EU BUDGET FOR THE FUTURE MFF 2021-2027

European Commission

EUROCITIES Urban Governance Group 26 June 2018

#EUBudget A NEW, MODERN BUDGET FOR THE EU-27 Following an open and inclusive debate KEY FEATURES

Multiannual Financial Framework 2021-2027 ´A modern budget for a Union that protects, empowers and defends´ MATCHING PRIORITIES WITH RESOURCES Broadly stable level in % of GNI

The size of the EU budget as percentage of Gross National Income (GNI)

Commitments ceiling in % EU GNI

European Development Fund

EU-28

*2014-2020 estimated commitments (UK expenditure excluded) in % EU27 GNI ** European Development Fund integrated (‘budgetised’) Source: NEW STRUCTURE OF THE EU BUDGET

Source: European Commission SIMPLIFICATION, TRANSPARENCY AND FLEXIBILITY

Fewer programmes grouped in policy clusters.

HEADING NEW 58 EXISTING PROGRAMMES 37 NEW PROGRAMMES In current MFF HEADING Erasmus+ POLICY CLUSTERS Programme for Employment and Social Innovation (EaSI) International Thermonuclear Experimental Reactor (ITER) Connecting Europe Facility (CEF) EFSI 1. Research & Innovation EGNOS and Galileo European statistical programme (ESP) European Earth Observation Programme (Copernicus) 2. European Strategic Investments Financial reporting and auditing 1 Interoperability Solutions and common frameworks for European public administrations, businesses and citizens (ISA2) Programme for the Competitiveness of Enterprises and small and medium-sized enterprises (COSME) Action programme for customs in the European Union (Customs 2020) 3. Single Market Action programme for taxation in the European Union (Fiscalis 2020) Anti-Fraud Information System (AFIS) 1A Euratom Research and Training Programme 4. Space Exchange, assistance and training programme for the protection of the against counterfeiting (Pericles 2020) International Thermonuclear Experimental Reactor (ITER) Nuclear decommissioning assistance programme in LT Euratom Research & Training Programme Nuclear decommissioning assistance programmes in BG and SK InvestEU Fund 2 Programme to promote activities in the field of the protection of the financial interests of the European Union 5. Regional Development & Cohesion Connecting Europe Facility (Hercule III) Digital Europe Programme (incl. Cybersecurity) European Solidarity Corps Single Market Programme (incl. Competitiveness and Small and Medium-Sized Enterprises - Enhancing consumers involvement in EU policy making in the field of financial services 6. Economic & Monetary Union COSME, Food Safety, Statistics, Competition and Administrative Cooperation) Cohesion Fund EU Anti-Fraud Programme European Regional Development Fund Cooperation in the Field of Taxation (FISCALIS) European Social Fund 7. Investing in People, Social Cohesion & Values Cooperation in the Field of Customs (CUSTOMS) YEI dedicated envelope (pm) European Space Programme Fund for European Aid to the Most Deprived (FEAD) European Regional Development Fund 3 Structural Reforms Support Programme (SRSP) Cohesion Fund 1B European Agricultural Fund for Rural Development (EAFRD) 8. Agriculture & Maritime Policy Support to the Turkish-Cypriot Community European Agricultural Guarantee Fund (EAGF) Reform Support Programme including the Reform Delivery Tool and Convergence Facility European Maritime and Fisheries Fund (EMFF) Protection of the Euro Against Counterfeiting Fisheries organisations and agreements European Social Fund + (incl. Integration of Migrants & Health) Programme for the Environment and Climate Action (LIFE) 9. Environment & Climate Action ERASMUS+ Asylum, Migration and Integration Fund (AMIF) European Solidarity Corps 2 Justice, Rights & Values Justice Programme Creative Europe (incl. MEDIA) Rights, Equality and Citizenship programme 10. Migration European Agricultural Guarantee Fund 4 Statement on Financial Intervention of the Communication Policy Area European Agricultural Fund for Rural Development Union action in the field of health (Health Programme) European Maritime & Fisheries Fund Consumer Programme Programme for Environment & Climate Action (LIFE) Food&feed 11. Border Management Asylum & Migration Fund 3 Internal Security Fund (ISF) Integrated Border Management Fund IT systems (migration & security) Internal Security Fund Instrument for Emergency Support within the Union Nuclear Decommissioning () Union Civil Protection Mechanism Nuclear Safety and Decommissioning (incl. for and ) Guarantee Fund for External Actions 12. Security European Defence Fund 5 European Fund for Sustainable Development Connecting Europe Facility - Common foreign and security policy Union Civil Protection Mechanism Cooperation with Greenland 13. Defence Neighbourhood, Development and International Cooperation Instrument (incl. external aspects of migration) Development Cooperation Instrument Humanitarian Aid European Instrument for Democracy and Human Rights Common Foreign & Security Policy European Neighbourhood Instrument 14. Crisis Response Greenland, Overseas Countries & Territories 4 Financial support for Turkish-Cypriot community Pre-Accession Assistance Instrument contributing to Stability and Peace Administrative Expenditure, Pensions and European Schools Macro Financial Assistance Partnership instrument for cooperation with third countries (PI) 6 Instrument for Pre-accession Assistance (IPA II) 15. External Action* EU Aid Volunteers initiative (EUAV) 5 Humanitarian aid (HUMA) Instrument for Nuclear Safety Cooperation (INSC) 16. Pre-accession Assistance special Administration instruments 17. Administration

