mff 2014-20 © european commission 11 the multi-annual financial framework 2014-2020 a budget for...
TRANSCRIPT
MFF 2014-20
© European Commission 11
The Multi-annual Financial Framework 2014-2020
A budget for Europe 2020
Janusz Lewandowski Commissioner for Budget and Financial Programming of the European Commission
MFF 2014-20
© European Commission 2
Challenges• Lisbon Treaty : more responsibilities
• Connect Europe better
• Unstable neighborhood
• Austerity climate
• Financial crisis interventions
• Response to natural disasters
MORE EUROPEFOR THE SAME MONEY!
Responses• European logic fully geared to Europe 2020 strategy
• Modernised budget - output oriented, simplification, conditionality, leveraging investment
• Limited in size, but redesigned - savings in some areas - more to areas that matter - multi-purpose expenditure
• Budgetary rigour, administrative limits
• New legitimacy of traditional policies
EU Budget = policy in numbers
MFF 2014-20
© European Commission 3
1. Background on financial frameworks and EU budget
2. Overall volume
3. Overview of expenditure side
4. Own resources and corrections
Overview of the presentation
MFF 2014-20
© European Commission 4
History
• The Financial Framework (previously ‘financial perspective’) was created in 1988 to create financial stability and ensure budgetary discipline
• Currently we have the 4th MFF (2007-2013), after the 2 package proposals DELORS I (1988-1992) and DELORS II (1993-1999), and Agenda 2000 (2000-2006)
• Since the Treaty of Lisbon (1-12-2009), the MFF became legally binding through a regulation and cannot just be laid down in an Interinstitutional Agreement (IIA).
• In the Council, the 27 Member States must unanimously adopt a regulation on the MFF with consent of the European Parliament
Why do we need a multi-annual financial framework (MFF)?
MFF 2014-20
© European Commission 5
• The MFF defines maximum amounts (‘ceilings’) by category of expenditure (‘headings’).
• Any expenditure must have a legal basis.
• Allows predictability of EU expenditure
The MFF provides a 7-year framework for the annual budget It structures the amounts outlined for each EU policy in each
legal basis (e.g. agriculture, structural funds,…)
What is the multi-annual financial framework (MFF)?
MFF 2014-20
© European Commission 6
0,0
2.000,0
4.000,0
6.000,0
8.000,0
10.000,0
12.000,0
14.000,0
FR
DE
ES IT PL
UK
BE
EL
PT
HU
RO CZ
NL
AT
LT
LU
SE IE DK FI
SK
BG
EE
LV SI
CY
MT
0,0%
1,5%
3,0%
4,5%
6,0%
7,5%
1a. Competitiveness 1b. Cohesion 2. Natural resources3a. Freedom, security, justice 3b. Citizenship 4. The EU as a global partner5. Administration 6. Compensation % GNI
In million € In % GNI
EU funds’ beneficiaries 2009
MFF 2014-20
© European Commission 7
Overall figures for 2014-2020 MFF
Commitments€ 1025 Billion
1,05%of GNI
Payments € 972 Billion1,00%of GNI
MFF 2014-20
© European Commission 8
What does constant in real terms mean?
MFF Commitments:• Level of 2013 x 7 years
= € 1025 Billion in 2011 prices= 1.05 % of GNI
• Outside the MFF: € 58.5 BN in 2011 prices
MFF Payments:• € 972 Billion = 1.00 % of GNI
MFF 2014-20
© European Commission 9
Ambitious, but realistic…
2007-2013 2014-20201. Smart and Inclusive Growth 445,5 490,9 10,2%Of which Competitiveness 77,8 114,9 47,7%Of which infrastructure 12,9 40,0 209,7%Of which cohesion policy 354,8 336,0 -5,3%2. Sustainable Growth: natural resources 421,1 382,9 -9,1%Of which Market related expenditure and direct payments 322,0 281,8 -12,5%3. Security and Citizenship 12,4 18,5 49,9%of which Freedom, Security and Justice 7,6 11,6 53,0%of Citizenship 4,8 6,9 44,9%4. Global Europe 56,8 70,0 23,2%5. Administration (including pensions and European schools) 56,9 62,6 10,1%Of which administrative expenditure of EU institutions 48,4 50,5 4,2%6. Compensations 0,9Total appropriations 993,6 1.025,0 3,2%In % of EU-27 GNI 1,12% 1,05%
COMPARISON MFF 2007-13/2014-20EUR billion in 2011 prices
Difference (in %)
MFF 2014-20
© European Commission 10
Decreasing payment share
0,85%
0,90%
0,95%
1,00%
1,05%
1,10%
1,15%
1,20%
1,25%
% of EU GNI
'93-'99 average 1.18%
'00-'06 average 1.06% '07-'13 average 1.06%'93-'99 average1.06%
'00-'06 average0.94%
1.27% of GNP ≡ 1.24% of GNI excl. FISIMfrom 1.20% to 1.27% of GNP
1.23% of GNI incl. FISIM
Own Resources ceiling
Payment ceiling of Financial Framework('14-'20 COM proposal)
Payments actuallyexecuted/appropriations
'14-'20 average 1.00%
MFF 2014-20
© European Commission 11
Development of CAP and cohesion share in the budget between 2013 and 2020
20%
25%
30%
35%
40%
45%
2013 2014 2015 2016 2017 2018 2019 2020
Common agricultural policy Cohesion policy
MFF 2014-20
© European Commission 12
Despite restraint - significant re-distribution in key policy areas
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
2007-2013 54,9 9,1 12,9 11,5 58,9
2014-2020 80,0 15,2 50,0 18,5 70,0
Research and innovation
Education and culture
Infrastructure funding
Security and citizenship
Global Europe
MFF 2014-20
© European Commission 13
Connecting Europe
• Energy, transport and digital networks
• Cross-border multi-country investments to the benefit of internal market
• Strong co-ordination with cohesion policy
• Proposed use of EU project bonds
Connecting Europe Facility 40 EUR billion
( + 10 EUR billion earmarked under Cohesion Fund)
