What changed between the plenary report and the adopted text

Removed:EXPLANATORY STATEMENT

Removed:On 10 November 2020, Parliament’s negotiating team on the multiannual financial framework (MFF) and own resources (OR) reached an overall political compromise with the Council Presidency, and with the Commission for the relevant parts.

Removed:As a result of this compromise, the Council is referring to Parliament a draft Council Regulation laying down the multiannual financial framework for the years 2021 to 2027, that the MFF Co-Rapporteurs recommend consenting to.

Removed:The political compromise covers not only the 2021-2027 MFF, but also the future system of own resources and flanking measures for the new EU Recovery Instrument (Next Generation EU). In addition to the MFF Regulation, the compromise is reflected in:

Removed: an Interinstitutional agreement (IIA) between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap for the introduction of new own resources (submitted to Parliament’s approval separately from the present recommendation);

Removed: a set of joint declarations by the European Parliament, the Council and the Commission (annexed to the present recommendation).

Removed:Prior to this political compromise, Parliament already:

Removed: cleared the way for a swift adoption and ratification of the Own Resources Decision and, thereby, the launch of the EU’s Recovery Instrument by providing, on 16 September 2020, its compulsory legislative opinion to the new draft Council decision on the system of own resources of the European Union (‘Own Resources decision’), which authorises the borrowing of funds under the Next Generation EU scheme;

Removed: reached, on 5 November 2020, a provisional agreement on a general regime of conditionality for the protection of the Union budget (endorsed by the Committees on Budgets and on Budgetary Control on 12 November 2020 and by the Coreper on 16 November 2020, and submitted to Parliament’s adoption under the ordinary legislative procedure).

Removed:Subject to its approval, this political compromise facilitates the conclusion - but does not prejudge the outcome - of the ongoing sectoral negotiations on the new generation of MFF expenditure programmes that are adopted under the ordinary legislative procedure.

Removed:1. Results of negotiations between the European Parliament and the Council

Removed:The political compromise sets the overall ceiling for the 2021-2027 MFF at EUR 1 074.3 billion in 2018 prices, to be progressively increased to EUR 1 085,3 billion. The MFF will be supplemented by a Recovery Instrument of EUR 750 billion (including EUR 390 billion of grants or direct budget expenditure). The financing of the new MFF and Recovery Instrument/NGEU is to be made possible by a new Own Resources decision which authorises the Commission to start with the borrowing operations to finance the Recovery Instrument/NGEU and temporarily increases by a further 0.6 percentage points the Own Resources ceiling for payments to cover the new borrowing capacity of the Union.

Removed:Despite delays on the part of the Council/European Council and sub-optimal interinstitutional cooperation, the European Parliament actively contributed to the package endorsed by Heads of States and Governments at the summit of 17-21 July 2020 on the basis of Commission proposals of May 2018 and May 2020. Parliament welcomed the historic creation of the Recovery Instrument/NGEU. It however regretted unjustified cuts to future-oriented programmes, insufficient commitment towards the creation of new own resources (to cover at least the costs of the recovery debt), insufficient involvement of the EP in the decision making on and governance of the Recovery Instrument, as well as a weakened rule of law mechanism.

Removed:During strenuous negotiations between Parliament, Council and the Commission from 27 August to 10 November 2020, Parliament’s negotiators secured significant improvements on top of the European Council conclusions of 21 July 2020. A provisional agreement was also found on 5 November on the rule of law mechanism.

Removed:Positive steps - whether already reflected in the Council’s position of July 2020 or achieved afterwards - are summed up in the following table.

Removed:2. Timeline

Removed: 14 March 2018: Parliament is the first institution to set out its position on the MFF 2021-2027 and Own resources in two non-legislative resolutions with the aim of influencing the Commission proposals. It states that it will not provide its consent on the MFF without sufficient progress on the own resources.

Removed: 2 May 2018: The Commission publishes its proposals on the MFF and the own resources on 2 May 2018, proposing an MFF at EUR 1 134,6 billion in 2018 prices in commitments. It also puts forward a draft Regulation on the protection of the Union budget (‘Rule of law mechanism’) and, in the following weeks, tables proposals for the basic acts of the 37 sectoral programmes. Commission sets the objective of reaching an agreement before the European elections of May 2019. Parliament adopts a short resolution in response to the Commission proposals on 30 May 2018.

