Legal provisions of COM(2018)322 - Multiannual financial framework for the years 2021 to 2027

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dossier COM(2018)322 - Multiannual financial framework for the years 2021 to 2027.
document COM(2018)322 EN
date May  3, 2018


Chapter 1
General provisions

Contents

Article 1 - Multiannual Financial Framework

This regulation lays down the multiannual financial framework for the period 2021 to 2027 (MFF).

Article 2 - Compliance with the ceilings of the MFF

1. The European Parliament, the Council and the Commission shall, during each budgetary procedure and when implementing the budget for the year concerned, comply with the annual expenditure ceilings set out in the Annex ('MFF ceilings').

The sub-ceiling for Heading III as set out in the Annex is established without prejudice to the flexibility between the two pillars of the Common Agricultural Policy (CAP). The adjusted ceiling to be applied to pillar I of the CAP following the transfers between the European Agricultural Fund for Rural Development and direct payments shall be laid down in the relevant legal act and the MFF shall be adjusted accordingly under the technical adjustment provided for in Article 5 of this Regulation.

2. Where it is necessary to use the resources from the special instruments provided for in Articles 9 to 14, commitment and corresponding payment appropriations shall be entered in the budget over and above the relevant MFF ceilings.

3. Where it is necessary to mobilise a guarantee for financial assistance to Member States authorised in accordance with Article 208(1)] of Regulation No EU [xxx/201x] ('the Financial Regulation'), the necessary amount shall be mobilised over and above the ceilings laid down in the MFF.

Article 3 - Respect of own resources ceiling

4. For each of the years covered by the MFF, the total appropriations for payments required, after annual adjustment and taking account of any other adjustments and revisions as well as the application of paragraphs 2 and 3 of Article 2, may not be such as to produce a call-in rate for own resources that exceeds the own resources ceiling set in accordance with the Council decision on the system of own resources of the European Union adopted in accordance with the third paragraph of Article 311 TFEU ('Own Resources Decision') in force.

5. Where necessary, the ceilings set in the MFF shall be lowered in order to ensure compliance with the own resources ceiling set in accordance with the Own Resources Decision in force.

Chapter 2
Adjustments to the MFF

Article 4 - Global margin for payments

1. Every year, starting in 2022, as part of the technical adjustment referred to in Article 5, the Commission shall adjust the payment ceiling for the years 2022-2027 upwards by an amount equivalent to the difference between the executed payments and the MFF payment ceiling of the year n-1.

2. Any upward adjustment shall be fully offset by a corresponding reduction of the payment ceiling for year n-1.

Article 5 - Technical adjustments

1. Each year the Commission, acting ahead of the budgetary procedure for year n+1, shall make the following technical adjustments to the MFF:

(a)revaluation, at year n+1 prices, of the ceilings and of the overall figures for appropriations for commitments and appropriations for payments;

(b)calculation of the margin available under the own resources ceiling set in accordance with the Own Resources Decision in force;

(c)calculation of the global margin for payments provided for in Article 4;

(d)calculation of the global margin for commitments (Union reserve) provided for in Article 12;

(e)calculation of the amounts to be made available to the Flexibility Instrument under the second subparagraph of Article 13(1);

(f)calculation of the absolute amount of the Contingency Margin provided for in Article 14.

2. The technical adjustments referred to in paragraph 1 shall be made on the basis of a fixed deflator of 2 % per year.

3. The Commission shall communicate the results of the technical adjustments referred to in paragraph 1 and the underlying economic forecasts to the European Parliament and the Council.

4. Without prejudice to Article 6, 7 and 8, no further technical adjustments shall be made in respect of the year concerned, either during the year or as ex post corrections during subsequent years.

Article 6 - Adjustment of cohesion policy envelopes

1. The Commission shall in 2024, together with the technical adjustment for the year 2025, review all Member States' total allocations under the 'Investment for growth and jobs' goal of cohesion policy for the years 2025 to 2027, applying the allocation method set out in the relevant basic act on the basis of the then available most recent statistics and of the comparison, for the capped Member States, between the cumulated national GDP observed for the years 2021 to 2023 and the cumulated national GDP estimated in 2018. It shall adjust those total allocations whenever there is a cumulative divergence of more than +/ - 5 %.

2. The adjustments required shall be spread in equal proportions over the years 2025 to 2027 and the corresponding ceilings of the MFF shall be adjusted accordingly. The payment ceilings shall also be adjusted accordingly to ensure an orderly progression in relation to the appropriations for commitments.

3. The total net effect, whether positive or negative, of the adjustments referred to in paragraph 2 shall not exceed EUR 4 billion.

Article 7

Adjustments related to measures linked to sound economic governance or to the protection of the Union’s budget in the case of generalised deficiencies as regards the rule of law in the Member States

In the case of the lifting, in accordance with the relevant basic acts, of a suspension of budgetary commitments concerning Union funds in the context of measures linked to sound economic governance or to the protection of the Union’s budget in the case of generalised deficiencies as regards the rule of law in the Member States, the amounts corresponding to the suspended commitments shall be transferred to the following years and the corresponding ceilings of the MFF shall be adjusted accordingly.