MFF 2014-20
© European Commission 14
Cohesion policy proposal
EUR billion2011 prices
Cohesion Fund* 68.7
Less developed regions 162.6
Transition regions 39.0
More developed regions 53.1
Cooperation 11.7
Extra allocation for outermost and northern regions 0.9
Total ** 336.0
Multiannual Financial Framework 2014-2020
*Cohesion Fund will earmark 10 billion EUR for the new Connecting Europe Facility
** ESF minimum share: 25%
• Three categories of regions – Less developed regions (GDP per capita
< 75% of EU average)– Transition regions (GDP per capita
between 75% and 90%)– More developed regions (GDP per capita
> 90%)
• Cohesion Fund for Member States with GNI per capita <90%
• Territorial cooperation
• Concentration on poorer and weakest regions
• Stronger conditionality
• Thematic concentration
MFF 2014-20
© European Commission 15
• Declining share in the EU budget until 2020
• Greening of CAP - direct aid 30 % linked to environment measures
• Progressive convergence towards EU average:
– Close 33% of the gap with 90% of EU average– Financed by all Member States above the average
• Market measures: Emergency Mechanism
• European Globalisation Fund to help farmers adapt to globalisation
Agriculture
MFF 2014-20
© European Commission 16
Change of Direct Payments between 2013 and 2020
€/ha 2013 €/ha 2020 Change
Highest increase of all Member States
87 144 66%
Highest reduction of all Member States
462 431 -7%
MFF 2014-20
© European Commission 17
• Budget under restraint
– Staff reduction up to 5%
– Efficiency gains (increase working hours to 40 a week)
– Reviewing certain benefits in line with similar trends in Member States
• Administrative expenditure discipline for all EU institutions
Administrative expenditure*
MFF 2014-20
© European Commission 18
• Commission proposal :– End statistical VAT own resource as of 2014– Introduce 2 new own resources
• Financial Transaction Tax• VAT resource
– Radically simplify the system of corrections
• In comparison with current system – Simpler– Fairer– More transparent
A new own resources system
MFF 2014-20
© European Commission 19
New structure of own resources
Share of Own Resources Types in Total Own Resources Payments
29%
78%
40%
0%
61%
0%
56%
12%
60%
10%
44%
10%
0%
20%
40%
60%
80%
100%
1978 1988 2013 2020
Traditional own resources + new OR
GNI resource (1978 MS Financial Contributions)
VAT resource
MFF 2014-20
© European Commission 20
• Commission proposal – Proposal for a Council Directive on FTT adopted
on 27/9/2011 complemented by proposals in the area of own resources.
– Financial transaction tax (FTT) to be introduced on 1/1/2014.
– Applicable tax rates defined in the Directive. – The revenue arising from the FTT can be wholly or
partly used as own resource for the EU budget.
EU taxation of financial sector
MFF 2014-20
© European Commission 21
• Advantages of the FTT– Ensure that financial institutions make a fair contribution to covering
the costs of the recent crisis.– Ensure even taxation of the sector vis-à-vis other sectors.– Disincentive for overly risky transactions and complement regulatory
measures.– Avoid fragmentation in the internal market for financial services. – FTT more efficient at EU than at national level.– Support in European Parliament, national parliaments, NGOs and
public at large (Eurobarometer: 61% in favour and 50% or more in 20 Member States)
As a new revenue stream the FTT will contribute to budgetary consolidation of Member States by reducing their contributions to the EU budget. All MS will benefit in line with their GNI.
EU taxation of financial sector
MFF 2014-20
© European Commission 22
• Commission proposal– Maximum rate in OR decision: 2%– New VAT resource from 1/1/2018 at the latest. Effective rate: 1 %
• Advantages– Link EU VAT policy and EU budget– Part of wider revision of VAT systems: fight against VAT fraud and
reinforce harmonisation of VAT systems
Combining the 2 new OR – Critical mass to reduce contributions to EU budget– Ensures fair distribution of impact on Member States – Link to EU policies
VAT
MFF 2014-20
© European Commission 23
• Commission proposal
– Replace all corrections mechanisms by a system of fixed annual lump sums for 2014-2020
– Based on Fontainebleau principle:"any member State sustaining a budgetary burden which is excessive in relation to its
relative prosperity may benefit from a correction at the appropriate time."
• Advantages
– Fairness - equal treatment of the Member States
– Simplicity and transparency
– Lump-sum correction mechanism to correspond to MFF duration
– Avoids perverse incentives for expenditure
Correction mechanisms
MFF 2014-20
© European Commission 24
Correction mechanisms
Average annual lumpsum
2014-2020
GROSS AMOUNT
DE 2500NL 1050SE 350UK 3600
TOTAL 7500
(in million of euro / in current
prices)
LUMPSUMS ADJUSTED FOR RELATIVE PROSPERITY
MFF 2014-20
© European Commission 25
• Timing of negotiations:
– 2011: Preparatory work under PL presidency
– June 2012 (DK pres) : Council level
– December 2012 (CY pres): Agreement on new MFF regulation between European Parliament and Council
– 2013: Adoption by co-decision of new legal bases
Abolish VAT-based own resourceWay ahead
MFF 2014-20
© European Commission 26
Thank You
Multiannual Financial Framework