At a time when the EU is keeping its nose to the grindstone because of the COVID-19 crisis, which is testing its strength and capacity for action, the European Parliament continues to urge the European Council to approach the issue of the 2021-2027 Multiannual Financial Framework (MFF) with a greater sense of responsibility.

The next MFF must rise to the current challenges that have been clearly defined by the new European Commission headed by Ursula von der Leyen. The initial budget proposals by the Commission (under Jean-Claude Juncker’s presidency) and by the European Council President deeply underestimate the EU’s financial needs to meet these challenges. Since then, the COVID-19 crisis has hit the continent. We now need an even more ambitious European budget allowing us to relaunch our economies with the establishment of a massive recovery plan, in line with the objectives already agreed.

The Brexit has put a strain on the Union’s financial capacities for the next period but should in no way be passed on to traditional policies (CAP, cohesion policy). The European Parliament is fighting to maintain the funding of these long-standing policies at the same level as today. But this financial pressure should neither limit our ambitions in other policies nor the scope of the Green Deal. The latter must be able to benefit from the funding needed to implement the necessary and ambitious European ecological transition in order to achieve the objectives of the 2015 Paris Agreement signed by the EU, i.e. to reach carbon neutrality by 2050.

Today, accounting logics prevail in budget negotiations. At the last European Summit in February 2020, whose negotiations were based on the proposal of President Charles Michel (the so-called ‘negotiating box’), a few countries known as the ‘frugals’ (the Netherlands, Austria, Sweden and Denmark) blocked the negotiations by not departing from their initial position (i.e. an EU budget amounting to 1.00% of the EU-27 GDP). The battle between these countries and the ‘Friends of cohesion’ (the thirteen states that have joined the Union since 2004, as well as Greece, Portugal, Spain and Italy), which took this opportunity to rebrand themselves as “Friends of an Ambitious Europe”, was hard. For the ‘frugals’, it was no longer a question of the overall means to be allocated to the Union’s major objectives, but of the amount each State pays or receives from the EU (the so-called juste retour logic). The reason? More than 80% of the European Union budget (amounting to 1 082 billion of euros) is financed by direct contributions from the Member States. Only around 20% is financed by genuine EU’s own resources such as customs duties levied on imports of products (the so-called “traditional own resources”). These accounting logics are very detrimental to European integration, since they are based on purely national reasoning.

Concerning the next MFF, the European Parliament has already stated that it would not adopt any proposal without a real progress on the reform of the financing system, meaning the introduction of new own resources. MEPs propose the creation of new green own resources (a non-recycled plastics contribution, revenues accruing from the Emissions Trading Scheme (EU ETS), or a Carbon Border Adjustment Mechanism) as well as new own resources related to the single market (a Financial Transaction Tax (FTT) at the EU level, a taxation of companies in the digital sector and a Common Consolidated Corporate Tax Base (CCCTB)). These new own resources should not be seen as additional constraints, but as new solutions so as not to increase the financial pressure on the Member States. The lively debate on the EU budget is now spreading over the whole press around the continent following the coronavirus crisis. If we establish a new “Marshall Plan” for economic recovery, how to finance it? To solve this issue, I firmly believe this extraordinary event requires breaking several taboos, such as the introduction of a common debt instrument. The European Commission will soon revise its proposal; we urge it to be bold, for the sake of our prosperity and new growth model.