Suspended commitments of year n may not be entered in the budget beyond year n+2.

Article 8 - Adjustment following new rules or programmes under shared management

In the event of the adoption after 1 January 2021 of new rules or programmes under shared management for the Structural Funds, the Cohesion Fund, the European Agricultural Fund for Rural Development, the European Maritime and Fisheries Fund, the Asylum and Migration Fund, the Internal Security Fund and the instrument for border management and visa under the Integrated Border Management Fund, the amounts corresponding to the allocations not used in 2021 shall be transferred in equal proportions to the years 2022 to 2025, and the corresponding ceilings of the MFF shall be adjusted accordingly.

Chapter 3
Special instruments

Article 9 - European Globalisation Adjustment Fund

1. The European Globalisation Adjustment Fund, the objectives and scope of which are set out in Regulation (EU) XXXX/XX of the European Parliament and of the Council 18 ], shall not exceed a maximum annual amount of EUR 200 million (2018 prices).

2. The appropriations for the European Globalisation Adjustment Fund shall be entered in the general budget of the Union as a provision.

Article 10 - European Union Solidarity Fund

1. The European Union Solidarity Fund, the objectives and scope of which are set out in Council Regulation (EC) No 2012/2002 19 , shall not exceed a maximum annual amount of EUR 600 million (2018 prices). On 1 October of each year, at least one quarter of that annual amount shall remain available in order to cover needs arising until the end of that year. The portion of the annual amount not used in year n may be used up to year n+1. The portion of the annual amount stemming from the previous year shall be drawn on first. That portion of the annual amount from year n which is not used in year n+1 shall lapse.

2. In exceptional cases and if the remaining financial resources available in the European Union Solidarity Fund in the year of occurrence of the disaster are not sufficient to cover the amount of assistance considered necessary, the Commission may propose that the difference be financed through the annual amounts available for the following year.

Article 11 - Emergency Aid Reserve

1. The Emergency Aid Reserve may be used for a rapid response to specific emergency needs within the Union or in third countries following events which could not be foreseen when the budget was established, in particular for emergency response and support operations following natural or man-made disasters, humanitarian crises, in cases of large-scale public health, veterinary or phytosanitary threats, as well as in situations of particular pressure resulting from migratory flows at the Union's external borders where circumstances so require.

2. The annual amount of the Reserve is fixed at EUR 600 million (2018 prices) and may be used up to year n+1 in accordance with the Financial Regulation. The Reserve shall be entered in the general budget of the Union as a provision. The portion of the annual amount stemming from the previous year shall be drawn on first. That portion of the annual amount from year n which is not used in year n+1 shall lapse.

By 1 October of each year, at least one quarter of the annual amount for year n shall remain available to cover needs arising until the end of that year.

No more than half of the amount available until 30 September each year may be mobilised for, respectively, internal or external operations.

As of 1 October, the remaining part of the amount available may be mobilised either for internal or external operations to cover needs arising until the end of that year.

Article 12 - Global Margin for Commitments (Union Reserve)

1. The Global Margin for Commitments (Union Reserve), to be made available over and above the ceilings established in the MFF for the years 2022 to 2027, shall comprise the following:

(a)margins left available below the MFF ceilings for commitments of year n-1;

(b)as of 2023, in addition to the margins referred to in point (a), an amount equivalent to de-commitments of appropriations made during year n-2, without prejudice to Article 15] of the Financial Regulation.

2. The Global Margin for Commitments (Union Reserve) or part thereof may be mobilised by the European Parliament and the Council in the framework of the budgetary procedure provided for in Article 314 TFEU.

Article 13 - Flexibility Instrument

The Flexibility Instrument may be used for the financing, for a given financial year, of clearly identified expenditure which could not be financed within the limits of the ceilings available for one or more other headings. Subject to the second subparagraph, the ceiling of the annual amount available for the Flexibility Instrument is set at EUR 1 000 million (2018 prices).

Each year the annual amount available for the Flexibility Instrument shall be increased by the following amounts:

(a)an amount equivalent to the portion of the annual amount for the European Globalisation Adjustment Fund which has lapsed in the previous year;

(b)an amount equivalent to the portion of the annual amount for the European Union Solidarity Fund which has lapsed in the previous year in accordance with Article 10(1);

(c)an amount equivalent to the portion of the annual amount for the Emergency Aid Reserve which has lapsed in the previous year in accordance with Article 11(2).

Amounts made available to the Flexibility Instrument in accordance with the second subparagraph shall be used in accordance with the conditions set out in this Article.

3. The unused portion of the annual amount of the Flexibility Instrument may be used up to year n+3. The portion of the annual amount stemming from previous years shall be used first, in order of age. That portion of the annual amount from year n which is not used in year n+3 shall lapse.