Source: European Commission 6 ALIGNED TO POLITICAL PRIORITIES (3)

I SINGLE MARKET, INNOVATION & II COHESION & VALUES DIGITAL

1 Research & Innovation 5 Regional Development & Cohesion • European Regional Development Fund European • Horizon Europe Solidarity • International Thermonuclear Experimental Reactor • Cohesion Fund Fund (ITER) • Support to the Turkish-Cypriot Community • Euratom Research & Training Programme 6 Economic & Monetary Union 2 European Strategic Investments • Reform Support Programme including the Reform European • InvestEU Fund Delivery Tool and Convergence Facility Investment • Connecting Europe Facility • Protection of the Euro Against Counterfeiting Stabilisation Function • Digital Europe Programme (incl. Cybersecurity) 7 Investing in People, Social Cohesion & Values 3 Single Market • European Social Fund + • Single Market Programme (incl. Integration of Migrants & Health) • ERASMUS+ Globalization (incl. Competitiveness and Small and Medium-Sized Adjustment Enterprises - COSME, Food Safety, Statistics, • European Solidarity Corps Fund Competition and Administrative Cooperation) • Justice, Rights & Values • EU Anti-Fraud Programme • Creative Europe (incl. MEDIA) • Cooperation in the Field of Taxation (FISCALIS) • Cooperation in the Field of Customs (CUSTOMS) 4 Space • European Space Programme

7 ALIGNED TO POLITICAL PRIORITIES (4)

III NATURAL RESOURCES & IV MIGRATION & BORDER ENVIRONMENT MANAGEMENT

8 Agriculture & Maritime Policy 10 Migration • European Agricultural Guarantee Fund • Asylum & Migration Fund European • European Agricultural Fund for Rural Development 11 Border Management Border and • European Maritime & Fisheries Fund • Integrated Border Management Fund Coast Guard 9 Environment & Climate Action 25% climate (Frontex) • Programme for Environment & Climate Action mainstreaming across the (LIFE) EU Budget VI NEIGHBOURHOOD & THE WORLD V SECURITY & DEFENCE 15 External Action* • Neighbourhood, Development and International 12 Security Cooperation Instrument • Internal Security Fund (incl. external aspects of migration) • Nuclear Decommissioning (Lithuania) • Humanitarian Aid • Nuclear Safety and Decommissioning • Common Foreign & Security Policy (incl. for Bulgaria and Slovakia) • Overseas Countries and Territories 13 Defence European (including Greenland) Peace • European Defence Fund Facility • 16 Pre-Accession Assistance • Connecting Europe Facility - Military Mobility • Pre-Accession Assistance 14 Crisis Response • Union Civil Protection Mechanism (rescEU) *The European Peace Facility is an off - budget fund outside the Financial Emergency Framework Aid Reserve

8 MATCHING PRIORITIES WITH RESOURCES Rebalancing and fairness

Evolution of main policy areas in the EU budget

*Adjusted for 1995 enlargement

Source: European Commission REINFORCEMENT OF BRATISLAVA/ROME PRIORITIES

Note: Compared to Multiannual Financial Framework 2014-2020 at EU-27, including European Development Fund

Source: European Commission STRONGER LINK WITH THE EUROPEAN SEMESTER OF ECONOMIC POLICY COORDINATION

coordination and roadmap for the short, technical and financial complementarity of financing mid- and long-term support for reforms at from cohesion policy funds planning and monitoring national level and the new Reform Support of investments Programme SOUND FINANCIAL MANAGEMENT AND THE RULE OF LAW

New mechanism will allow: It will apply to: It would not affect: to suspend, reduce or restrict all EU funds implemented in the individual beneficiaries of access to EU funding shared management EU funding in a manner proportionate to to funds implemented in direct Member States would the nature, gravity and scope and indirect management continue to be obliged to of generalised deficiencies of where the financial beneficiary implement the affected the rule of law is a government entity programmes and pay final recipients FLEXIBILITY Providing an agile response to new needs and challenges

Programming Extra flexibility between headings and years • Re-programming at mid-term • Blending of funds & transfers between management modes • Global Margin for Payments • Contingency Margin • Flexibility Instrument Response to crises & • From Global Margin for Commitments to unforeseen events Union Reserve:  Unused margins from previous years • Programme Reserves (unallocated envelopes) within each programme  Decommitments: Funds that have • Agricultural Crisis Reserve been committed to the EU budget • Union Civil Protection Mechanism but which are ultimately not spent in • Special Instruments: the implementation of EU programmes Emergency Aid Reserve

European Union Solidarity Fund

European Globalisation Adjustment Fund

Off-budget: European Peace Facility FINANCING THE EU BUDGET (1) Simplification and diversification of revenue sources

Source: European Commission FINANCING THE EU BUDGET (2)

Development of sources for financing of the EU budget.

