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European Commission - Press release

State of the Union 2016: EU budget review further focuses budget on priorities, ensures more flexibility and less red tape

Strasbourg, 14 September 2016

"Our European budget is living proof of financial solidarity." – President Juncker, State of the Union 2016.

On the occasion of President Juncker’s 2016 State of the Union address, the Commission today presented its mid-term review of the multiannual EU budget (2014-2020). Without touching the upper spending limits agreed with the European Parliament and Council, the proposed package will free up an additional €6,3 billion in financing by 2020. The money will go to foster job creation, investment and economic growth and to address migration and its root causes. It also makes proposals how to make the EU budget better equipped and quicker to respond to unforeseen circumstances, while financial rules will be simplified and focused on results.

European Commission Vice-President Kristalina Georgieva, in charge of budget and human resources, said: ‘I am proud that the EU budget has allowed us to meet political priorities, to ensure investment in jobs and growth and the security of people in Europe and beyond. In today's mid-term review package we are proposing to further reinforce these priorities with €6,3 billion and make the use of the EU budget simpler and more flexible. This review is the start – not the end – of a drive to focus even more on results, making sure that every euro from the EU budget is spent in the best possible way.’

More money for vital areas and high-performance programmes

The additional financing proposed up until 2020 corresponds to the two big priorities of investment and migration. It breaks down as follows:

  • €2,4 billion will go to further boost growth and jobs via more money for highly performing programmes such as the extended European Fund for Strategic Investments (EFSI) (see Press release), the Youth Employment Initiative, the programme for research and innovation 'Horizon 2020', the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME), Erasmus as well as the Connecting Europe Facility (CEF) that supports the development of trans-European networks in the fields of transport, energy and digital services. This includes €50 million forWiFi4EU, aiming at helping European communities offer free WiFi hotspots to any citizen, leading to a total envelope of €120 million.
  • €2,5 billion to support the ongoing work in the areas of migration, security and external border control, including the setting up of the European Border and Coast Guard, the EU Agency for Asylum, and the reform of the Common European Asylum System.
  • €1,4 billion for the European Fund for Sustainable Development, under the 'External Investment Plan' (see Fact Sheet), which will support investments in regions outside the EU and will seek private partners to address the root causes of migration, while contributing to achieving other development goals; for migration partnerships, for macroeconomic financial assistance and for external lending in order to stabilise countries in the neighbourhood.

Together with the increases in the draft budget 2017 (€1.8 billion) and the technical adjustment of cohesion envelopes that will dedicate additional money to these priorities (€4,6 billion), the mid-term review comprises a financial package of a total of almost €13 billion.

Member States will not be asked to pay more than what they have already committed under MFF 2014-2020. The money will come from some of the reserves of the budget, like unallocated margins and special instruments.

Simplification of rules

Together with the mid-term review, the Commission is proposing to simplify the rules under which Member States and other beneficiaries receive EU money. Some of the expected results include:

  • Easier access to EU funds. For example, researchers or students will no longer need to spend time on filling in the forms of their travel expenses and will instead be able to dedicate more time to research.
  • To facilitate cooperation, the EU will be able to rely on already existing audits and controls by other donors, like the UN. This will save NGOs receiving money from multiple donors a lot of paper work, allowing them to spend more time in the field.
  • Citizens' involvement will be encouraged. For example, citizens will be able to have a say on whether the money for their village should be spent on a new square or a playground.
  • The financial rulebook will be easier to read and 25% shorter than at present.

A more agile budget with a new EU Crisis Reserve

The Commission also proposes to improve the ability of the EU budget to react quickly and adequately to unforeseen events including:

  • Setting up a new European Union Crisis Reserve dedicated to spending on priorities to be funded by unused money.
  • Doubling the size of the Flexibility Instrument (to €1 billion) and the Emergency Aid Reserve (to €0.5 billion).
  • Introducing for the first time a 'flexibility cushion' for support outside the EU through a reserve of up to 10% of annual commitment appropriations.
  • Allowing Trust Funds for emergency or specific actions within the EU (currently only allowed outside of the EU).

Building on successes in the current EU budget cycle

The mid-term review takes stock of key achievements of the current seven year budget cycle during which the EU budget has already been instrumental in supporting the highest political priorities:

  • Funding to support integration of refugees, security, border control, and managing migration was almost doubled to more than EUR 15 billion for 2015-2017.
  • To date, more than 1.4 million people have benefitted from actions supported by the Youth Employment Initiative, a number which exceeds initial estimates.
  • About EUR 200 billion are earmarked in several policies for measures to mitigate and adapt to climate change over the 2014-2020 period.
  • The European Fund for Strategic Investment (EFSI) mobilised, in its first year of implementation, about EUR 115 billion in investments to boost jobs and growth. Given the results delivered, the Commission is proposing today, in parallel with its Communication on the mid-term review of the MFF, to extend the duration of the EFSI until 2020 and to double its financial capacity.

Next steps

The proposed legislative proposals will now have to be agreed by the European Parliament and the Council. The Commission will work closely with the other institutions to secure agreement on as much of the package as possible by the end of 2016.

Background

The mid-term review was part of the political agreement on the Multiannual Financial Framework (MFF) 2014-2020 and is provided for in Article 2 of the Council Regulation 1311/2013 ('MFF Regulation'). The current MFF was agreed in 2013 against the background of the economic crisis and its impact on public finances. For the first time in EU history the seven-year budget is smaller than the previous one.

 

More information

Proposed legislative package

 

IP/16/2999

Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email


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