Article 14 - Contingency Margin

1. A Contingency Margin of up to 0.03 % of the Gross National Income of the Union shall be constituted outside the ceilings of the MFF, as a last resort instrument to react to unforeseen circumstances. It may be mobilised only in relation to an amending or annual budget.

2. Recourse to the Contingency Margin shall not exceed, at any given year, the maximum amount provided in the annual technical adjustment of the MFF, and shall be consistent with the own resources ceiling.

3. Amounts made available through the mobilisation of the Contingency Margin shall be fully offset against the margins in one or more MFF headings for the current or future financial years.

4. The amounts offset in accordance with paragraph 3 shall not be further mobilised in the context of the MFF. Recourse to the Contingency Margin shall not result in exceeding the total ceilings of commitment and payment appropriations laid down in the MFF for the current and future financial years.

Chapter 4
Review and Revision of the MFF

Article 15 - Revision of the MFF

1. Without prejudice to Article 3(2) and Articles 16 to 20 and 24, in the event of unforeseen circumstances, the MFF may be revised in compliance with the own resources ceiling set in accordance with the Own Resources Decision in force.

2. As a general rule, any proposal for a revision of the MFF in accordance with paragraph 1 shall be presented and adopted before the start of the budgetary procedure for the year or the first of the years concerned.

3. Any proposal for revision of the MFF in accordance with paragraph 1 shall examine the scope for reallocating expenditure between the programmes covered by the heading concerned by the revision, with particular reference to any expected under-utilisation of appropriations.

4. Any revision of the MFF in accordance with paragraph 1 shall take into account the scope for offsetting any raising of the ceiling for one heading by the lowering of the ceiling for another heading.

5. Any revision of the MFF in accordance with paragraph 1 shall maintain an appropriate relationship between commitments and payments.

Article 16 - Mid-term review of the MFF

Before 1 January 2024, the Commission shall present a review of the functioning of the MFF. This review shall, as appropriate, be accompanied by relevant proposals.

Article 17 - Revision related to implementation

When notifying the European Parliament and the Council of the results of the technical adjustments to the MFF, the Commission shall, where appropriate, submit any proposal to revise the total appropriations for payments which it considers necessary, in the light of implementation, to ensure a sound management of the yearly payments ceilings, and in particular their orderly progression in relation to the appropriations for commitments.

Article 18 - Revision of the MFF in case of a revision of the Treaties

Should a revision of the Treaties with budgetary implications occur, the MFF shall be revised accordingly.

Article 19 - Revision of the MFF in the event of enlargement of the Union

If there is an accession or accessions to the Union, the MFF shall be revised to take account of the expenditure requirements resulting therefrom.

Article 20 - Revision of the MFF in the event of the reunification of Cyprus

In the event of the reunification of Cyprus, the MFF shall be revised to take account of the comprehensive settlement of the Cyprus problem and the additional financial needs resulting from the reunification.

Chapter 5
Contribution to the financing of large scale projects

Article 21 - Contribution to the financing of large scale projects

1. A maximum amount of EUR 14 196 million (in 2018 prices) shall be available from the general budget of the Union for the period 2021 to 2027 for the large scale projects under Regulation XXXX/XX of the European Parliament and the Council - Space Programme] 20 .

2. A maximum amount of EUR 5 406 million (in 2018 prices) shall be available for the International Thermonuclear Experimental Reactor project (ITER) from the general budget of the Union for the period 2021 to 2027.

Chapter 6
Interinstitutional cooperation in the budgetary procedure

Article 22 - Interinstitutional cooperation in the budgetary procedure

The European Parliament, the Council and the Commission ('the institutions') shall take measures to facilitate the annual budgetary procedure.

The institutions shall cooperate in good faith throughout the procedure with a view to reconciling their positions. The institutions shall, at all stages of the procedure, cooperate through appropriate interinstitutional contacts in order to monitor the progress of the work and analyse the degree of convergence.

The institutions shall ensure that their respective calendars of work are coordinated as far as possible, in order to enable proceedings to be conducted in a coherent and convergent fashion, leading to the final adoption of the general budget of the Union.

Trilogues may be held at all stages of the procedure and at different levels of representation, depending on the nature of the expected discussions. Each institution, in accordance with its own rules of procedure, shall designate its participants for each meeting, define its mandate for the negotiations and inform the other institutions in good time of the arrangements for the meetings.

Article 23 - Unity of the budget

All expenditure and revenue of the Union and Euratom shall be included in the general budget of the Union in accordance with Article 7] of the Financial Regulation, including expenditure resulting from any relevant decision taken unanimously by the Council after consulting the European Parliament, in the framework of Article 332 TFEU.

Chapter 7
Final provisions

Article 24 - Transition towards the next multiannual financial framework

Before 1 July 2025, the Commission shall present a proposal for a new multiannual financial framework.

Article 25 - Entry into force

This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union.

It shall apply from 1 January 2021.

This Regulation shall be binding in its entirety and directly applicable in all Member States.