juncker-jean-claude-120217The European Commission today unveiled its proposed budget for 2021-2027 describing it as a a pragmatic and modern.

European Commission President Jean-Claude Juncker said: “Today is an important moment for our Union. The new budget is an opportunity to shape our future as a new, ambitious Union of 27 bound together by solidarity. With today’s proposal we have put forward a pragmatic plan for how to do more with less. The economic wind in our sails gives us some breathing space but does not shelter us from having to make savings in some areas. We will ensure sound financial management through the first ever rule of law mechanism. This is what it means to act responsibly with our taxpayers’ money. The ball is now in the court of Parliament and Council. I strongly believe we should aim to have agreement before the European Parliament elections next year.”

Commissioner Günther H. Oettinger in charge of Budget and Human Resources said: “This budget proposal is truly about EU added value. We invest even more in areas where one single Member State cannot act alone or where it is more efficient to act together – be it research, migration, border control or defence. And we continue to finance traditional – but modernised – policies, such as Common Agricultural Policy and Cohesion Policy, because we all benefit from the high standard of our agricultural products and regions catching up economically.”

Overall, the Commission proposes a long-term budget of €1.135 billion in commitments (expressed in 2018 prices) over the period from 2021 to 2027, equivalent to 1.11% of the EU27’s gross national income (GNI). To fund new and pressing priorities, current levels of funding will need to be increased. Investing now in areas such as research and innovation, young people, the digital economy, border management, security and defence will contribute to prosperity, sustainability and security in the future. For instance, the budget of Erasmus+ and the European Solidarity Corps will be doubled.

At the same time, the Commission has critically examined where savings can be made and efficiency improved. The Commission is proposing that funding for the Common Agricultural Policy and Cohesion Policy is moderately reduced – both by around 5% – to reflect the new reality of a Union at 27. These policies will be modernised to ensure they can still deliver with less and even serve new priorities. For example, Cohesion Policy will have an increasingly important role to play in supporting structural reform and in the long-term integration of migrants.

The result of these changes will be a rebalancing of the budget and an increased focus on the areas where the EU budget can make the biggest difference.

A major innovation in the proposed budget is the strengthened link between EU funding and the rule of law. Respect for the rule of law is an essential precondition for sound financial management and effective EU funding. The Commission is therefore proposing a new mechanism to protect the EU budget from financial risks linked to generalised deficiencies regarding the rule of law in the Member States. The new proposed tools would allow the Union to suspend, reduce or restrict access to EU funding in a manner proportionate to the nature, gravity and scope of the rule of law deficiencies. Such a decision would be proposed by the Commission and adopted by the Council through reverse qualified majority voting.

Building on today’s proposals, the Commission will present, in the weeks to come, detailed proposals for the future sector-specific financial programmes.

The decision on the future long-term EU budget will then fall to the Council, acting by unanimity, with the consent of the European Parliament. Timing is of the essence. Negotiations on the current long-term EU budget took too long. As a result, key financial programmes were delayed and projects with real potential to spur the economic recovery postponed.

Negotiations should therefore be given the utmost priority, and agreement should be reached before the European Parliament elections and the summit in Sibiu on 9 May 2019. The Commission will do everything in its power to allow for a swift agreement.

The Commission’s Proposed Budget can be accessed here.