S.2. Internal Energy Market


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EC presents 2021-2027 Multiannual Financial Framework

Wednesday, May 2, 2018

The EC presented the 2021-2027 Multiannual Financial Framework, a 7-year plan that sets the limits for the EU’s annual general budgets. The proposed budget combines new instruments with modernised programmes to deliver efficiently on the EU’s priorities, to rise to new challenges and to fill in the gap left by Brexit, which the EC has estimated will cut budget contributions by around €12 billion a year.

Overall, the EC proposed a long-term budget of €1,135 trillion in commitments covering the 2021-2027 the period – equivalent to 1,11% of the EU 27’s gross national income (GNI). This includes the integration into the EU budget of the European Development Fund – the EU’s main tool for financing development cooperation with countries in Africa, the Caribbean, and Pacific, which to date is an intergovernmental agreement.

The new plan makes cuts to the biggest expenses under the current budget, namely with a 5% cut in agriculture spending, a 7% cut in cohesion, and a 4% cut in direct payments compared to the prior seven-year budget. It also reorients cohesion funds towards international education and reforms.

A quarter of the 2021-2017 budget will be dedicated to spending designed to combat climate change, including funding for RES, energy efficiency, and innovation as well as aid for non-European developing countries to help fight the consequences of a changing climate.

The proposed budget is divided into eight priorities, namely: (i) single market, innovation and digital; (ii) cohesion and values; (iii) natural resources and environment; (iv) migration and border management; (v) security and defence; (vi) neighbourhood and the world; (vii); European public administration; and (viii) instruments outside the MIF ceilings.

Building on the success of Horizon 2020, the EC has created the Horizon Europe, a new programme that will continue to promote research excellence and strengthen the focus on innovation, for instance through the development of prototypes, intangible assets, knowledge and technology transfer. Horizon Europe will have a budget of €97,9 billion.

Through the reformed Connecting Europe Facility (CEF), the EC plans to continue to invest in trans-European transport, digital, and energy networks. The future programme “will better exploit the synergies between transport, digital and energy infrastructure, for example through developing alternative fuels infrastructure or sustainable and smart grids underpinning the Digital Single Market and the Energy Union”. CEF Energy will have a budget of €8,6 billion.

In the weeks to come, the EC will present detailed proposals for the future sector-specific financial programmes. The decision on the future long-term EU budget will then fall with the Council, acting unanimously, with the consent of the EP.