolution laying down the multi-annual financial framework (MFF) for the years 2014–2020 (click here, for pages 1 to 31). According to the Parliament, all the conditions which MEPs had set out in July (see background) were met.
The overall budget for the next seven years is €960 billion in commitments and €908 billion in payments (at 2011 prices).
Pro-European MEPs regretted that the other EU institutions had blocked a more ambitious budget. But the feeling prevailed that under the current circumstances, the compromise reached was the best possible, and that Parliament was able to leave its mark on the inter-institutional agreement.
Payments shortfalls remedied
Firstly, Parliament wanted the recurring shortfall in payments, which made it almost impossible for the Commission to fulfill 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 the 2013 budget.
Legal bases for all EU programmes agreed
Secondly, Parliament also insisted that 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 on during this week's 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 complex and inexplicable. Member states agreed to the setting up of this group, which will start its work in the coming months.
Flexibility: making best use of every euro
In the June 2013 agreement (see background), 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 euro is used where it is most needed, especially now that annual budgets will decrease.
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 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 five-year political cycles of the EU institutions. The review will be accompanied by a legislative proposal for revision.