Removed: May 2018 (until July 2020): Start of exchanges of views between the negotiating team and successive Council presidencies before and after General Affairs Council (GAC) meeting where the MFF is on the agenda (“GAC briefings/debriefings”). Parliament describes them as short and formalistic. The negotiating team will be invited twice to informal meetings with GAC Ministers on 12 March 2019 (in Bucharest) and on 19 November 2019 (in Brussels).

Removed: 14 November 2018: Parliament adopts an interim report constituting its detailed negotiating mandate, containing in particular:

Removed:- detailed figures for all MFF ceilings and special instruments, broken down per programme within a ceiling of EUR 1 324,1 billion;

Removed:- specific amendments to the Commission’s draft MFF Regulation, as well as the draft Interinstitutional agreement.

Removed:Parliament requests stepping up regular meetings with Council to pave the way for official negotiations, aiming at reaching a good agreement prior to the 2019 European Parliament elections.

Removed: December 2018: First partial negotiating box submitted to the General Affairs Council. Parliament’s negotiating team starts the practice of circulating to Council and within Parliament annotated versions of the negotiating boxes prepared in collaboration with the rapporteurs for the sectoral programmes in order to foster information and exchanges about Parliament’s views. The European Council rules out the option of a deal before the elections.

Removed: November 2018-April 2019: Parliament adopts negotiating mandates for the rule of law mechanism and almost all expenditure programmes. Parliament accepts to conclude some partial agreements with Council based on the latter’s partial negotiating mandates (sectoral provisions affected by the negotiating box remain bracketed).

Removed: 10 October 2019: Following the European elections, Parliament confirms and updates its negotiating mandate and calls on the Commission to formally reflect in its initial MFF proposal the impact of the commitments taken by its new President . Due to Council’s delays, Parliament asks for a contingency plan should an agreement not be reached in time.

Removed: December 2019: First negotiating box with figures submitted to the General Affairs Council. On top of its annotated versions of the negotiating box, Parliament’s negotiating team starts the practice of circulating comparative analyses of every new set of figures put forward by the other institutions.

Removed: 20-21 February 2020: The special European Council meeting is inconclusive. On the basis of Article 225 TFEU, Parliament subsequently prepares a formal request for a contingency plan to the Commission.

Removed: April and May 2020: Due to the health and economic consequences of the COVID-19 pandemic, Parliament calls on the Commission, in two resolutions, to propose a massive recovery and reconstruction package financed by common borrowing guaranteed by the Union budget, with a significant grant component.

Removed: 27 May 2020: The Commission puts forward a Recovery plan that includes revised proposals for the MFF and the Own resources, new proposals for the setting up of a Recovery Instrument / Next Generation EU of EUR 750 billion financed by borrowing on financial markets, and new or revised sectoral proposals.

Removed: 8 July 2020: First high-level meeting of the Presidents of the institutions set out in Article 324 TFEU “to promote consultation and the reconciliation of the positions”.

Removed: 17-21 July 2020: The European Council reaches political agreement on an MFF at EUR 1 074,3 billion in 2018 prices and a Recovery Instrument of EUR 750 billion, including EUR 390 billion of grants. This makes it possible for the Council to adopt full positions and negotiating mandates on the whole package of proposals.

Removed: 23 July 2020: Parliament adopts a resolution setting out Parliament’s assessment of the European Council conclusions and identifying the main elements for the upcoming negotiations.

Removed: 27 August 2020: Negotiations start in the form of “trilateral dialogue” meetings between Parliament’s negotiating team, the Permanent Representative of Germany (holding the Council Presidency) and the Commissioner responsible for Budget. They are prepared and followed up by numerous trilateral meetings at technical level.

Removed: 16 September 2020: Without waiting for the outcome of negotiations, Parliament provides its compulsory opinion to the Own Resources Decision (ORD) to clear the way for its adoption by Council and subsequent ratification in all Member States, in view of the swift launch of the Recovery Instrument.

Removed: 30 September 2020: Council adopts negotiating mandate on the rule of law mechanism. Negotiators will reach provisional agreement on 5 November 2020 (endorsed by the Committees on Budgets and on Budgetary Control on 12 November, and by Coreper on 16 November).

Removed: 10 November 2020: At the 12th “trilateral dialogue” meeting, MFF/OR negotiators reach a political agreement on the MFF, the own resources and the Recovery Instrument.