MEPs warn their approval of EU budget isn’t automatic

EU leaders may have reached an agreement on the bloc’s long-term budget and its Covid-19 recovery fund, but MEPs have warned that their own approval cannot be taken for granted.

MEPs have a final say on the Multiannual Financial Framework, as the EU’s long-term budget is known, and they have long called for a more ambitious plan than the European Commission and member states. The current MFF runs out at the end of this year, with the next set to cover the next seven years.

In a statement, the European Parliament’s negotiating team welcomed the fact that EU leaders finally reached a political compromise, and that the Recovery Instrument is to be financed with a borrowing of €750 billion. But they emphasised that the EP remained critical on some essential aspects of the compromise, particularly on its long-term perspective.

“The Recovery Instrument is an important step towards a new ambition for the Union: greener, more competitive and digital. This massive borrowing is an historical moment for the European Union, and we should not disregard what just happened,” the team said.

“However we regret that the member states decided to entirely abandon the ‘bridge solution’, whose objective was precisely to provide immediate crisis response to the citizens, following the Covid-19 outbreak. In a context where the virus in on the rise again, citizens need certainty. Parliament will continue working hard to ensure that the recovery starts without delays. Furthermore, democratic oversight must be substantially increased: Parliament, as one arm of the budgetary authority will fight to be fully involved in the establishment and implementation of the Recovery Instrument,” they maintained.

EP ‘cannot accept’ renouncing EU’s long-term objectives

The six MEPs also said that the picture remained much more negative when it came to the Multiannual Financial Framework, as the EU’s long-term budget is known.

“Parliament cannot accept the proposed record low ceilings as they mean renouncing to the EU’s long-term objectives and strategic autonomy, while citizens ask for more. More European solidarity, more European action in public health, in research and digitalisation, youth, and in the historical fight against climate change. Key programmes to reach these objectives have been considerably shrunk, and lost most of their top-ups under Next Generation EU,” the team warned.

They added that the EP will strive to secure improvements to the deal, including higher allocations to future-oriented programmes.

“And if our conditions are not sufficiently met we will adopt the programmes on the basis of the existing MFF, as foreseen by the Treaty,” the members maintained.

Compromise a ‘flagrant missed opportunity’ on EU revenue

The  MEPs also said that EU leaders missed a crucial opportunity when it came to modernising the way the EU generates revenue, making it fairer and more transparent.

“The EU is now allowed to borrow funds but there is no certainty on how the debt will be repaid,” they maintained, adding that MEPs believed that the recovery should neither reduce investment capacity nor harm national taxpayers.

“This is why new genuine own resources are the solution to repay the common debt, but the plastic-based contribution will not do the trick alone! We recall our strict demand to that respect: a binding commitment for the introduction of additional own resources as soon as 2021, and still in the course of the MFF 2021-2027. Furthermore, despite the UK leaving the EU, the insistence on the rebates has been extremely tough and results in a big step back for the European project: instead of being abolished, rebates are kept and even increased,” they said.

Their position, however, is in sharp contrast to that of Malta: while EU leaders agreed that the Commission would put forward proposals such as a carbon border tax and a digital levy, with a view to introducing them by 2023, Prime Minister Robert Abela has since emphasised that Malta retains a veto on taxation matters.

The negotiating team also stressed that the EP was firmly against watering down the mechanism to reduce or suspend EU funding for member states which disrespect the rule of law. But it emphasised that it remained ready to enter negotiations with the aim of achieving “a better agreement for Europe.”