Source: European Commission NEXT STEPS Q&A THANK YOU RESEARCH, INNOVATION and DIGITAL (Heading1)

 Building on the success of the EU’s past flagship research and innovation programmes, the Commission proposes to increase investment in research-innovation and digital by allocating 1.3% €118.3 billion for the future MFF.

Source: European Commission DIGITAL TRANSFORMATION (Heading 1)

 The Commission proposes to create a new Digital Europe programme with an overall budget of €9.2 billion to shape and support the digital transformation of Europe’s society and economy.

Examples:

• Artificial intelligence • Super-computing • Investing in Europeans' digital skill • Developing very high capacity digital networks • Joining forces against cyberattacks

 The digital strand of the Connecting Europe Facility has a budget of €3 billion which will finance digital connectivity infrastructure.

Source: European Commission INVESTMENT (Heading 1) Streamlining tools to promote investment: InvestEU Fund

Inside the EU REGIONAL DEVELOPMENT AND COHESION (Head.2)

 A strengthened link with the European Semester  A simplified framework and less red tape for the beneficiaries of the funds  A more tailored approach to regional development

Source: European Commission THE ECONOMIC AND MONETARY UNION (Head.2 + outside MFF)

 In the future long-term EU budget two new instruments are proposed: • a Reform Support Programme • a European Investment Stabilisation Function

 These new instruments will help: • support economic and social convergence • maintain macroeconomic stability in the euro area

1.3%

Source: European Commission INVESTING IN PEOPLE (Heading 2)

 The proposals upgrade the European Social Fund into a European Social Fund+ with an overall budget of around €100 billion, simplifying and increasing its effectiveness.

 More than doubling the size of a substantially strengthened, inclusive and extended Erasmus+ programme, further promoting learning mobility across the EU.

 A reinforced European Solidarity Corps will integrate the existing EU Aid Volunteers programme. This will offer European citizens a unique opportunity to engage in solidarity activities within and outside Europe.

Source: European Commission COMMON AGRICULTURAL POLICY (Heading 3)

 The modernised Common Agricultural Policy, based on a new delivery model, will: • Place a greater emphasis on the environment and climate; • Support the transition towards a more sustainable agricultural sector; • Support the development of vibrant rural areas.

 The modernised policy will have a budget of €365 billion and continue to be built around two pillars: • direct payments to farmers and • rural development funding.

 For rural development, the Commission proposes to increase national co-financing rates. In addition, an amount of €10 billion in Horizon Europe will support research and innovation in food, agriculture, rural development and the bio economy.

Source: European Commission SUSTAINABILITY, ENVIRONMENT PROTECTION AND FIGHT AGAINST CLIMATE CHANGE (Heading 3)

 Common Agricultural Policy will place a greater emphasis on environment and climate. It will support the transition towards more sustainable ways of providing safe and high-quality food for the EU’s consumers.

 All farmers receiving area payments will have to comply with a range of requirements related to climate change, water, soil, biodiversity and landscapes.

Source: European Commission MIGRATION AND BORDER MANAGEMENT (Heading 4)

 The EU budget for the management of external borders, migration and asylum will be significantly reinforced, overall, reaching more than €35 billion, compared to €13 billion for the period 2014-2020.

1.3%

Source: European Commission SECURITY AND DEFENCE (Heading 5)

 The EU budget for security and defence will be significantly reinforced, overall €28 billion of which €5 billion specifically for security.

 A separate extra-budgetary funding mechanism, the European Peace Facility 1.3% is proposed for action in the field of external security and defence.

Source: European Commission DEFENCE (Heading 5)

 The Commission proposes a budget of €13 billion (over the 7 years period) be dedicated to the European Defence Fund.

 This will place the EU among the top 4 of defence research and technology investors in Europe. 1.3%

 Enhancing strategic transport infrastructures to make them fit for military mobility, with almost €7 billion through the Connecting Europe Facility.

Source: European Commission NEIGHBOURHOOD AND THE WORLD (1) – Heading 6

 The Commission proposes to increase investment in the external actions up to 26% to reach €123 billion (incl. the European Development Fund).

 Major restructuring of the EU’s external action instruments to provide 1.3% better coherence, build on cooperation effectiveness, simplify processes and use economies of scale.

Source: European Commission NEIGHBOURHOOD AND THE WORLD (2) – Heading 6 The neighbourhood, development and international cooperation instrument

 geographic pillar (‘engaging with partners’)  thematic pillar (‘reaching common goals’)  rapid-response pillar for crisis management, conflict prevention and resilience building  emerging challenges and priorities cushion to allow for flexibility in response to existing or emerging urgent priorities  new investment architecture

Source: European Commission